v3.26.3
Note 6 - Debt
 9 Months Ended
Sep. 30, 2026
Notes to Financial Statements  
Debt Disclosure [Text Block]

6.

Debt

 

The Company’s mortgage loans are collateralized by first-mortgage liens on certain of the Company’s properties. The mortgage loans are non-recourse except for instances of fraud or misapplication of funds. Mortgage, revolving credit facility, and unsecured term loan debt consisted of the following (dollars in thousands):

 

         

September 30, 2026

         
  

Interest

  

Maturity

  

Property

  

Balance Outstanding on Loan as of

 

Collateral

 

Rate

  

Date

  

Carrying Value

  

September 30, 2026

  

December 31, 2025

 

Revolving Credit Facility (1)

  5.13% 

September 25, 2029

  $—  $65,000  $— 

Unsecured Term Loan (2)

  5.12% 

September 25, 2029

   —   200,000   200,000 

Courtyard by Marriott Dallas, TX

  7.61% 

September 11, 2028

   37,631   24,500   24,500 

Hyatt Place Pittsburgh, PA

  7.29% 

June 11, 2029

   29,642   23,300   23,300 

Residence Inn by Marriott Austin, TX

  7.42% 

September 6, 2033

   34,934   20,850   20,850 

TownePlace Suites by Marriott Austin, TX

  7.42% 

September 6, 2033

   28,083   19,075   19,075 

Courtyard by Marriott Summerville, SC

  7.33% 

September 11, 2033

   17,023   9,000   9,000 

Residence Inn by Marriott Summerville, SC

  7.33% 

September 11, 2033

   16,274   9,500   9,500 

SpringHill Suites by Marriott Savannah, GA

  6.70% 

June 6, 2034

   30,848   22,000   22,000 

Hampton Inn & Suites Exeter, NH

  6.70% 

June 11, 2034

   11,515   15,000   15,000 

Total debt before unamortized debt issue costs

        $205,950  $408,225  $343,225 

Unamortized term loan and mortgage debt issue costs

             (3,696)  (4,312)

Total debt outstanding

            $404,529  $338,913 

 

 

1.

The interest rate for the revolving credit facility is variable and based on one-month term secured overnight financing rate ("SOFR") plus a spread of 1.50% to 2.25% based on the Company's leverage.

 

 

2.

The interest rate for the unsecured term loan is variable and based on one-month term SOFR plus a spread of 1.45% to 2.20% based on the Company's leverage.

 

At September 30, 2026 and December 31, 2025, the Company had $265.0 million and $200.0 million, respectively, of outstanding borrowings under its revolving credit facility and unsecured term loan. At September 30, 2026, the aggregate maximum remaining borrowing availability under the revolving credit facility was $235.0 million.

 

During the nine months ended September 30, 2026, the Company had net borrowings of $65.0 million under its revolving credit facility. During the nine months ended September 30, 2025, the Company made net repayments of $110.0 million under its revolving credit facility, had net borrowings of $60.0 million under its unsecured term loan and repaid the maturing mortgage loan of $16.0 million on the Hampton Inn Houston hotel property.

 

The Company estimates the fair value of its fixed rate debt by discounting the future cash flows of each instrument at estimated market rates. All of the Company's mortgage loans are fixed-rate. Rates take into consideration general market conditions, quality and estimated value of collateral and maturity of debt with similar credit terms and are classified within level 3 of the fair value hierarchy. The estimated fair value of the Company’s fixed rate debt as of  September 30, 2026 and  December 31, 2025 was $145.6 million and $154.0 million, respectively.

 

The Company estimates the fair value of its variable rate debt by taking into account general market conditions and the estimated credit terms it could obtain for debt with similar maturity and is classified within level 3 of the fair value hierarchy. As of September 30, 2026, the Company’s variable rate debt consisted of borrowings under its revolving credit facility and its unsecured term loan. The estimated fair value of the Company’s variable rate debt as of  September 30, 2026 and  December 31, 2025 was $265.0 million and $200.0 million, respectively.

 

The Company's mortgage debt agreements contain “cash trap” provisions that are triggered when the hotel's operating results fall below a certain debt service coverage ratio or debt yield. When these provisions are triggered, all of the excess cash flow generated by the hotel is deposited directly into cash management accounts for the benefit of the lenders until a specified debt service coverage ratio or debt yield is reached. Such provisions do not allow the lender the right to accelerate repayment of the underlying debt. As of   September 30, 2026, one of our mortgage debt lenders has enforced cash trap provisions resulting in $0.7 million of restricted cash. The Company does not expect that the cash trap will affect its ability to satisfy its short-term liquidity requirements.

 

Future scheduled principal payments of debt obligations as of September 30, 2026, for the current year and each of the next five calendar years and thereafter are as follows (in thousands):

 

  

Amount

 

2026 (remaining three months)

 $— 

2027

  — 

2028

  24,590 

2029

  288,681 

2030

  410 

Thereafter

  94,544 

Total debt before unamortized debt issue costs

 $408,225 

Unamortized term loan and mortgage debt issue costs

  (3,696)

Total debt outstanding

 $404,529