SOTHERLY HOTELS INC., 10-Q filed on 11/18/2024
Quarterly Report
v3.24.3
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2024
Nov. 12, 2024
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Document Quarterly Report true  
Entity Registrant Name SOTHERLY HOTELS INC.  
Entity Central Index Key 0001301236  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company false  
Entity Small Business true  
Entity Shell Company false  
Entity Incorporation, State or Country Code MD  
Entity File Number 001-32379  
Entity Tax Identification Number 20-1531029  
Entity Address, Address Line One 306 South Henry Street, Suite 100  
Entity Address, City or Town Williamsburg  
Entity Address, State or Province VA  
Entity Address, Postal Zip Code 23185  
City Area Code 757  
Local Phone Number 229-5648  
Document Transition Report false  
Entity Common Stock, Shares Outstanding   19,849,165
Common Stock [Member]    
Document Information [Line Items]    
Title of each class Common Stock, $0.01 par value  
Trading Symbol SOHO  
Name of each exchange on which registered NASDAQ  
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member]    
Document Information [Line Items]    
Title of each class 8.0% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value  
Trading Symbol SOHOB  
Name of each exchange on which registered NASDAQ  
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]    
Document Information [Line Items]    
Title of each class 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value  
Trading Symbol SOHOO  
Name of each exchange on which registered NASDAQ  
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]    
Document Information [Line Items]    
Title of each class 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value  
Trading Symbol SOHON  
Name of each exchange on which registered NASDAQ  
Sotherly Hotels LP [Member]    
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2024  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q3  
Document Quarterly Report true  
Entity Registrant Name SOTHERLY HOTELS LP  
Entity Central Index Key 0001301236  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Shell Company false  
Entity Incorporation, State or Country Code DE  
Entity File Number 001-36091  
Entity Tax Identification Number 20-1965427  
Entity Address, Address Line One 306 South Henry Street, Suite 100  
Entity Address, City or Town Williamsburg  
Entity Address, State or Province VA  
Entity Address, Postal Zip Code 23185  
City Area Code 757  
Local Phone Number 229-5648  
Document Transition Report false  
v3.24.3
Consolidated Balance Sheets - USD ($)
Sep. 30, 2024
Dec. 31, 2023
ASSETS    
Investment in hotel properties, net $ 372,952,913 $ 354,919,106
Cash and cash equivalents 14,017,642 17,101,993
Restricted cash 18,488,112 9,134,347
Accounts receivable, net 3,185,999 5,945,724
Prepaid expenses, inventory and other assets 6,309,930 6,342,310
TOTAL ASSETS 414,954,596 393,443,480
LIABILITIES    
Mortgage loans, net 318,061,006 315,989,194
Unsecured notes 906,280 1,536,809
Finance lease liabilities 22,742,195  
Accounts payable and accrued liabilities 23,713,552 23,315,677
Advance deposits 2,879,011 2,614,981
Dividends and distributions payable 2,088,160 2,088,160
TOTAL LIABILITIES 370,390,204 345,544,821
Commitments and contingencies (See Note 5)
Sotherly Hotels Inc. stockholders’ equity    
Common stock, par value $0.01, 69,000,000 shares authorized, 19,849,165 shares issued and outstanding at September 30, 2024 and 19,696,805 shares issued and outstanding at December 31, 2023. 198,492 196,968
Additional paid-in capital 176,029,053 175,779,222
Unearned ESOP shares (1,664,624) (1,764,507)
Distributions in excess of retained earnings (128,662,378) (125,021,013)
Total Sotherly Hotels Inc. stockholders’ equity 45,940,276 49,230,403
Noncontrolling interest (1,375,884) (1,331,744)
TOTAL EQUITY 44,564,392 47,898,659
TOTAL LIABILITIES AND PARTNERS' CAPITAL 414,954,596 393,443,480
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member]    
Sotherly Hotels Inc. stockholders’ equity    
Preferred stock, $0.01 par value, 11,000,000 shares authorized: 14,641 14,641
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]    
Sotherly Hotels Inc. stockholders’ equity    
Preferred stock, $0.01 par value, 11,000,000 shares authorized: 13,461 13,461
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]    
Sotherly Hotels Inc. stockholders’ equity    
Preferred stock, $0.01 par value, 11,000,000 shares authorized: 11,631 11,631
Sotherly Hotels LP [Member]    
ASSETS    
Investment in hotel properties, net 372,952,913 354,919,106
Cash and cash equivalents 14,017,642 17,101,993
Restricted cash 18,488,112 9,134,347
Accounts receivable, net 3,185,999 5,945,724
Loan receivable - affiliate 1,656,005 1,744,532
Prepaid expenses, inventory and other assets 6,309,930 6,342,310
TOTAL ASSETS 416,610,601 395,188,012
LIABILITIES    
Mortgage loans, net 318,061,006 315,989,194
Unsecured notes 906,280 1,536,809
Finance lease liabilities 22,742,195  
Accounts payable and accrued liabilities 23,713,552 23,315,677
Advance deposits 2,879,011 2,614,981
Dividends and distributions payable 2,088,160 2,088,160
TOTAL LIABILITIES 370,390,204 345,544,821
Commitments and contingencies (See Note 5)
PARTNERS' CAPITAL    
General Partner: 206,744 units and 205,220 units issued and outstanding as of September 30, 2024 and December 31, 2023, respectively. (215,260) (171,830)
Limited Partners: 20,006,607 units and 19,855,771 units issued and outstanding as of September 30, 2024 and December 31, 2023, respectively. (46,985,108) (43,605,744)
TOTAL PARTNERS' CAPITAL 46,220,397 49,643,191
Sotherly Hotels Inc. stockholders’ equity    
TOTAL LIABILITIES AND PARTNERS' CAPITAL 416,610,601 395,188,012
Sotherly Hotels LP [Member] | 8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member]    
PARTNERS' CAPITAL    
Preferred units, 11,000,000 units authorized; 34,344,086 34,344,086
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]    
PARTNERS' CAPITAL    
Preferred units, 11,000,000 units authorized; 31,571,778 31,571,778
Sotherly Hotels LP [Member] | 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]    
PARTNERS' CAPITAL    
Preferred units, 11,000,000 units authorized; $ 27,504,901 $ 27,504,901
v3.24.3
Consolidated Balance Sheets (Parenthetical) - USD ($)
 6 Months Ended 9 Months Ended 12 Months Ended
Jun. 30, 2024
Sep. 30, 2024
Dec. 31, 2023
Preferred stock, shares authorized 11,000,000   11,000,000
Common stock, par value   $ 0.01 $ 0.01
Common stock, shares authorized   69,000,000 69,000,000
Common stock, shares issued   19,849,165 19,696,805
Common stock, shares outstanding   19,849,165 19,696,805
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member]      
Preferred stock, par value   $ 0.01 $ 0.01
Preferred stock, shares authorized   11,000,000 11,000,000
Preferred stock, dividend rate percentage   8.00% 8.00%
Preferred stock, shares issued   1,464,100 1,464,100
Preferred stock, shares outstanding   1,464,100 1,464,100
Preferred stock, aggregate liquidation preference   $ 44,655,050 $ 44,655,050
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]      
Preferred stock, par value   $ 0.01 $ 0.01
Preferred stock, shares authorized   11,000,000 11,000,000
Preferred stock, dividend rate percentage   7.875% 7.875%
Preferred stock, shares issued   1,346,110 1,346,110
Preferred stock, shares outstanding   1,346,110 1,346,110
Preferred stock, aggregate liquidation preference   $ 40,940,681 $ 40,940,681
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]      
Preferred stock, par value   $ 0.01 $ 0.01
Preferred stock, shares authorized   11,000,000 11,000,000
Preferred stock, dividend rate percentage   8.25% 8.25%
Preferred stock, shares issued   1,163,100 1,163,100
Preferred stock, shares outstanding   1,163,100 1,163,100
Preferred stock, aggregate liquidation preference   $ 35,674,458 $ 35,674,458
Sotherly Hotels LP [Member]      
General Partner, units issued 206,744   205,220
General Partner, units outstanding 206,744   205,220
Limited Partner, units issued 20,006,607   19,855,771
Limited Partner, units outstanding 20,006,607   19,855,771
Sotherly Hotels LP [Member] | 8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member]      
Preferred units, authorized 11,000,000   11,000,000
Preferred units, dividend rate percentage 8.00%   8.00%
Preferred units, issued 1,464,100   1,464,100
Preferred units, outstanding 1,464,100   1,464,100
Preferred units, aggregate liquidation preference $ 44,655,050   $ 44,655,050
Sotherly Hotels LP [Member] | 7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]      
Preferred units, authorized 11,000,000   11,000,000
Preferred units, dividend rate percentage 7.875%   7.875%
Preferred units, issued 1,346,110   1,346,110
Preferred units, outstanding 1,346,110   1,346,110
Preferred units, aggregate liquidation preference $ 40,940,681   $ 40,940,681
Sotherly Hotels LP [Member] | 8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]      
Preferred units, authorized 11,000,000   11,000,000
Preferred units, dividend rate percentage 8.25%   8.25%
Preferred units, issued 1,163,100   1,163,100
Preferred units, outstanding 1,163,100   1,163,100
Preferred units, aggregate liquidation preference $ 35,674,458   $ 35,674,458
v3.24.3
Consolidated Statements of Operations - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
REVENUE        
Total revenue $ 40,699,981 $ 39,181,363 $ 137,942,779 $ 131,689,974
Hotel operating expenses        
Total hotel operating expenses 32,612,933 31,614,656 101,797,697 97,202,033
Depreciation and amortization 4,860,548 4,715,019 14,447,789 14,056,523
Gain on disposal of assets   (4,700)   (4,700)
Corporate general and administrative 1,471,566 1,688,535 4,968,465 5,458,340
Total operating expenses 38,945,047 38,013,510 121,213,951 116,712,196
NET OPERATING INCOME 1,754,934 1,167,853 16,728,828 14,977,778
Other income (expense)        
Interest expense (5,341,825) (4,466,630) (15,231,626) (12,868,595)
Interest income 155,309 222,878 578,183 592,315
Other income 103,961   371,191  
Loss on early extinguishment of debt     (241,878)  
Realized gain on hedging activities     1,041,994  
Unrealized gain (loss) on hedging activities (327,826) 103,946 (1,119,247) (51,686)
PPP loan forgiveness       275,494
Gain on sale of assets     4,400 4,700
Gain on involuntary conversion of assets 32,537 551,729 267,574 1,331,374
Net (loss) income before income taxes (3,622,910) (2,420,224) 2,399,419 4,256,680
Income tax provision (66,711) 354,398 (101,988) 322,679
Net (loss) income (3,689,621) (2,065,826) 2,297,431 4,579,359
Add: Net loss attributable to noncontrolling interest 80,173 156,558 44,140 50,720
Net (loss) income attributable to the Company (3,609,448) (1,909,268) 2,341,571 4,630,079
Undeclared distributions to preferred stockholders (1,994,313) (1,994,313) (5,982,938) (5,982,938)
Net loss attributable to common stockholders $ (5,603,761) $ (3,903,581) $ (3,641,367) $ (1,352,859)
Net loss per share attributable to common stockholders:/general and limited partner unit:        
Basic $ (0.29) $ (0.2) $ (0.19) $ (0.08)
Diluted $ (0.29) $ (0.2) $ (0.19) $ (0.08)
Weighted average number of common shares/general and limited partner units outstanding        
Basic 19,434,233 18,906,851 19,408,524 18,742,219
Diluted 19,434,233 18,906,851 19,408,524 18,742,219
Sotherly Hotels LP [Member]        
REVENUE        
Total revenue $ 40,699,981 $ 39,181,363 $ 137,942,779 $ 131,689,974
Hotel operating expenses        
Total hotel operating expenses 32,612,933 31,614,656 101,797,697 97,202,033
Depreciation and amortization 4,860,548 4,715,019 14,447,789 14,056,523
Gain on disposal of assets   (4,700)   (4,700)
Corporate general and administrative 1,471,566 1,688,535 4,968,465 5,458,340
Total operating expenses 38,945,047 38,013,510 121,213,951 116,712,196
NET OPERATING INCOME 1,754,934 1,167,853 16,728,828 14,977,778
Other income (expense)        
Interest expense (5,341,825) (4,466,630) (15,231,626) (12,868,595)
Interest income 155,309 222,878 578,183 592,315
Other income 103,961   371,191  
Loss on early extinguishment of debt     (241,878)  
Realized gain on hedging activities     1,041,994  
Unrealized gain (loss) on hedging activities (327,826) 103,946 (1,119,247) (51,686)
PPP loan forgiveness       275,494
Gain on sale of assets     4,400 4,700
Gain on involuntary conversion of assets 32,537 551,729 267,574 1,331,374
Net (loss) income before income taxes (3,622,910) (2,420,224) 2,399,419 4,256,680
Income tax provision (66,711) 354,398 (101,988) 322,679
Net (loss) income (3,689,621) (2,065,826) 2,297,431 4,579,359
Undeclared distributions to preferred unit holders (1,994,313) (1,994,313) (5,982,938) (5,982,938)
Undeclared distributions to preferred stockholders (1,994,313) (1,994,313) (5,982,938) (5,982,938)
Net loss attributable to general and limited partnership unit holders $ (5,683,934) $ (4,060,139) $ (3,685,507) $ (1,403,579)
Net loss per share attributable to common stockholders:/general and limited partner unit:        
Basic $ (0.28) $ (0.2) $ (0.19) $ (0.07)
Diluted $ (0.28) $ (0.2) $ (0.19) $ (0.07)
Weighted average number of common shares/general and limited partner units outstanding        
Basic 20,004,351 19,810,991 19,994,898 19,807,797
Diluted 20,004,351 19,810,991 19,994,898 19,807,797
Rooms Department [Member]        
REVENUE        
Total revenue $ 27,164,369 $ 26,260,586 $ 91,479,915 $ 87,915,797
Hotel operating expenses        
Total hotel operating expenses 6,597,088 6,437,081 20,601,678 19,866,515
Rooms Department [Member] | Sotherly Hotels LP [Member]        
REVENUE        
Total revenue 27,164,369 26,260,586 91,479,915 87,915,797
Hotel operating expenses        
Total hotel operating expenses 6,597,088 6,437,081 20,601,678 19,866,515
Food and Beverage Department [Member]        
REVENUE        
Total revenue 7,759,489 7,522,753 27,413,491 25,772,453
Hotel operating expenses        
Total hotel operating expenses 5,791,865 5,607,350 18,798,440 17,933,777
Food and Beverage Department [Member] | Sotherly Hotels LP [Member]        
REVENUE        
Total revenue 7,759,489 7,522,753 27,413,491 25,772,453
Hotel operating expenses        
Total hotel operating expenses 5,791,865 5,607,350 18,798,440 17,933,777
Other Operating Departments [Member]        
REVENUE        
Total revenue 5,776,123 5,398,024 19,049,373 18,001,724
Hotel operating expenses        
Total hotel operating expenses 2,318,079 2,198,058 7,509,942 6,819,661
Other Operating Departments [Member] | Sotherly Hotels LP [Member]        
REVENUE        
Total revenue 5,776,123 5,398,024 19,049,373 18,001,724
Hotel operating expenses        
Total hotel operating expenses 2,318,079 2,198,058 7,509,942 6,819,661
Indirect [Member]        
Hotel operating expenses        
Total hotel operating expenses 17,905,901 17,372,167 54,887,637 52,582,080
Indirect [Member] | Sotherly Hotels LP [Member]        
Hotel operating expenses        
Total hotel operating expenses $ 17,905,901 $ 17,372,167 $ 54,887,637 $ 52,582,080
v3.24.3
Consolidated Statements of Changes in Equity - USD ($)
Total
Series B Preferred Stock [Member]
Series C Preferred Stock [Member]
Series D Preferred Stock [Member]
Preferred Stock [Member]
Common Stock [Member]
Additional Paid-In Capital [Member]
Unearned ESOP Shares [Member]
Distributions in Excess of Retained Earnings [Member]
Distributions in Excess of Retained Earnings [Member]
Series B Preferred Stock [Member]
Distributions in Excess of Retained Earnings [Member]
Series C Preferred Stock [Member]
Distributions in Excess of Retained Earnings [Member]
Series D Preferred Stock [Member]
Noncontrolling Interest [Member]
Balances, beginning at Dec. 31, 2022 $ 51,520,723       $ 39,733 $ 189,515 $ 175,611,370 $ (2,601,134) $ (120,985,183)       $ (733,578)
Balances, shares, beginning at Dec. 31, 2022         3,973,310 18,951,525              
Net Income (loss) 1,387,514               1,412,474       (24,960)
Issuance of common stock 121,485         $ 643 120,842            
Issuance of common stock, shares           64,278              
Issuance of restricted common stock awards 103,901         $ 2,200 101,701            
Issuance of restricted common stock awards, shares           220,000              
Amortization of ESOP shares 12,195           (33,439) 45,634          
Amortization of restricted stock awards 22,883           22,883            
Balances, ending at Mar. 31, 2023 53,168,701       $ 39,733 $ 192,358 175,823,357 (2,555,500) (119,572,709)       (758,538)
Balances, shares, ending at Mar. 31, 2023         3,973,310 19,235,803              
Balances, beginning at Dec. 31, 2022 51,520,723       $ 39,733 $ 189,515 175,611,370 (2,601,134) (120,985,183)       (733,578)
Balances, shares, beginning at Dec. 31, 2022         3,973,310 18,951,525              
Net Income (loss) 4,579,359                        
Balances, ending at Sep. 30, 2023 50,487,858       $ 39,733 $ 196,968 176,304,184 (2,464,231) (122,338,042)       (1,250,754)
Balances, shares, ending at Sep. 30, 2023         3,973,310 19,696,805              
Balances, beginning at Mar. 31, 2023 53,168,701       $ 39,733 $ 192,358 175,823,357 (2,555,500) (119,572,709)       (758,538)
Balances, shares, beginning at Mar. 31, 2023         3,973,310 19,235,803              
Net Income (loss) 5,257,670               5,126,872       130,798
Conversion of units in Operating Partnership to shares of common stock           $ 750 426,049           (426,799)
Conversion of units in Operating Partnership to shares of common stock, shares           75,000              
Preferred stock dividend declared   $ (1,464,100) $ (1,325,078) $ (1,199,447)           $ (1,464,100) $ (1,325,078) $ (1,199,447)  
Amortization of ESOP shares 12,717           (32,916) 45,633          
Amortization of restricted stock awards 41,771           41,771            
Balances, ending at Jun. 30, 2023 54,492,234       $ 39,733 $ 193,108 176,258,261 (2,509,867) (118,434,462)       (1,054,539)
Balances, shares, ending at Jun. 30, 2023         3,973,310 19,310,803              
Net Income (loss) (2,065,826)               (1,909,268)       (156,558)
Conversion of units in Operating Partnership to shares of common stock           $ 3,860 35,797           (39,657)
Conversion of units in Operating Partnership to shares of common stock, shares           386,002              
Preferred stock dividend declared   (732,050) (662,539) (599,723)           (732,050) (662,539) (599,723)  
Amortization of ESOP shares 13,992           (31,644) 45,636          
Amortization of restricted stock awards 41,770           41,770            
Balances, ending at Sep. 30, 2023 50,487,858       $ 39,733 $ 196,968 176,304,184 (2,464,231) (122,338,042)       (1,250,754)
Balances, shares, ending at Sep. 30, 2023         3,973,310 19,696,805              
Balances, beginning at Dec. 31, 2023 47,898,659       $ 39,733 $ 196,968 175,779,222 (1,764,507) (125,021,013)       (1,331,744)
Balances, shares, beginning at Dec. 31, 2023         3,973,310 19,696,805              
Net Income (loss) 1,322,821               1,334,939       (12,118)
Issuance of common stock 204,925         $ 1,524 203,401            
Issuance of common stock, shares           152,360              
Preferred stock dividend declared   (732,050) (662,539) (599,723)           (732,050) (662,539) (599,723)  
Amortization of ESOP shares 6,756           (26,542) 33,298          
Amortization of restricted stock awards 44,270           44,270            
Balances, ending at Mar. 31, 2024 47,483,119       $ 39,733 $ 198,492 176,000,351 (1,731,209) (125,680,386)       (1,343,862)
Balances, shares, ending at Mar. 31, 2024         3,973,310 19,849,165              
Balances, beginning at Dec. 31, 2023 47,898,659       $ 39,733 $ 196,968 175,779,222 (1,764,507) (125,021,013)       (1,331,744)
Balances, shares, beginning at Dec. 31, 2023         3,973,310 19,696,805              
Net Income (loss) 2,297,431                        
Balances, ending at Sep. 30, 2024 44,564,392       $ 39,733 $ 198,492 176,029,053 (1,664,624) (128,662,378)       (1,375,884)
Balances, shares, ending at Sep. 30, 2024         3,973,310 19,849,165              
Balances, beginning at Mar. 31, 2024 47,483,119       $ 39,733 $ 198,492 176,000,351 (1,731,209) (125,680,386)       (1,343,862)
Balances, shares, beginning at Mar. 31, 2024         3,973,310 19,849,165              
Net Income (loss) 4,664,232               4,616,081       48,151
Preferred stock dividend declared   (732,050) (662,539) (599,722)           (732,050) (662,539) (599,722)  
Amortization of ESOP shares 6,060           (27,233) 33,293          
Amortization of restricted stock awards 41,770           41,770            
Balances, ending at Jun. 30, 2024 50,200,870       $ 39,733 $ 198,492 176,014,888 (1,697,916) (123,058,616)       (1,295,711)
Balances, shares, ending at Jun. 30, 2024         3,973,310 19,849,165              
Net Income (loss) (3,689,621)               (3,609,448)       (80,173)
Preferred stock dividend declared   $ (732,051) $ (662,540) $ (599,723)           $ (732,051) $ (662,540) $ (599,723)  
Amortization of ESOP shares 5,687           (27,605) 33,292          
Amortization of restricted stock awards 41,770           41,770            
Balances, ending at Sep. 30, 2024 $ 44,564,392       $ 39,733 $ 198,492 $ 176,029,053 $ (1,664,624) $ (128,662,378)       $ (1,375,884)
Balances, shares, ending at Sep. 30, 2024         3,973,310 19,849,165              
v3.24.3
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares
 3 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Series B Preferred Stock [Member]          
Preferred stock dividends declared per share $ 0.5   $ 0.5 $ 0.5 $ 0.5
Series C Preferred Stock [Member]          
Preferred stock dividends declared per share 0.492188 $ 0.492188 0.492188 0.492188 0.492188
Series D Preferred Stock [Member]          
Preferred stock dividends declared per share $ 0.515625 $ 0.515625 $ 0.515625 $ 0.515625 $ 0.515625
v3.24.3
Consolidated Statements of Cash Flows - USD ($)
 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Cash flows from operating activities:    
Net income $ 2,297,431 $ 4,579,359
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation and amortization 14,447,789 14,056,523
Amortization of deferred financing costs 528,485 448,467
Amortization of mortgage premium (18,511) (18,511)
Gain on involuntary conversion of assets (267,574) (1,331,374)
Unrealized loss on hedging activities 1,119,247 51,686
Loss on early extinguishment of debt 241,878  
PPP loan forgiveness   (275,494)
Gain on disposal of assets (4,400) (4,700)
ESOP and stock / unit - based compensation 351,193 370,714
Changes in assets and liabilities:    
Accounts receivable 2,759,725 1,086,903
Prepaid expenses, inventory and other assets (80,121) (1,350,705)
Accounts payable and other accrued liabilities (358,974) 236,206
Advance deposits 264,030 639,444
Net cash provided by operating activities 21,417,328 18,488,518
Cash flows from investing activities:    
Improvements and additions to hotel properties (10,106,127) (6,069,672)
Proceeds from involuntary conversion 267,574 1,312,675
Proceeds from sale of assets 4,400 141,952
Net cash used in investing activities (9,834,153) (4,615,045)
Cash flows from financing activities:    
Proceeds from mortgage loans 66,250,000 2,715,833
Redemption of interest rate swap 965,000  
Payments on mortgage loans (63,203,234) (5,580,239)
Payments on unsecured notes (630,529) (554,965)
Purchase of interest rate cap (916,000)  
Payments on finance lease liabilities (28,654)  
Payments of deferred financing costs (1,767,406) (413,909)
Preferred dividends paid (5,982,938) (7,977,251)
Net cash used in financing activities (5,313,761) (11,810,531)
Net increase in cash, cash equivalents and restricted cash 6,269,414 2,062,942
Cash, cash equivalents and restricted cash at the beginning of the period 26,236,340 27,341,630
Cash, cash equivalents and restricted cash at the end of the period 32,505,754 29,404,572
Supplemental disclosures:    
Cash paid during the period for interest 15,272,598 12,619,680
Cash paid during the period for income taxes 140,536 614,231
Non-cash investing and financing activities:    
Accrued capital expenditures 206,105 8,684
Remeasurement of finance lease asset and liability 22,352,075  
Acquisition of finance lease assets and liabilities 179,364  
Negative lease amortization 137,130  
Sotherly Hotels LP [Member]    
Cash flows from operating activities:    
Net income 2,297,431 4,579,359
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation and amortization 14,447,789 14,056,523
Amortization of deferred financing costs 528,485 448,467
Amortization of mortgage premium (18,511) (18,511)
Gain on involuntary conversion of assets (267,574) (1,331,374)
Unrealized loss on hedging activities 1,119,247 51,686
Loss on early extinguishment of debt 241,878  
PPP loan forgiveness   (275,494)
Gain on disposal of assets (4,400) (4,700)
ESOP and stock / unit - based compensation 262,666 239,754
Changes in assets and liabilities:    
Accounts receivable 2,759,725 1,086,903
Prepaid expenses, inventory and other assets (80,121) (1,350,705)
Accounts payable and other accrued liabilities (358,974) 236,206
Advance deposits 264,030 639,444
Net cash provided by operating activities 21,328,801 18,357,558
Cash flows from investing activities:    
Improvements and additions to hotel properties (10,106,127) (6,069,672)
ESOP loan payments received 88,527 130,960
Proceeds from involuntary conversion 267,574 1,312,675
Proceeds from sale of assets 4,400 141,952
Net cash used in investing activities (9,745,626) (4,484,085)
Cash flows from financing activities:    
Proceeds from mortgage loans 66,250,000 2,715,833
Redemption of interest rate swap 965,000  
Payments on mortgage loans (63,203,234) (5,580,239)
Payments on unsecured notes (630,529) (554,965)
Purchase of interest rate cap (916,000)  
Payments on finance lease liabilities (28,654)  
Payments of deferred financing costs (1,767,406) (413,909)
Preferred dividends paid (5,982,938) (7,977,251)
Net cash used in financing activities (5,313,761) (11,810,531)
Net increase in cash, cash equivalents and restricted cash 6,269,414 2,062,942
Cash, cash equivalents and restricted cash at the beginning of the period 26,236,340 27,341,630
Cash, cash equivalents and restricted cash at the end of the period 32,505,754 29,404,572
Supplemental disclosures:    
Cash paid during the period for interest 15,272,598 12,678,642
Cash paid during the period for income taxes 140,536 614,231
Non-cash investing and financing activities:    
Accrued capital expenditures 206,105 $ 8,684
Remeasurement of finance lease asset and liability 22,352,075  
Acquisition of finance lease assets and liabilities 179,364  
Negative lease amortization $ 137,130  
v3.24.3
Consolidated Statements of Changes in Partners' Capital - USD ($)
Total
Sotherly Hotels LP [Member]
Sotherly Hotels LP [Member]
General Partner [Member]
Sotherly Hotels LP [Member]
Limited Partner [Member]
Sotherly Hotels LP [Member]
Preferred Units [Member]
Sotherly Hotels LP [Member]
Preferred Units [Member]
Series B Preferred Units [Member]
Sotherly Hotels LP [Member]
Preferred Units [Member]
Series C Preferred Units [Member]
Sotherly Hotels LP [Member]
Preferred Units [Member]
Series D Preferred Units [Member]
Balances, beginning at Dec. 31, 2022   $ 54,171,249 $ (106,022) $ (39,143,494)   $ 34,344,086 $ 31,571,778 $ 27,504,901
Balances, units, beginning at Dec. 31, 2022     197,767 19,578,946 3,973,310      
Amortization of restricted unit awards $ 22,883 22,883 $ 229 $ 22,654        
Unit based compensation   185,637 $ 1,857 $ 183,780        
Unit based compensation, number of units     2,843 281,435        
Net Income (loss) 1,387,514 1,387,514 $ 13,875 $ 1,373,639        
Balances, ending at Mar. 31, 2023   55,767,283 $ (90,061) $ (37,563,421)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Mar. 31, 2023     200,610 19,860,381 3,973,310      
Balances, beginning at Dec. 31, 2022   54,171,249 $ (106,022) $ (39,143,494)   34,344,086 31,571,778 27,504,901
Balances, units, beginning at Dec. 31, 2022     197,767 19,578,946 3,973,310      
Net Income (loss) 4,579,359 4,579,359            
Balances, ending at Sep. 30, 2023   53,007,424 $ (117,659) $ (40,295,682)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Sep. 30, 2023     205,220 19,855,771 3,973,310      
Balances, beginning at Mar. 31, 2023   55,767,283 $ (90,061) $ (37,563,421)   34,344,086 31,571,778 27,504,901
Balances, units, beginning at Mar. 31, 2023     200,610 19,860,381 3,973,310      
Amortization of restricted unit awards 41,771 41,770 $ 417 $ 41,353        
Preferred distributions paid   (3,988,625) (39,886) (3,948,739)        
Unit based compensation   (27,022) (270) (26,752)        
Net Income (loss) 5,257,670 5,257,670 52,577 5,205,093        
Balances, ending at Jun. 30, 2023   57,051,076 $ (77,223) $ (36,292,466)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Jun. 30, 2023     200,610 19,860,381 3,973,310      
Amortization of restricted unit awards 41,770 41,770 $ 418 $ 41,352        
Preferred distributions paid   (1,994,312) (19,943) (1,974,369)        
Unit based compensation   (25,284) $ (253) $ (25,031)        
Conversion of units in operating partnership to shares of common stock, number of units     4,610 (4,610)        
Net Income (loss) (2,065,826) (2,065,826) $ (20,658) $ (2,045,168)        
Balances, ending at Sep. 30, 2023   53,007,424 $ (117,659) $ (40,295,682)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Sep. 30, 2023     205,220 19,855,771 3,973,310      
Balances, beginning at Dec. 31, 2023   49,643,191 $ (171,830) $ (43,605,744)   34,344,086 31,571,778 27,504,901
Balances, units, beginning at Dec. 31, 2023     205,220 19,855,771 3,973,310      
Amortization of restricted unit awards 44,270 44,270 $ 443 $ 43,827        
Preferred distributions paid   (1,994,313) (19,943) (1,974,370)        
Unit based compensation   174,252 $ 1,742 $ 172,510        
Unit based compensation, number of units     1,524 150,836        
Net Income (loss) 1,322,821 1,322,821 $ 23,869 $ 1,298,952        
Balances, ending at Mar. 31, 2024   49,190,221 $ (165,719) $ (44,064,825)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Mar. 31, 2024     206,744 20,006,607 3,973,310      
Balances, beginning at Dec. 31, 2023   49,643,191 $ (171,830) $ (43,605,744)   34,344,086 31,571,778 27,504,901
Balances, units, beginning at Dec. 31, 2023     205,220 19,855,771 3,973,310      
Net Income (loss) 2,297,431 2,297,431            
Balances, ending at Sep. 30, 2024   46,220,397 $ (215,260) $ (46,985,108)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Sep. 30, 2024     206,744 20,006,607 3,973,310      
Balances, beginning at Mar. 31, 2024   49,190,221 $ (165,719) $ (44,064,825)   34,344,086 31,571,778 27,504,901
Balances, units, beginning at Mar. 31, 2024     206,744 20,006,607 3,973,310      
Amortization of restricted unit awards 41,770 41,770 $ 418 $ 41,352        
Preferred distributions paid   (1,994,310) (19,943) (1,974,367)        
Unit based compensation   (21,908) (219) (21,689)        
Net Income (loss) 4,664,232 4,664,232 30,146 4,634,086        
Balances, ending at Jun. 30, 2024   51,880,005 $ (155,317) $ (41,385,443)   34,344,086 31,571,778 27,504,901
Balances, units, ending at Jun. 30, 2024     206,744 20,006,607 3,973,310      
Amortization of restricted unit awards 41,770 41,770 $ 418 $ 41,352        
Preferred distributions paid   (1,994,313) (19,943) (1,974,370)        
Unit based compensation   (17,444) (170) (17,274)        
Net Income (loss) $ (3,689,621) (3,689,621) (40,248) (3,649,373)        
Balances, ending at Sep. 30, 2024   $ 46,220,397 $ (215,260) $ (46,985,108)   $ 34,344,086 $ 31,571,778 $ 27,504,901
Balances, units, ending at Sep. 30, 2024     206,744 20,006,607 3,973,310      
v3.24.3
Pay vs Performance Disclosure - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Pay vs Performance Disclosure        
Net Income (Loss) $ (3,609,448) $ (1,909,268) $ 2,341,571 $ 4,630,079
v3.24.3
Insider Trading Arrangements
 3 Months Ended
Sep. 30, 2024
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.24.3
Organization and Description of Business
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Organization and Description of Business

1. Organization and Description of Business

Sotherly Hotels Inc. (the “Company”) is a self-managed and self-administered lodging real estate investment trust (“REIT”) that was incorporated in Maryland on August 20, 2004. The Company historically has focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the southern United States. The Company’s portfolio, as of September 30, 2024, consisted of investments in ten hotel properties, comprising 2,786 rooms and two hotel commercial condominium units and their associated rental programs. Seven of our hotels operated under the Hilton, DoubleTree, and Hyatt brands, and three are independent hotels.

The Company commenced operations on December 21, 2004, when it completed its initial public offering and thereafter consummated the acquisition of six hotel properties (the “Initial Properties”). Substantially all of the Company’s assets are held by, and all of its operations are conducted through, Sotherly Hotels LP (the “Operating Partnership”).

Pursuant to the terms of the Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) of the Operating Partnership, the Company, as general partner, is not entitled to compensation for its services to the Operating Partnership. The Company, as general partner, conducts substantially all of its operations through the Operating Partnership and the Company’s administrative expenses are the obligations of the Operating Partnership. Additionally, the Company is entitled to reimbursement for any expenditure incurred by it on the Operating Partnership’s behalf.

For the Company to qualify as a REIT, it cannot operate hotels. Therefore, the Operating Partnership, which at September 30, 2024 was approximately 98.2% owned by the Company, and its subsidiaries, lease its hotels to direct and indirect subsidiaries of MHI Hospitality TRS Holding, Inc., MHI Hospitality TRS, LLC and certain of its subsidiaries (collectively, “MHI TRS Entities”), each of which is a wholly-owned subsidiary of the Operating Partnership. The MHI TRS Entities have engaged Our Town Hospitality, LLC (“Our Town”), an eligible independent management company, to operate the hotels under management contracts. MHI Hospitality TRS Holding, Inc. (“MHI TRS”) is treated as a taxable REIT subsidiary for federal income tax purposes.

All references in these “Notes to Consolidated Financial Statements” to “we”, “us”, “our” and “Sotherly” refer to the Company, its Operating Partnership and its subsidiaries and predecessors, collectively, unless the context otherwise requires or where otherwise indicated.

Overview of Significant Transactions

Significant transactions occurring during the current nine-month period and prior fiscal year include the following:

 

On February 26, 2023, the Company entered into amended loan documents to modify the mortgage loan on The Whitehall hotel located in Houston, TX with the lender, International Bank of Commerce. The amendment (i) extends the maturity date to February 26, 2028; (ii) maintains a floating interest rate of New York Prime Rate plus 1.25%; and (iii) subjects the interest rate to a floor rate of 7.50%. The mortgage loan continues to be guaranteed by the Operating Partnership. The amendment also required us to establish a real estate tax reserve as well as a debt service reserve that approximates the aggregate amount of one year's debt service, which was initially established at approximately $1.5 million.

 

On March 14, 2023, the Company entered into amended loan documents to modify the mortgage loan on the DoubleTree by Hilton Philadelphia Airport with the lender, TD Bank, N.A. The amendment provided a waiver for non-compliance with financial covenants for the periods ended September 30 and December 31, 2022, modified the reference rate replacing 1-month LIBOR with SOFR and required us to establish a debt service coverage reserve of $0.3 million.

 

On May 4, 2023, affiliates of the Company entered into loan documents to secure a $10.0 million mortgage loan on the DoubleTree by Hilton Laurel hotel located in Laurel, MD with Citi Real Estate Funding Inc. Pursuant to the loan documents, the mortgage loan: (i) has a principal balance of $10.0 million; (ii) has a maturity date of May 6, 2028; (iii) carries a fixed interest rate of 7.35%; (iv) requires payments of interest only; (v) cannot be prepaid until the last 4 months of the loan term; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan.

 

On February 7, 2024, affiliates of the Company entered into loan documents to secure a $35.0 million mortgage loan on the Hotel Alba Tampa located in Tampa, Florida with Citi Real Estate Funding Inc. The Company received approximately $10.2 million in net proceeds. Pursuant to the loan documents, the mortgage loan: (i) has a principal balance of $35.0 million; (ii) has a 5 year term maturing on March 6, 2029; (iii) carries a fixed interest rate of 8.49%; (iv) requires payments of interest only; (v) is guaranteed by the Operating Partnership only for traditional “bad boy” acts; (vi) cannot be prepaid until the last four months of the term; and (vii) contains customary representations, warranties, covenants and events of default for a mortgage loan.

On April 29, 2024, the Company entered into a loan amendment to amend the existing mortgage on the DoubleTree by Hilton Philadelphia Airport hotel with the existing lender, TD Bank, N.A. Pursuant to the amended loan documents, the mortgage loan: (i) has a principal balance of approximately $35.9 million; (ii) extends the maturity by two years to April 29, 2026; (iii) continues to carry a floating interest rate of SOFR plus 3.50%; (iv) requires payments of interest only; (v) continues to be guaranteed by the Operating Partnership; and (vi) contains customary representations, warranties, covenants and events of default for a mortgage loan. Concurrent with the execution of the loan amendment, the Company (i) made a principal payment of $3.0 million; (ii) funded $0.3 million to the interest reserve escrow, bringing the balance in the interest reserve escrow account to $1.3 million; (iii) funded $5.0 million into a product improvement plan ("PIP") reserve account; and (iv) provided $1.7 million in additional cash collateral, of which $1.2 million can be released into the PIP reserve account as early as June 30, 2025 assuming compliance with the financial covenants. On May 3, 2024, an affiliate of the Company entered into an interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026.

On July 8, 2024, we secured a $26.25 million mortgage loan on the DoubleTree by Hilton Jacksonville Riverfront hotel located in Jacksonville, Florida with Fifth Third Bank, N.A. The loan provides for an additional $9.49 million available to fund a product improvement plan at the hotel; matures on July 8, 2029; and requires monthly payments of interest at a floating interest rate of SOFR plus 3.00% plus principal of $38,700.

On August 14, 2024, we secured a $5.0 million second mortgage loan on The DeSoto hotel located in Savannah, Georgia with MONY Life Insurance Company. The loan has a maturity date of July 1, 2026 and requires level payments of principal and interest at a fixed interest rate of 7.50% and amortizing on a 25-year schedule. Proceeds of the loan were used for working capital.
v3.24.3
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation – The consolidated financial statements of the Company presented herein include all of the accounts of Sotherly Hotels Inc., the Operating Partnership, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The consolidated financial statements of the Operating Partnership presented herein include all of the accounts of Sotherly Hotels LP, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. Additionally, all administrative expenses of the Company and those expenditures made by the Company on behalf of the Operating Partnership are reflected as the administrative expenses, expenditures and obligations thereto of the Operating Partnership, pursuant to the terms of the Partnership Agreement.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. The Company has mortgages maturing during 2025 with balances at maturity totaling approximately $87.5 million which it will be unable to repay out of working capital. As discussed in Note 4, Debt, the Company intends to repay the mortgage obligations when they become due through a combination of proceeds from a refinance of the properties and working capital. Further, as of September 30, 2024, we failed to maintain compliance with the financial covenants under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront. Per the terms of the mortgage loan agreement, we are permitted either to reduce the outstanding balance with a prepayment estimated at no more than $1.2 million or provide an equivalent amount of cash collateral until we return to compliance. We anticipate the placement of cash collateral with the lender before the end of December 2024. We believe these plans will be effectively implemented.

 

Variable Interest Entities – The Operating Partnership is a variable interest entity. The Company’s only significant asset is its investment in the Operating Partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership and its subsidiaries. All of the Company’s debt is an obligation of the Operating Partnership and its subsidiaries.

Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at fair value on the acquisition date and allocated to land, property and equipment and identifiable intangible assets. If substantially all the fair value of the gross assets acquired are concentrated in a single identifiable asset, the asset is not considered a business. When we

conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired asset. We capitalize the costs of significant additions and improvements that materially upgrade, increase the value of or extend the useful life of the property. These costs may include refurbishment, renovation, and remodeling expenditures, as well as certain direct internal costs related to construction projects. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation are removed from our accounts and any resulting gain or loss is included in the statements of operations.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 7 to 39 years for buildings and building improvements and 3 to 10 years for furniture, fixtures and equipment.

The Company assesses the carrying value of its investments in hotel properties whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse permanent changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceeds its carrying value. If the estimated undiscounted future cash flows are found to be less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value would be recorded and an impairment loss recognized.

The Company recognized no impairment losses for the nine months ended September 30, 2024 and 2023.

Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows, mortgage servicing and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements.

 

 

 

 

As of

 

 

As of

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

Cash and cash equivalents

 

 

$

14,017,642

 

 

$

19,198,625

 

Restricted cash

 

 

 

18,488,112

 

 

 

10,205,947

 

Cash, cash equivalents and restricted cash at the end of the period

 

 

$

32,505,754

 

 

$

29,404,572

 

Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) protection limits of $250,000. Our exposure to credit loss in the event of the failure of these institutions is represented by the FDIC protection limit and the total amounts on deposit. Management monitors, on a regular basis, the financial condition of the financial institutions along with the balances there on deposit to minimize our potential risk.

Accounts Receivable – Accounts receivable consists primarily of amounts due from hotel guests including payments rendered by credit card for which we are awaiting payment from the merchant processor. Most of our revenue is collected through payment by cash or credit card on or in advance of the date of service, with limited extension of credit to a small number of customers. An allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible.

Inventories – Inventories, consisting primarily of food and beverages, are stated at the lower of cost or net realizable value, with cost determined on a method that approximates first-in, first-out basis.

Franchise License Fees – Fees expended to obtain or renew a franchise license are amortized over the life of the license or renewal. The unamortized franchise fees as of September 30, 2024 and December 31, 2023 were $322,812 and $195,988, respectively. Amortization expense for the three months ended September 30, 2024 and 2023, each totaled $11,059, and for the nine months ended September 30, 2024 and 2023, totaled $33,176 and $33,991, respectively.

Deferred Financing Costs – Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt and are reflected in mortgage loans, net and unsecured notes, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in advance of issuing equity and are reflected in prepaid expenses, inventory and other assets on the consolidated balance sheets. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations.

Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the consolidated balance sheets and measured at fair value. Derivative instruments used to hedge the exposure to changes in the fair value of an asset, liability, or firm

commitment attributable to a particular risk, such as an interest rate risk, are considered fair value hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For a derivative instrument designated as a cash flow hedge, the change in fair value each period is reported in accumulated other comprehensive income in stockholders’ equity and partners’ capital to the extent the hedge is effective. For a derivative instrument designated as a fair value hedge, the change in fair value each period is reported in earnings along with the change in fair value of the hedged item attributable to the risk being hedged. For a derivative instrument that does not qualify for hedge accounting or is not designated as a hedge, the change in fair value each period is reported in earnings.

We use derivative instruments to add stability to interest expense and to manage our exposure to interest-rate movements. To accomplish this objective, we currently use interest rate swaps which act as cash flow hedges and are not designated as hedges. We value our interest rate swaps at fair value, which we define as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We do not enter into contracts to purchase or sell derivative instruments for speculative trading purposes.

Fair Value Measurements –

We classify the inputs used to measure fair value into the following hierarchy:

 

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3

Unobservable inputs for the asset or liability.

 

We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table represents our assets and liabilities measured at fair value and the basis for that measurement (our interest rate swaps are the only assets or liabilities measured at fair value on a recurring basis; there were no non-recurring assets or liabilities for fair value measurements as of September 30, 2024 and December 31, 2023, respectively):

 

September 30, 2024

 

December 31, 2023

 

 

Carrying Amount

 

Fair Value

 

Carrying Amount

 

Fair Value

 

Financial Assets

 

 

 

 

 

 

 

 

Interest-rate swap(1)

$

—

 

$

—

 

$

627,676

 

$

627,676

 

 

 

 

 

 

 

 

 

 

Interest-rate cap(2)

$

312,468

 

$

312,468

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

 

 

 

Mortgage loans

$

(318,061,006

)

$

(310,847,559

)

$

(315,989,194

)

$

(303,949,790

)

(1)
The interest-rate swap agreement allowed the Company to receive a variable rate of interest based upon 1-month SOFR in exchange for a fixed rate of 2.826% on a notional amount which approximated the declining balance of the mortgage loan on the Hotel Alba. The interest-rate swap was terminated on February 14, 2024.
(2)
The interest-rate cap agreement allows the Company to receive a variable rate of interest based upon the amount in which 1-month SOFR exceeds 3.0% on a notional amount of $26.0 million on the DoubleTree by Hilton Philadelphia Airport. The interest rate cap terminates on May 1, 2026.

 

 

The fair value of the Company’s interest rate swap and cap agreements were determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. The variable cash receipts are based on an expectation of future interest rates (forward yield curves) derived from observable market interest rates.

 

The Company estimates the fair value of its mortgage loans by discounting the future cash flows of each loan at estimated market rates consistent with the maturity of a mortgage loan with similar credit terms and credit characteristics, which are Level 2 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity.

 

Noncontrolling Interest in Operating Partnership – Certain hotel properties were acquired, in part, by the Operating Partnership through the issuance of limited partnership units of the Operating Partnership. The noncontrolling interest in the Operating Partnership is: (i) increased or decreased by the limited partners’ pro-rata share of the Operating Partnership’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by redemption of partnership units for the Company’s common stock; and (iv) adjusted to equal the net equity of the Operating Partnership multiplied by the limited partners’ ownership percentage immediately after each issuance of units of the Operating Partnership and/or the Company’s common stock through an adjustment to additional paid-in capital. Net income or net loss is allocated to the noncontrolling interest in the Operating Partnership based on the weighted average percentage ownership throughout the period.

Revenue Recognition – Revenue consists of amounts derived from hotel operations, including the rental of rooms, sales of food and beverage, and other ancillary services. Room revenue is recognized over a customer’s hotel stay. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the point in time or over the time period that goods or services are provided to the customer. Some contracts for rooms or food and beverage services require an upfront deposit which is recorded as advanced deposits (or contract liabilities) shown on our consolidated balance sheets and recognized once the performance obligations are satisfied.

Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the gross commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. With respect to the hotel condominium rental programs that the Company operates at the Lyfe Resort & Residences (f/k/a Hyde Resort & Residences) and Hyde Beach House Resort & Residences, the Company has determined that it is an agent and recognizes revenue based on its share of revenue earned under the rental agency agreement.

The Company collects sales, use, occupancy and similar taxes at its hotels which are presented on a net basis on the consolidated statements of operations.

Leases – We determine whether an arrangement is a lease at its inception and determine their classification as operating or finance leases. These leases are classified on the consolidated balance sheets as “right of use assets”, which represent our right to use the underlying asset. The corresponding operating lease liability, which represent our obligation to make lease payments under the lease agreement, is classified as finance lease liabilities or within accounts payable and other accrued liabilities for operating leases on the consolidated balance sheets. Right of use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the right of use assets and lease liabilities are recognized in the period in which the obligation for those payments is incurred. As many of our leases do not provide an implicit financing rate, we use our incremental borrowing cost based on information available at the commencement date using our actual borrowing rates commensurate with the lease terms and fully levered borrowing to determine present value, when the implicit rate is not determinable. Extension options on our leases are included in our minimum lease terms when they are reasonably certain to be exercised. Subsequent to the initial recognition, lease liabilities are measured using the effective interest method. The right-of-use ("ROU") asset is generally amortized utilizing a straight-line method adjusted for the lease liability accretion during the period.

Income Taxes – The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally will not be subject to federal income tax. MHI TRS, our wholly owned taxable REIT subsidiary which leases our hotels from subsidiaries of the Operating Partnership, is subject to federal and state income taxes.

We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is required for deferred tax assets if, based on all available evidence, it is “more-likely-than-not” that all or a portion of the deferred tax asset will or will not be realized due to the inability to generate sufficient taxable income in certain financial statement periods. The “more-likely-than-not” analysis means the likelihood of realization is greater than 50%, that we either will or will not be able to fully utilize the deferred tax assets against future taxable income. The net amount of deferred tax assets that are recorded on the financial statements must reflect the tax benefits that are expected to be realized using these criteria. As of September 30, 2024, we have determined that it is more-likely-than-not that we will not be able to fully utilize our deferred tax assets for future tax consequences, therefore a 100% valuation allowance is required. As of September 30, 2024 and December 31, 2023, deferred tax assets each totaled $0.

As of September 30, 2024 and December 31, 2023, we had no uncertain tax positions. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2024, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2011 through 2023. In addition, as of September 30, 2024, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject, because of open NOL carryforwards, generally include 2009 through 2023.

The Operating Partnership is generally not subject to federal and state income taxes as the unit holders of the Partnership are subject to tax on their respective shares of the Partnership’s taxable income.

Stock-based Compensation – The Company’s 2022 Long-Term Incentive Plan (the “2022 Plan”), which the Company’s stockholders approved in April 2022, permits the grant of stock options, restricted stock, unrestricted stock and service/performance share compensation awards to its employees and directors for up to 2,000,000 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its stockholders.

Under the 2022 Plan, the Company may issue a variety of service or performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of September 30, 2024, the Company has made cumulative awards totaling 604,028 shares to certain executives and its independent directors, of which 232,750 were originally restricted. As of September 30, 2024, 135,000 shares remain restricted and will fully vest in March 2027. Total compensation cost recognized under the 2022 Plan for each of the three months ended September 30, 2024 and 2023 was each $18,888, and for the nine months ended September 30, 2024 and 2023 was $264,087 and $263,161, respectively.

The Company’s 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permits the grant of stock options, restricted stock, unrestricted stock and service or performance share compensation awards to its employees and directors for up to 750,000 shares of common stock. All future awards will be made under the 2022 Plan.

As of September 30, 2024, under the 2013 Plan, the Company has made cumulative service-based stock awards totaling 745,160 shares, of which 316,333 were originally restricted. All awards have vested except for 45,000 shares issued to certain employees, which will vest on December 31, 2024. The remaining 4,840 shares have been deregistered.

Under the 2013 Plan, the Company was able to issue a variety of performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of September 30, 2024, no performance-based stock awards have been granted. Total compensation cost recognized under the 2013 Plan for each of the three months ended September 30, 2024 and 2023 was $22,883, and for each of the nine months ended September 30, 2024 and 2023, was $68,648.

Additionally, the Company sponsors and maintains an Employee Stock Ownership Plan (“ESOP”) and related trust for the benefit of its eligible employees. We reflect unearned ESOP shares as a reduction of stockholders’ equity. Dividends on unearned ESOP shares, when paid, are considered a compensation expense. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they are committed to be released. For the three months ended September 30, 2024 and 2023, the ESOP compensation cost was $5,687 and $13,992, respectively, and for the nine months ended September 30, 2024 and 2023, the ESOP compensation cost was $18,505 and $38,905, respectively. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements.

Advertising – Advertising costs, including internet advertising, were $701,142 and $644,111 for the three months ended September 30, 2024 and 2023, respectively, and were $2,116,737 and $2,039,089 for the nine months ended September 30, 2024 and 2023, respectively. Advertising costs are expensed as incurred.

Involuntary Conversion of Assets – We record gains or losses on involuntary conversions of assets due to recovered insurance proceeds to the extent the undepreciated cost of a nonmonetary asset differs from the amount of monetary proceeds received. The gain on involuntary conversion of assets is reflected in the consolidated statements of operations.

Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income.

Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership.

Use of Estimates – The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

New Accounting Pronouncements –

In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). ASU 2023-06 incorporates 14 of the 27 disclosure requirements published in SEC Release No. 33-10532 - Disclosure Update and Simplification into various topics within the Accounting Standards Codification ("ASC"). ASU 2023-06's amendments represent clarifications to, or technical corrections of, current requirements. For SEC registrants, the effective date for each amendment will vary based on the date on which the SEC removes that related disclosure from its rules. If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the ASC and will not be effective. Early adoption is prohibited. The Company is currently assessing the potential impacts of ASU 2023-06 and does not expect it to have a material effect on its consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impacts of adopting ASU 2023-07 on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, with the option to apply retrospectively. The Company is currently assessing the impacts of adopting ASU 2023-09 on its consolidated financial statements and disclosures.

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), to clarify the scope application of profits interest and similar awards by adding illustrative guidance in ASC 718, Compensation—Stock Compensation ("ASC 718"). ASU 2024-01 clarifies how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement (ASC 718) or as a cash bonus or profit-sharing arrangement (ASC 710, Compensation—General, or other guidance) and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees. In addition to adding the illustrative guidance, ASU 2024-01 modified the language in paragraph 718-10-15-3 to improve its clarity and operability without changing the guidance. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, including interim periods within those annual periods. Early adoption is permitted. The amendments should be applied either retrospectively to all prior periods presented in the financial statements, or prospectively to profits interests and similar awards granted or modified on or after the adoption date. The Company is currently assessing the impacts of adopting ASU 2024-01 on its consolidated financial statements and disclosures.

In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The amendments improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales and research and development). The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that adopting ASU 2024-03 will have on its consolidated financial statements and disclosures.

v3.24.3
Investment in Hotel Properties, Net
 9 Months Ended
Sep. 30, 2024
Real Estate [Abstract]  
Investment in Hotel Properties, Net

3. Investment in Hotel Properties, Net

Investment in hotel properties, net as of September 30, 2024 and December 31, 2023 consisted of the following:

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

 

 

 

 

 

Land and land improvements

 

$

61,349,993

 

 

$

61,114,486

 

Buildings and improvements

 

 

429,293,211

 

 

 

418,833,706

 

Right of use assets

 

 

4,054,169

 

 

 

4,733,406

 

Finance lease right of use assets

 

 

22,921,630

 

 

 

—

 

Furniture, fixtures and equipment

 

 

50,034,059

 

 

 

51,501,629

 

 

 

 

567,653,062

 

 

 

536,183,227

 

Less: accumulated depreciation

 

 

(194,700,149

)

 

 

(181,264,121

)

Investment in Hotel Properties, Net

 

$

372,952,913

 

 

$

354,919,106

 
v3.24.3
Debt
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Debt

4. Debt

Mortgage Loans, Net. As of September 30, 2024 and December 31, 2023, we had approximately $318.1 million and approximately $316.0 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels.

 

 

Balance Outstanding as of

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

Prepayment

 

Maturity

 

Amortization

 

Interest

 

Property

2024

 

 

2023

 

 

Penalties

 

Date

 

Provisions

 

Rate

 

The DeSoto (1)

$

29,493,868

 

 

$

30,248,929

 

 

Yes

 

7/1/2026

 

25 years

 

4.25%

 

The DeSoto (2)

 

5,000,000

 

 

 

-

 

 

Yes

 

7/1/2026

 

25 years

 

7.50%

 

DoubleTree by Hilton Jacksonville
   Riverfront (3)

 

26,172,600

 

 

 

31,749,695

 

 

None

 

7/8/2029

 

25 years

 

SOFR plus 3.00%

 

DoubleTree by Hilton Laurel (4)

 

10,000,000

 

 

 

10,000,000

 

 

(4)

 

5/6/2028

 

(4)

 

7.35%

 

DoubleTree by Hilton Philadelphia Airport (5)

 

35,915,488

 

 

 

38,915,488

 

 

None

 

4/29/2026

 

(5)

 

SOFR plus 3.50%

 

DoubleTree Resort by Hilton Hollywood
   Beach (6)

 

50,646,678

 

 

 

51,495,662

 

 

(6)

 

10/1/2025

 

30 years

 

4.913%

 

Georgian Terrace (7)

 

38,740,475

 

 

 

39,455,095

 

 

(7)

 

6/1/2025

 

30 years

 

4.42%

 

Hotel Alba Tampa, Tapestry Collection by Hilton (8)

 

35,000,000

 

 

 

24,269,200

 

 

(8)

 

3/6/2029

 

(8)

 

8.49%

 

Hotel Ballast Wilmington, Tapestry Collection by
   Hilton (9)

 

30,020,310

 

 

 

30,755,374

 

 

Yes

 

1/1/2027

 

25 years

 

4.25%

 

Hyatt Centric Arlington (10)

 

45,607,309

 

 

 

46,454,972

 

 

Yes

 

10/1/2028

 

30 years

 

5.25%

 

The Whitehall (11)

$

13,844,927

 

 

 

14,009,874

 

 

None

 

2/26/2028

 

25 years

 

PRIME plus 1.25%

 

Total Mortgage Principal Balance

$

320,441,655

 

 

$

317,354,289

 

 

 

 

 

 

 

 

 

 

Deferred financing costs, net

$

(2,405,023

)

 

 

(1,407,979

)

 

 

 

 

 

 

 

 

 

Unamortized premium on loan

$

24,374

 

 

 

42,884

 

 

 

 

 

 

 

 

 

 

Total Mortgage Loans, Net

$

318,061,006

 

 

$

315,989,194

 

 

 

 

 

 

 

 

 

 

(1)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date.

(2)

The note is a second mortgage that amortizes on a 25-year schedule. The note can be prepaid with penalty.

(3)

The note provides for an initial tranche in the amount of $26.25 million and a renovation tranche in the amount of $9.49 million.

(4)

The note requires payments of interest only and cannot be prepaid until the last 4 months of the loan term.

(5)

The note requires payments of interest only. On May 3, 2024, we entered into an interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026.

(6)

With limited exception, the note may not be prepaid prior to June 2025.

(7)

With limited exception, the note may not be prepaid prior to February 2025.

(8)

The note requires payments of interest only and cannot be prepaid until the last four months of the term.

(9)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date.

(10)

Following a 5-year lockout, the note can be prepaid with penalty in years 6-10 and without penalty during the final 4 months of the term.

(11)

The note bears a floating interest rate of New York Prime Rate plus 1.25%, with a floor of 7.50%.

 

As of September 30, 2024, we were in compliance with all debt covenants, current on all loan payments and not otherwise in default under any of our mortgage loans with the exception of a covenant default under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront. Per the terms of the mortgage loan agreement, we are permitted either to reduce the outstanding balance with a prepayment estimated at no more than $1.2 million or provide an equivalent amount of cash collateral until we return to compliance. Additionally, the mortgage on the Georgian Terrace and the DoubleTree Resort by Hilton Hollywood Beach mature in June 2025 and October 2025, respectively. We intend to refinance these mortgages, but may be required to reduce the level of indebtedness by an amount of up to $5.25 million on the refinance of the mortgage on the Georgian Terrace and up to $12.5 million for the mortgage on the

DoubleTree Resort by Hilton Hollywood Beach based on current and anticipated financial performance of the properties and anticipated market conditions.

 

Total future mortgage debt maturities for the remaining three and twelve-month periods, without respect to any extension of loan maturity or loan modification after September 30, 2024, were as follows:

 

For the remaining three months ended December 31, 2024

$

1,610,426

 

December 31, 2025

 

92,910,409

 

December 31, 2026

 

99,968,858

 

December 31, 2027

 

2,221,620

 

December 31, 2028

 

64,531,442

 

December 31, 2029

 

59,198,900

 

Total future maturities

$

320,441,655

 

PPP Loans. The Operating Partnership and certain of its subsidiaries have received PPP Loans administered by the U.S. Small Business Administration pursuant to the CARES Act. Each PPP Loan had an initial term of two years, with the ability extend the loan to five years, if not forgiven, and carries an interest rate of 1.00%. Equal payments of principal and interest begin no later than 10 months following origination of the loan and are amortized over the remaining term of the loan. Pursuant to the terms of the CARES Act, the proceeds of each PPP Loan may be used for payroll costs, mortgage interest, rent or utility costs. The promissory note for each PPP Loan contains customary events of default relating to, among other things, payment defaults and breach of representations and warranties or of provisions of the relevant promissory note. Under the terms of the CARES Act, each borrower can apply for and be granted forgiveness for all or a portion of the PPP Loan. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds in accordance with the terms of the CARES Act. No assurance is provided that any borrower will obtain forgiveness under any relevant PPP Loan in whole or in part.

On April 16, 2020, our Operating Partnership entered into a promissory note with Village Bank in connection with a PPP Loan and received proceeds of $333,500. The Company is required to make monthly payments of $18,000 through December 25, 2025.

On April 28, 2020, we entered into a promissory note and received proceeds of approximately $9.4 million under a PPP Loan from Fifth Third Bank, National Association. On December 9, 2022, the Company was notified it had received principal forgiveness in the amount of approximately $4.6 million and is required to make monthly payments of $56,809 through July 1, 2025 to extinguish the loan.

On May 6, 2020, we entered into a second promissory note with Fifth Third Bank, National Association and received proceeds of $952,700 under a PPP Loan. On February 3, 2023, the Company was notified it had received principal forgiveness in the amount of approximately $268,309 and is required to make monthly payments of $13,402 through May 6, 2025 to extinguish the loan.

At September 30, 2024 and December 31, 2023, the PPP loans had a cumulative balance of approximately $0.9 million and approximately $1.5 million, respectively.
v3.24.3
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

5. Commitments and Contingencies

Employment Agreements - The Company has entered into various employment contracts with employees that could result in obligations to the Company in the event of a change in control or termination without cause.

Management Agreements – As of September 30, 2024, our ten wholly-owned hotels, and our two condo-hotel rental programs, operated under management agreements with Our Town (see Note 8). The management agreements expire on March 31, 2035 and may be extended for up to two additional periods of five years each, subject to the approval of both parties. Each of the individual hotel management agreements may be terminated earlier than the stated term upon the sale of the hotel covered by the respective management agreement, in which case we may incur early termination fees.

Franchise Agreements – As of September 30, 2024, seven of our hotels operate under franchise licenses from national hotel companies. Under the franchise agreements, we are required to pay a franchise fee generally between 3.0% and 5.0% of room revenues, plus additional fees for marketing, central reservation systems, and other franchisor programs and services that amount to between 3.0% and 4.0% of gross revenues from the hotels. The franchise agreements currently in force expire between October 2024 and March 2038. Each of our franchise agreements provides for early termination fees in the event the agreement is terminated before the stated term.

Restricted Cash Reserves – Each month, we are required to escrow with the lenders on the Hotel Ballast, The DeSoto, the DoubleTree by Hilton Laurel, the DoubleTree by Hilton Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, the Hotel Alba, the Whitehall, the Hyatt Centric Arlington and the Georgian Terrace an amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties. The lenders on the DoubleTree Resort by Hilton Hollywood Beach as well as the Hotel Alba also require us to escrow an amount each month equal to one-twelfth (1/12) of the annual insurance premiums. Several of our lenders also required us to establish individual property improvement funds to cover the cost of replacing capital assets at our properties. Each month, those contributions equal 4.0% of gross revenues for the Hotel Ballast, The DeSoto, the DoubleTree by Hilton Laurel, the DoubleTree by Hilton Jacksonville Riverside, the DoubleTree Resort by Hilton Hollywood Beach, the Hotel Alba, The Whitehall and the Georgian Terrace and equal 4.0% of room revenues for the DoubleTree by Hilton Philadelphia Airport and the Hyatt Centric Arlington.

ESOP Loan Commitment – The Company’s board of directors approved the ESOP on November 29, 2016, which was adopted by the Company in December 2016 and effective January 1, 2016. The ESOP is a non-contributory defined contribution plan covering all employees of the Company. The ESOP is a leveraged ESOP, meaning funds are loaned to the ESOP from the Company. The Company entered into a loan agreement with the ESOP on December 29, 2016, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock on the open market. Under the loan agreement, the aggregate principal amount outstanding at any time may not exceed $5.0 million and the ESOP may borrow additional funds up to that limit in the future, until December 29, 2036. At September 30, 2024, the balance on the loan was approximately $1.7 million, leaving capacity for additional borrowing of approximately $3.3 million under the commitment.

Litigation –We are involved in routine litigation arising out of the ordinary course of business, all of which we expect to be covered by insurance and we believe it is not reasonably possible such matters will have a material adverse impact on our financial condition or results of operations or cash flows.
v3.24.3
Leases
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Leases

6. Leases

 

Lease Commitments – We are the lessee on certain ground leases, hotel equipment leases and office space leases. Leases with durations greater than 12 months are recognized on the balance sheet as ROU assets and lease liabilities. Our leases are classified as operating or finance leases. For leases with terms greater than 12 months, at inception of the lease, we recognize a ROU asset and lease liability at the estimated present value of the minimum lease payments over the lease term. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Many of our leases include rental escalation clauses (including fixed scheduled rent increases) and renewal options that are factored into the determination of lease payments, when appropriate, which adjusts the present value of the remaining lease payments. We determine the present value of the lease payments utilizing interest rates implicit in the lease, if determinable, or, if not, we estimate the incremental borrowing rate from information available at lease commencement, such as estimates of rates we would pay for senior collateralized loans with terms similar to each lease.

Operating Leases – The ROU asset operating leases that are connected to the hotel properties are primarily included in investment in hotel properties, net, with the related lease obligations included in accounts payable and accrued liabilities on the consolidated Balance Sheets. Other operating leases that are not connected to the hotel properties are reflected in prepaid expenses, inventory, and other assets with the related lease obligations included in accounts payable and accrued liabilities on the consolidated Balance Sheets. Lease expense is recognized on a straight-line basis over the term of the respective lease, and the value of each lease intangible is amortized over the term of the respective lease. Costs related to operating ground leases and hotel equipment leases are included in hotel operating expense and property taxes, insurance and other expense, and costs related to office space leases are included in general and administrative expense in our consolidated statements of operations.

As of September 30, 2024, the Company had the following significant operating leases:

We lease 2,086 square feet of commercial space next to The DeSoto for use as an office, retail or conference space, or for any related or ancillary purposes for the hotel and/or atrium space. In December 2007, we signed an amendment to the lease to include rights to the outdoor esplanade adjacent to the leased commercial space. The areas are leased under a six-year operating lease, which expired October 31, 2006 and has been renewed for the fourth of five optional five-year renewal periods expiring October 31, 2026. Rent expense for this operating lease for the three months ended September 30, 2024 and 2023, each totaled $20,983, and for the nine months ended September 30, 2024 and 2023, each totaled $62,949, and is included in indirect expenses.

We lease, as landlord, the entire fourteenth floor of The DeSoto hotel property to The Chatham Club, Inc. under a 99 year lease expiring July 31, 2086. This lease was assumed upon the purchase of the building under the terms and conditions agreed to by the previous owner of the property. No rental income is recognized under the terms of this lease as the original lump sum rent payment of $990 was received by the previous owner and not prorated over the life of the lease.

We lease land adjacent to the Hotel Alba Tampa for use as parking under a five-year renewable agreement with the Florida Department of Transportation that commenced in July 2009. In May 2014, we extended the agreement for an additional five years. We signed a new agreement in April 2019, which commenced in July 2019, goes for five years, and can be renewed for an additional five years. The new agreement expires in July 2024, requires annual payments of $2,432, plus tax, and may be renewed for an additional five years. Rent expense for the three months ended September 30, 2024 and 2023, totaled $636 and $651, respectively, and for the nine months ended September 30, 2024 and 2023 totaled $1,937 and $1,952, respectively, and is included in indirect expenses.

We lease approximately 8,500 square feet of commercial office space in Williamsburg, Virginia under an agreement with a ten-year term beginning January 1, 2020. The initial annual rent under the agreement was $218,875, with the rent for each successive annual period increasing by 3.0% over the prior annual period’s rent. The annual rent will be offset by a tenant improvement allowance of $200,000, to be applied against one-half of each monthly rent payment until such time as the tenant improvement allowance is exhausted. In December 2023, we received a rent concession of $257,731 against accrued and unpaid rents as well as a reduction of future lease payments by one-third. Rent expense for the three months ended September 30, 2024 and 2023 totaled $36,566 and $55,902, respectively, and for the nine months ended September 30, 2024 and 2023 totaled $109,699 and $167,706, respectively, and is included in general and administrative expenses.

We lease the parking garage and poolside cabanas associated with the Hyde Beach House. The parking and cabana lease requires us to make rental payments of $270,100 per year with increases of 5% every five years and has an initial term that expires in 2034 and which may be extended for four additional renewal periods of 5 years each. Rent expense for the three months ended September 30, 2024 and 2023, totaled $68,879 and $67,750, respectively, and for the nine months ended September 30, 2024 and 2023, totaled $204,379 and $203,250, respectively, and is included in indirect expenses.

Finance Leases – We lease the land underlying all of the Hyatt Centric Arlington hotel pursuant to a ground lease. The ground lease requires us to make rental payments of $50,000 per year in base rent and percentage rent equal to 3.5% of gross room revenue in excess of certain thresholds, as defined in the ground lease agreement. The initial term of the ground lease expires in July 2025 and may be extended for five additional rental periods of 10 years each. We have elected to exercise the renewal options for the first renewal period. Upon commencement of each renewal period, we will be required to make lease payments each year equal to 8.0% of the appraised value of the land. For the renewal period commencing July 2025, total annual lease payments will be $1,792,000.

Upon the determination of the lease payments commencing during the first renewal period, the lease was reassessed and remeasured as a finance lease, which we record as a finance lease asset within investment in hotel properties, net and finance lease liability on our consolidated balance sheets. As a result of the reassessment and remeasurement, we recognized a finance lease asset of $22,716,081 and a finance lease liability of $22,400,000. In addition, our finance lease asset balance includes unamortized intangible asset for the below market ground lease assumed in 2018 with the purchase of the hotel. The finance lease asset is amortized over the term of the lease including renewal periods. Costs related to the finance lease asset are included in depreciation and amortization expense and interest expense in the Company’s consolidated statements of operations.

As of September 30, 2024, the operating and finance lease term years, weighted-average discount rates, right of use assets and lease liabilities, are as follows:

 

 

 

September 30, 2024

 

 

 

 

Operating

 

Finance

 

Weighted-average remaining lease term, including reasonably certain extension options (years)

 

 

 

27.78

 

 

50.32

 

Weighted-average discount rate

 

 

 

8.02

%

 

7.37

%

 

 

 

 

 

 

 

Right of use assets

 

 

$

4,803,689

 

$

22,958,869

 

Lease liabilities

 

 

$

(4,803,689

)

$

(22,742,195

)

 

Lease Position as of September 30, 2024 and December 31, 2023 – The following tables set forth the lease-related assets and liabilities included in the Company’s consolidated balance sheets as of September 30, 2024 and December 31, 2023; as well as :

 

Assets

Balance Sheet Classification

September 30, 2024

 

December 31, 2023

 

 

 

 

 

 

 

Right of use assets

Prepaid expenses, inventory and other assets

$

749,520

 

$

822,203

 

Right of use assets

Investment in hotel properties, net

 

4,054,169

 

 

4,796,830

 

Finance lease right of use assets

Investment in hotel properties, net

 

22,958,869

 

 

-

 

 

 

 

 

 

 

Total lease assets

 

$

27,762,558

 

$

5,619,033

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Lease obligations under ROU assets

Accounts payable and accrued liabilities

 

4,803,689

 

 

5,041,019

 

Finance lease liabilities

Finance lease liabilities

 

22,742,195

 

 

-

 

Total lease liabilities

 

$

27,545,884

 

$

5,041,019

 

 

 

 

 

 

 

 

Lease Costs for the Three and Nine Months ended September 30, 2024 and 2023 – The following table sets forth the lease costs related to the Company’s operating and finance ground leases included in the Company’s consolidated statement of operations for the nine months ended September 30, 2024:

 

 

Consolidated Statement of Operations

Three Months Ended

 

Three Months Ended

 

Nine Months Ended

 

Nine Months Ended

 

 

Classification

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

Operating lease costs

 

 

 

 

 

 

 

 

 

Fixed

Corporate general and administrative

$

39,706

 

$

59,045

 

$

119,119

 

$

177,134

 

 

Hotel operating expenses - Other operating

 

68,126

 

 

67,750

 

 

204,379

 

 

203,250

 

 

Hotel operating expenses - Indirect

 

37,803

 

 

69,943

 

 

126,467

 

 

134,829

 

Variable

Hotel operating expenses - Indirect

 

158,301

 

 

152,074

 

 

416,849

 

 

456,224

 

 

 

 

 

 

 

 

 

 

 

Finance lease costs:

 

 

 

 

 

 

 

 

 

Amortization of lease assets

Depreciation and amortization

 

49,750

 

 

-

 

 

67,696

 

 

-

 

Variable

Hotel operating expenses - Indirect

 

58,054

 

 

-

 

 

58,054

 

 

-

 

Interest on lease liabilities

Interest expense

 

143,269

 

 

-

 

 

151,512

 

 

-

 

Total lease costs

 

$

555,009

 

$

348,812

 

$

1,144,076

 

$

971,437

 

 

 

Undiscounted Cash Flows –The following table reconciles the undiscounted cash flows for each of the next five years and total of the remaining years to the operating lease liabilities and finance lease liabilities included in the Company’s consolidated balance sheet as of September 30, 2024:

 

 

 

September 30, 2024

 

 

 

Operating

 

Financing

 

 

 

 

 

 

 

For the three months ending December 31, 2024

 

$

137,961

 

$

27,555

 

December 31, 2025

 

 

553,775

 

 

981,219

 

December 31, 2026

 

 

552,233

 

 

1,845,156

 

December 31, 2027

 

 

551,196

 

 

1,842,802

 

December 31, 2028

 

 

524,984

 

 

1,827,859

 

December 31, 2029

 

 

528,701

 

 

1,812,544

 

December 31, 2030 and thereafter

 

 

10,240,006

 

 

81,535,998

 

Total undiscounted lease payments

 

 

13,088,856

 

 

89,873,133

 

Less imputed interest

 

 

(8,285,167

)

 

(67,130,938

)

Total lease liability

 

$

4,803,689

 

$

22,742,195

 

 

Lease Revenue – Several of our properties generate revenue from leasing the restaurant space within the hotel and space on the roofs of our hotels for antennas and satellite dishes. Leases for the restaurant space within the hotel are leased under 10-year leases which expire between September 2027 and May 2034 and include two additional 5-year renewal options. The leases require periodic increases in base rent and may require payments of percentage rent as well. Leases for the space on the roofs of our hotels for antennas and satellite dishes are leased under various periods ranging from 1 year to 10 years with renewal options for as many as five additional 5-year periods, with some exceptions. As of September 30, 2024, the leases for space on the roofs of our hotels expire between December 2024 and May 2028. Several leases require periodic increases in base rent. We account for the lease income as revenue from other operating departments within the consolidated statements of operations pursuant to the terms of each lease. Lease revenue was approximately $0.3 million and $0.2 million for the three months ended September 30, 2024 and 2023, respectively, and for the nine months ended September 30, 2024 and 2023, totaled approximately $0.9 million and $0.8 million, respectively.

A schedule of minimum future lease payments receivable for the remaining three and twelve-month periods is as follows:

 

For the three months ending December 31, 2024

 

$

252,543

 

December 31, 2025

 

 

997,194

 

December 31, 2026

 

 

936,515

 

December 31, 2027

 

 

931,178

 

December 31, 2028

 

 

947,413

 

December 31, 2029

 

 

996,352

 

December 31, 2030 and thereafter

 

 

9,424,176

 

Total

 

$

14,485,371

 
v3.24.3
Preferred Stock and Units
 9 Months Ended
Sep. 30, 2024
Preferred Stock And Units [Abstract]  
Preferred Stock and Units

7. Preferred Stock and Units

Preferred Stock - The Company is authorized to issue up to 11,000,000 shares of preferred stock. The following table sets forth our Cumulative Redeemable Perpetual Preferred Stock by series:

 

 

 

Per

 

 

 

 

 

Number of Shares

 

 

Quarterly

 

 

 

Annum

 

 

Liquidation

 

 

Issued and Outstanding as of

 

 

Distributions

 

Preferred Stock - Series

 

Rate

 

 

Preference

 

 

September 30, 2024

 

 

December 31, 2023

 

 

Per Share

 

Series B Preferred Stock

 

 

8.000

%

 

$

25.00

 

 

 

1,464,100

 

 

 

1,464,100

 

 

$

0.500000

 

Series C Preferred Stock

 

 

7.875

%

 

$

25.00

 

 

 

1,346,110

 

 

 

1,346,110

 

 

$

0.492188

 

Series D Preferred Stock

 

 

8.250

%

 

$

25.00

 

 

 

1,163,100

 

 

 

1,163,100

 

 

$

0.515625

 

The Company is obligated to pay cumulative cash distributions on the preferred stock at rates in the above table per annum of the $25.00 liquidation preference per share. Holders of the Company’s preferred stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions. The preferred stock is not redeemable by the holders, has no maturity date and is not convertible into any other security of the Company or its affiliates. However, the Company, at its option, may redeem the preferred stock in part or in full for the amount of the liquidation preference plus any dividends in arrears as well as a pro-rata distribution for the portion of the quarterly period ending on the date of redemption.

On January 24, 2023, the Company announced its intention to resume quarterly payments of dividends on its preferred stock, following the suspension of the preferred dividends during the pandemic.

The total undeclared and unpaid cash dividends due on the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock as of September 30, 2024, are $8,052,550, $7,287,931 and $6,596,958, respectively. Undeclared preferred cumulative dividends are reported on the statements of operations but are not considered payable until declared. The preferred stock is considered permanent equity and distributions accrete as distributions are declared. As of September 30, 2024, the undeclared cumulative preferred dividends were approximately $21.9 million.

Preferred Units - The Company is the holder of the Operating Partnership’s preferred partnership units and is entitled to receive distributions when authorized by the general partner of the Operating Partnership out of assets legally available for the payment of distributions. The following table sets forth our Cumulative Redeemable Perpetual Preferred Units by series:

 

 

 

Per

 

 

 

 

 

Number of Units

 

 

Quarterly

 

 

 

Annum

 

 

Liquidation

 

 

Issued and Outstanding as of

 

 

Distributions

 

Preferred Units - Series

 

Rate

 

 

Preference

 

 

September 30, 2024

 

 

December 31, 2023

 

 

Per Unit

 

Series B Preferred Units

 

 

8.000

%

 

$

25.00

 

 

 

1,464,100

 

 

 

1,464,100

 

 

$

0.500000

 

Series C Preferred Units

 

 

7.875

%

 

$

25.00

 

 

 

1,346,110

 

 

 

1,346,110

 

 

$

0.492188

 

Series D Preferred Units

 

 

8.250

%

 

$

25.00

 

 

 

1,163,100

 

 

 

1,163,100

 

 

$

0.515625

 

 

The Operating Partnership pays cumulative cash distributions on the preferred units at rates in the above table per annum of the $25.00 liquidation preference per unit. The Company, which is the holder of the Operating Partnership’s preferred units, is entitled to receive distributions when authorized by the Operating Partnership’s general partner out of assets legally available for the payment of distributions. The preferred units are not redeemable by the holder, have no maturity date and are not convertible into any other security of the Operating Partnership or its affiliates. The Company, as general partner, may cause the Operating Partnership to redeem preferred units in the Operating Partnership in conjunction with a redemption by the Company of its preferred stock.

 

The total undeclared and unpaid cash dividends due on the Series B Preferred Units, Series C Preferred Units and Series D Preferred Units as of September 30, 2024, are $8,052,550, $7,287,931 and $6,596,958, respectively. Undeclared preferred cumulative dividends are reported on the statements of operations but are not considered payable until declared. The preferred partnership units are considered permanent equity and distributions accrete as distributions are declared. The preferred partnership units are considered permanent equity and distributions accrete as distributions are declared. As of September 30, 2024, the undeclared cumulative preferred dividends were approximately $21.9 million.

v3.24.3
Common Stock and Units
 9 Months Ended
Sep. 30, 2024
Equity [Abstract]  
Common Stock and Units

8. Common Stock and Units

Common Stock – As of September 30, 2024, the Company was authorized to issue up to 69,000,000 shares of common stock, $0.01 par value per share. Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders. Holders of the Company’s common stock are entitled to receive distributions when authorized by the Company’s board of directors out of assets legally available for the payment of distributions.

The following is a schedule of issuances, since January 1, 2023, of the Company’s common stock and related partnership units of the Operating Partnership:

 

On January 12, 2023, the Company was issued 15,000 units in the Operating Partnership and the Company issued 15,000 restricted shares of common stock to its independent directors and 64,278 vested shares of common stock to its independent directors and one officer.


On January 23, 2023, the Company was issued 205,000 units in the Operating Partnership and the Company issued 205,000 restricted shares of common stock to certain its officers and employees pursuant to their employment agreements.

 

On April 28, 2023, one holder of partnership units in the Operating Partnership converted 75,000 units for an equivalent number of shares in the Company's stock.

 

On August 18, 2023, one holder of partnership units in the Operating Partnership converted 252,903 units for an equivalent number of shares in the Company's stock.

 

On August 30, 2023, one holder of partnership units in the Operating Partnership converted 133,099 units for an equivalent number of shares in the Company's stock.

On January 18, 2024, the Company was issued 152,360 units in the Operating Partnership and the Company issued 12,750 restricted shares of common stock to its independent directors and 139,610 vested shares of common stock to its officers and employees.

As of September 30, 2024 and December 31, 2023, the Company had 19,849,165 and 19,696,805 shares of common stock outstanding, respectively.

Operating Partnership Units – Holders of Operating Partnership units, other than the Company as general partner, have certain redemption rights, which enable them to cause the Operating Partnership to redeem their units in exchange for shares of the Company’s common stock on a one-for-one basis or, at the option of the Company, cash per unit equal to the average of the market price of the Company’s common stock for the 10 trading days immediately preceding the notice date of such redemption. The number of shares issuable upon exercise of the redemption rights will be adjusted upon the occurrence of stock splits, mergers, consolidations or similar pro-rata share transactions, which otherwise would have the effect of diluting the ownership interests of the limited partners or the stockholders of the Company.

Since January 1, 2022, there have been no issuances or redemptions of partnership units in the Operating Partnership other than the issuances of partnership units in the Operating Partnership to the Company described above. In connection with the exchange agreements described in this section, an equivalent number of preferred units held by the Company were exchanged for partnership units in the Operating Partnership.

As of September 30, 2024 and December 31, 2023, the total number of Operating Partnership units outstanding was 20,213,351 and 20,060,991, respectively.

As of September 30, 2024 and December 31, 2023, the total number of outstanding Operating Partnership units not owned by the Company was 364,186 and 364,186, respectively, with a fair market value of approximately $0.4 million and $0.5 million, respectively, based on the price per share of the common stock on such respective dates.

As of September 30, 2024, there are unpaid common dividends and distributions to holders of record as of March 13, 2020, in the amount of $2,088,160.
v3.24.3
Related Party Transactions
 9 Months Ended
Sep. 30, 2024
Related Party Transactions [Abstract]  
Related Party Transactions

9. Related Party Transactions

Our Town Hospitality. Our Town is currently the management company for each of our ten wholly-owned hotels, as well as the manager of our rental programs at the Lyfe Resort & Residences and the Hyde Beach House Resort & Residences. As of September 30, 2024, an affiliate of Andrew M. Sims, our Chairman, an affiliate of David R. Folsom, our President and Chief Executive Officer, and Andrew M. Sims Jr., our Vice President - Operations & Investor Relations, beneficially owned approximately 66.4%, 6.6%, and 15.0%, respectively, of the total outstanding ownership interests of Our Town. Mr. Sims, Mr. Folsom, and Mr. Sims Jr. serve as directors of Our Town. The following is a summary of the transactions between Our Town and us:

Accounts Receivable – At September 30, 2024 and December 31, 2023, we were due approximately $0.0 million and $0.01 million, respectively, from Our Town.

Accounts Payable – At September 30, 2024 and December 31, 2023, we owed Our Town approximately $0.8 million and $0.3 million, respectively.

Management Agreements – On September 6, 2019, the Company entered into a master agreement with Our Town related to the management of certain of our hotels, as amended on December 13, 2019 (as amended, the “OTH Master Agreement”). On December 13, 2019, and subsequent dates we entered into a series of individual hotel management agreements for the management of our hotels. The hotel management agreements for each of our ten wholly-owned hotels and the two rental programs are referred to as, individually an “OTH Hotel Management Agreement” and, together, the “OTH Hotel Management Agreements”. The term of the OTH Hotel Management Agreements extends through March 31, 2035, and may be extended for two periods of five years each.

As of September 30, 2024, the OTH Master Agreement provided for an adjustment to the fees payable by us under the OTH Hotel Management Agreements in the event the net operating income of Our Town falls below $250,000 for any calendar year beginning on or after January 1, 2021. The OTH Master Agreement expires on March 31, 2035 but shall be extended beyond 2035 for such additional periods as an OTH Hotel Management Agreement remains in effect. The base management fees for each hotel under management with Our Town is 2.50%. For any new individual hotel management agreements, Our Town will receive a base management fee of 2.00% of gross revenues for the first full year from the commencement date through the anniversary date, 2.25% of gross revenues the second full year, and 2.50% of gross revenues for every year thereafter.

Base management fees earned by Our Town for our properties each totaled approximately $1.0 million, for the three months ended September 30, 2024 and 2023, respectively, and were approximately $3.5 million and $3.4 million for the nine months ended September 30, 2024 and 2023, respectively.

Each OTH Hotel Management Agreement sets an incentive management fee equal to 10.0% of the amount by which gross operating profit, as defined in the relevant management agreement, for a given year exceeds the budgeted gross operating profit for such year; provided, however, that the incentive management fee payable in respect of any such year shall not exceed 0.25% of the gross revenues of the hotel included in such calculation. Incentive management fees earned for the three months ended September 30, 2024 and 2023, were $(36,520) and $(31,088), respectively, and for the nine months ended September 30, 2024 and 2023, were approximately $75,145 and $186,855, respectively.

Each OTH Hotel Management Agreement provides for the payment of a termination fee upon the sale of the hotel equal to the lesser of the management fee paid with respect to the prior twelve months or the management fees paid for the number of months prior to the closing date of the hotel sale equal to the number of months remaining on the current term of the management agreement.

Sublease – On December 13, 2019, we entered into a sublease agreement with Our Town pursuant to which Our Town subleases 2,245 square feet of office space from Sotherly for a period of 5 years, with a 5-year renewal subject to approval by Sotherly, on terms and conditions similar to the terms of the prime lease entered into by Sotherly and the third-party owner of the property. In December 2023, the Company granted Our Town a lease concession in the amount of $143,774 in proportion to the rent concession the Company received under the primary lease. Sublease income from Our Town was $97,766 and $120,105 for the nine months ended September 30, 2024 and 2023, respectively.

Employee Medical Benefits – We purchase employee medical coverage for eligible employees that are employed by Our Town and who work exclusively for our properties and elect to participate in Our Town’s self-insured plan. Gross premiums for employee medical benefits paid by the Company (before offset of employee co-payments) were approximately $1.0 million and $0.9 million for the three months ended September 30, 2024 and 2023, respectively, and for the nine months ended September 30, 2024 and 2023, were approximately $2.9 million and $2.3 million, respectively.

Others. We employ Robert E. Kirkland IV, the son-in-law of our Chairman, as our General Counsel. We also employ Andrew M. Sims Jr., the son of our Chairman, as Vice President – Operations & Investor Relations. Total compensation for these two individuals, including salary and benefits, for the three months ended September 30, 2024 and 2023, were $145,744 and $134,289, respectively and for the nine months ended September 30, 2024 and 2023, were $493,374 and $470,494, respectively.

v3.24.3
Retirement Plans
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Retirement Plans . Retirement Plans

401(k) Plan - We maintain a 401(k) plan for qualified employees which is subject to “safe harbor” provisions. Those provisions include a matching employer contribution consisting of 100.0% of the first 3.0% of employee contributions and 50.0% of the next 2.0% of employee contributions. In addition, all employer matching funds vest immediately. Contributions to the plan totaled $17,040 and $16,048, for the three months ended September 30, 2024 and 2023, respectively and for the nine months ended September 30, 2024 and 2023, totaled $77,089 and $73,596, respectively.

Employee Stock Ownership Plan - The Company adopted an Employee Stock Ownership Plan in December 2016, effective January 1, 2016, which is a non-contributory defined contribution plan covering all employees of the Company. The Company sponsors and maintains the ESOP and related trust for the benefit of its eligible employees. The ESOP is a leveraged ESOP, meaning funds are loaned to the ESOP from the Company. The Company entered into a loan agreement with the ESOP on December 29, 2016, pursuant to which the ESOP may borrow up to $5.0 million to purchase shares of the Company’s common stock on the open market, which serve as collateral for the loan.

Between January 3, and February 28, 2017, the Company’s ESOP had purchased 682,500 shares of the Company’s common stock in the open market at a cost of approximately $4.9 million. Shares purchased by the ESOP are held in a suspense account for allocation among participants as contributions are made to the ESOP by the Company. The share allocations are accounted for at fair value at the date of allocation.

A total of 426,153 shares with a fair value of $515,644 remained allocated or committed to be released from the suspense account, as of September 30, 2024. We recognized as compensation cost $18,505 and $38,905 during the nine months ended September 30, 2024 and 2023, respectively. The remaining 233,059 unallocated shares have an approximate fair value of $282,001, as of September 30, 2024. As of September 30, 2024, the ESOP held a total of 412,169 allocated shares, 13,984 committed-to-be-released shares and 233,059 suspense shares. Dividends on allocated and unallocated shares are used to pay down the ESOP loan from the Operating Partnership.

The share allocations are accounted for at fair value on the date of allocation as follows:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

Number of Shares

 

 

Fair Value

 

 

Number of Shares

 

 

Fair Value

 

Allocated shares

 

 

412,169

 

 

$

498,724

 

 

 

412,169

 

 

$

614,131

 

Committed to be released shares

 

 

13,984

 

 

 

16,920

 

 

 

—

 

 

 

—

 

Total Allocated and Committed-to-be-Released

 

 

426,153

 

 

$

515,644

 

 

 

412,169

 

 

$

614,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated shares

 

 

233,059

 

 

 

282,001

 

 

 

247,043

 

 

 

368,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total ESOP Shares

 

 

659,212

 

 

$

797,645

 

 

 

659,212

 

 

$

982,225

 
v3.24.3
Indirect Hotel Operating Expenses
 9 Months Ended
Sep. 30, 2024
Other Income and Expenses [Abstract]  
Indirect Hotel Operating Expenses

11. Indirect Hotel Operating Expenses

Indirect hotel operating expenses consists of the following expenses incurred by the hotels:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Sales and marketing

 

 

$

3,790,404

 

 

$

3,815,349

 

 

$

12,167,336

 

 

$

12,323,121

 

General and administrative

 

 

 

3,829,348

 

 

 

3,638,354

 

 

 

11,388,967

 

 

 

11,010,177

 

Repairs and maintenance

 

 

 

2,241,323

 

 

 

2,164,003

 

 

 

6,760,153

 

 

 

6,486,094

 

Utilities

 

 

 

1,720,058

 

 

 

1,691,931

 

 

 

4,718,606

 

 

 

4,425,479

 

Property taxes

 

 

 

1,451,381

 

 

 

1,436,742

 

 

 

4,412,149

 

 

 

3,739,381

 

Management fees, including incentive

 

 

 

1,003,280

 

 

 

973,848

 

 

 

3,612,691

 

 

 

3,584,723

 

Franchise fees

 

 

 

989,802

 

 

 

972,610

 

 

 

3,301,739

 

 

 

3,290,490

 

Insurance

 

 

 

1,616,367

 

 

 

1,511,222

 

 

 

4,813,752

 

 

 

4,174,603

 

Information and telecommunications

 

 

 

1,016,135

 

 

 

931,573

 

 

 

2,969,245

 

 

 

2,799,923

 

Other

 

 

 

247,803

 

 

 

236,535

 

 

 

742,999

 

 

 

748,089

 

Total indirect hotel operating expenses

 

 

$

17,905,901

 

 

$

17,372,167

 

 

$

54,887,637

 

 

$

52,582,080

 
v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes

12. Income Taxes

The components of the income tax provision for the three and nine months ended September 30, 2024 and 2023 are as follows:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

State

 

 

 

66,711

 

 

 

(354,398

)

 

 

101,988

 

 

 

(322,679

)

 

 

 

66,711

 

 

 

(354,398

)

 

 

101,988

 

 

 

(322,679

)

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

 

(973,120

)

 

 

(1,153,452

)

 

 

(604,942

)

 

 

(1,055,628

)

State

 

 

 

(231,764

)

 

 

(261,180

)

 

 

(81,857

)

 

 

(115,711

)

Subtotals

 

 

 

(1,204,884

)

 

 

(1,414,632

)

 

 

(686,799

)

 

 

(1,171,339

)

Change in deferred tax valuation allowance

 

 

 

1,204,884

 

 

 

1,414,632

 

 

 

686,799

 

 

 

1,171,339

 

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income tax provision (benefit)

 

 

$

66,711

 

 

$

(354,398

)

 

$

101,988

 

 

$

(322,679

)

 

 

 

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Statutory federal income tax provision

 

 

$

(820,945

)

 

$

(508,247

)

 

$

503,878

 

 

$

893,903

 

Federal tax impact of REIT election

 

 

 

(103,084

)

 

 

(421,693

)

 

 

(633,377

)

 

 

(1,264,579

)

Federal impact of PPP loan forgiveness

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(56,470

)

State income tax benefit, net of federal provision (benefit)

 

 

 

(214,144

)

 

 

(839,090

)

 

 

(455,312

)

 

 

(1,066,872

)

Change in valuation allowance

 

 

 

1,204,884

 

 

 

1,414,632

 

 

 

686,799

 

 

 

1,171,339

 

Income tax provision (benefit)

 

 

$

66,711

 

 

$

(354,398

)

 

$

101,988

 

 

$

(322,679

)
v3.24.3
Loss Per Share and Per Unit
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Loss Per Share and Per Unit

13. Loss Per Share and Per Unit

Loss Per Share. The limited partners’ outstanding limited partnership units in the Operating Partnership (which may be redeemed for common stock upon notice from the limited partner and following our election to redeem the units for stock rather than cash) have been excluded from the diluted earnings per share calculation as there would be no effect on the amounts since the limited partners’ share of income or loss would also be added back to net income or loss. The shares of the Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are not convertible into or exchangeable for any other property or securities of the Company, except upon the occurrence of a change of control, and have been excluded from the diluted earnings per share calculation as there would be no impact on the current controlling stockholders. The non-committed, unearned ESOP shares are treated as reducing the number of issued and outstanding common shares and similarly reducing the weighted average number of common shares outstanding. The unallocated ESOP shares have been excluded in the weighted average for the basic and diluted earnings per share computation. The computation of basic and diluted net loss per share is presented below:

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(3,689,621

)

 

$

(2,065,826

)

 

$

2,297,431

 

 

$

4,579,359

 

 

Less: Net loss (income) allocated to participating share awards

 

41,358

 

 

 

28,008

 

 

 

(25,672

)

 

 

(58,032

)

 

Net income attributable to non-controlling interest

 

80,173

 

 

 

156,558

 

 

 

44,140

 

 

 

50,720

 

 

Undeclared distributions to preferred stockholders

 

(1,994,313

)

 

 

(1,994,313

)

 

 

(5,982,938

)

 

 

(5,982,938

)

 

Net loss attributable to common stockholders for EPS computation

$

(5,562,403

)

 

$

(3,875,573

)

 

$

(3,667,039

)

 

$

(1,410,891

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number common shares outstanding for basic EPS computation

 

19,434,233

 

 

 

18,906,851

 

 

 

19,408,524

 

 

 

18,742,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Undistributed loss

$

(0.29

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.08

)

 

Total basic and diluted

$

(0.29

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.08

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accounting for unvested share-based payment awards (share-based awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid), are participating securities and included in the computation of basic earnings per share. Our grants of restricted stock awards to our employees and directors are considered participating securities, and we have prepared our earnings per share calculations to include outstanding unvested restricted stock awards in the numerator for basic weighted average shares outstanding calculation. However, since the participating outstanding unvested restricted stock awards of 240,037 in the denominator are

anti-dilutive as of the three and nine months ended September 30, 2024 and 2023, due to net losses, they are not included in a dilutive calculation.

 

Loss Per Unit – The computation of basic and diluted net loss per unit is presented below:

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(3,689,621

)

 

$

(2,065,826

)

 

$

2,297,431

 

 

$

4,579,359

 

 

Less: Net loss (income) allocated to participating unit awards

 

41,358

 

 

 

28,008

 

 

 

(25,672

)

 

 

(58,032

)

 

Undeclared distributions to preferred unitholders

 

(1,994,313

)

 

 

(1,994,313

)

 

 

(5,982,938

)

 

 

(5,982,938

)

 

Net loss attributable to unitholders for EPU computation

$

(5,642,576

)

 

$

(4,032,131

)

 

$

(3,711,179

)

 

$

(1,461,611

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of units outstanding for basic EPU computation

 

20,004,351

 

 

 

19,810,991

 

 

 

19,994,898

 

 

 

19,807,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per unit:

 

 

 

 

 

 

 

 

 

 

 

 

Undistributed loss

$

(0.28

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.07

)

 

Total basic and diluted

$

(0.28

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accounting for unvested unit-based payment awards (unit-based awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid), are participating securities and included in the computation of basic earnings per unit. Our grants of restricted unit awards to our employees and directors are considered participating securities, and we have prepared our earnings per unit calculations to include outstanding unvested restricted unit awards in the numerator for basic weighted average shares outstanding calculation. However, since the participating outstanding unvested restricted unit awards of 240,037 in the denominator are anti-dilutive as of the three and nine months ended September 30, 2024 and 2023, due to net losses, they are not included in a dilutive calculation.
v3.24.3
Subsequent Events
 9 Months Ended
Sep. 30, 2024
Subsequent Events [Abstract]  
Subsequent Events

14. Subsequent Events

On October 28, 2024, we authorized payment of a quarterly distribution of $0.50 per share (and unit) of Series B Preferred Stock (and Series B Preferred Units) to holders of the Series B Preferred Stock (and Series B Preferred Units) of record as of November 29, 2024, to be paid on December 16, 2024.

 

On October 28, 2024, we authorized payment of a quarterly distribution of $0.4921875 per share (and unit) of Series C Preferred Stock (and Series C Preferred Units) to holders of the Series C Preferred Stock (and Series C Preferred Units) of record as of November 29, 2024, to be paid on December 16, 2024.

 

On October 28, 2024, we authorized payment of a quarterly distribution of $0.515625 per share (and unit) of Series D Preferred Stock (and Series D Preferred Units) to holders of the Series D Preferred Stock (and Series D Preferred Units) of record as of November 29, 2024, to be paid on December 16, 2024.
v3.24.3
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Basis of Presentation

Basis of Presentation – The consolidated financial statements of the Company presented herein include all of the accounts of Sotherly Hotels Inc., the Operating Partnership, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

The consolidated financial statements of the Operating Partnership presented herein include all of the accounts of Sotherly Hotels LP, MHI TRS and subsidiaries. All significant inter-company balances and transactions have been eliminated. Additionally, all administrative expenses of the Company and those expenditures made by the Company on behalf of the Operating Partnership are reflected as the administrative expenses, expenditures and obligations thereto of the Operating Partnership, pursuant to the terms of the Partnership Agreement.

The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) assuming the Company will continue as a going concern. The Company has mortgages maturing during 2025 with balances at maturity totaling approximately $87.5 million which it will be unable to repay out of working capital. As discussed in Note 4, Debt, the Company intends to repay the mortgage obligations when they become due through a combination of proceeds from a refinance of the properties and working capital. Further, as of September 30, 2024, we failed to maintain compliance with the financial covenants under the mortgage on the DoubleTree by Hilton Jacksonville Riverfront. Per the terms of the mortgage loan agreement, we are permitted either to reduce the outstanding balance with a prepayment estimated at no more than $1.2 million or provide an equivalent amount of cash collateral until we return to compliance. We anticipate the placement of cash collateral with the lender before the end of December 2024. We believe these plans will be effectively implemented.
Variable Interest Entities

Variable Interest Entities – The Operating Partnership is a variable interest entity. The Company’s only significant asset is its investment in the Operating Partnership, and consequently, substantially all of the Company’s assets and liabilities represent those assets and liabilities of the Operating Partnership and its subsidiaries. All of the Company’s debt is an obligation of the Operating Partnership and its subsidiaries.
Investment in Hotel Properties

Investment in Hotel Properties – Investments in hotel properties include investments in operating properties which are recorded at fair value on the acquisition date and allocated to land, property and equipment and identifiable intangible assets. If substantially all the fair value of the gross assets acquired are concentrated in a single identifiable asset, the asset is not considered a business. When we

conclude that an acquisition meets this threshold, acquisition costs will be capitalized as part of our allocation of the purchase price of the acquired asset. We capitalize the costs of significant additions and improvements that materially upgrade, increase the value of or extend the useful life of the property. These costs may include refurbishment, renovation, and remodeling expenditures, as well as certain direct internal costs related to construction projects. Upon the sale or retirement of a fixed asset, the cost and related accumulated depreciation are removed from our accounts and any resulting gain or loss is included in the statements of operations.

Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 7 to 39 years for buildings and building improvements and 3 to 10 years for furniture, fixtures and equipment.

The Company assesses the carrying value of its investments in hotel properties whenever events or changes in circumstances indicate that the carrying value of the hotel properties may not be recoverable. Events or circumstances that may cause a review include, but are not limited to, adverse permanent changes in the demand for lodging at the properties due to declining national or local economic conditions and/or new hotel construction in markets where the hotels are located. When such conditions exist, management performs an analysis to determine if the estimated undiscounted future cash flows from operations and the proceeds from the ultimate disposition of a hotel property exceeds its carrying value. If the estimated undiscounted future cash flows are found to be less than the carrying amount of the asset, an adjustment to reduce the carrying amount to the related hotel property’s estimated fair market value would be recorded and an impairment loss recognized.

The Company recognized no impairment losses for the nine months ended September 30, 2024 and 2023.
Cash and Cash Equivalents

Cash and Cash Equivalents – We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents.
Restricted Cash

Restricted Cash – Restricted cash includes real estate tax escrows, insurance escrows, mortgage servicing and reserves for replacements of furniture, fixtures and equipment pursuant to certain requirements in our various mortgage agreements.

 

 

 

 

As of

 

 

As of

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

Cash and cash equivalents

 

 

$

14,017,642

 

 

$

19,198,625

 

Restricted cash

 

 

 

18,488,112

 

 

 

10,205,947

 

Cash, cash equivalents and restricted cash at the end of the period

 

 

$

32,505,754

 

 

$

29,404,572

 
Concentration of Credit Risk

Concentration of Credit Risk – We hold cash accounts at several institutions in excess of the Federal Deposit Insurance Corporation (the “FDIC”) protection limits of $250,000. Our exposure to credit loss in the event of the failure of these institutions is represented by the FDIC protection limit and the total amounts on deposit. Management monitors, on a regular basis, the financial condition of the financial institutions along with the balances there on deposit to minimize our potential risk.
Accounts Receivable

Accounts Receivable – Accounts receivable consists primarily of amounts due from hotel guests including payments rendered by credit card for which we are awaiting payment from the merchant processor. Most of our revenue is collected through payment by cash or credit card on or in advance of the date of service, with limited extension of credit to a small number of customers. An allowance for potential credit losses is provided against the portion of accounts receivable that is estimated to be uncollectible.
Inventories

Inventories – Inventories, consisting primarily of food and beverages, are stated at the lower of cost or net realizable value, with cost determined on a method that approximates first-in, first-out basis.
Franchise License Fees

Franchise License Fees – Fees expended to obtain or renew a franchise license are amortized over the life of the license or renewal. The unamortized franchise fees as of September 30, 2024 and December 31, 2023 were $322,812 and $195,988, respectively. Amortization expense for the three months ended September 30, 2024 and 2023, each totaled $11,059, and for the nine months ended September 30, 2024 and 2023, totaled $33,176 and $33,991, respectively.
Deferred Financing Costs

Deferred Financing Costs – Deferred financing costs are recorded at cost and consist of loan fees and other costs incurred in issuing debt and are reflected in mortgage loans, net and unsecured notes, net on the consolidated balance sheets. Deferred offering costs are recorded at cost and consist of offering fees and other costs incurred in advance of issuing equity and are reflected in prepaid expenses, inventory and other assets on the consolidated balance sheets. Amortization of deferred financing costs is computed using a method that approximates the effective interest method over the term of the related debt and is included in interest expense in the consolidated statements of operations.

Derivative Instruments

Derivative Instruments – Our derivative instruments are reflected as assets or liabilities on the consolidated balance sheets and measured at fair value. Derivative instruments used to hedge the exposure to changes in the fair value of an asset, liability, or firm

commitment attributable to a particular risk, such as an interest rate risk, are considered fair value hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. For a derivative instrument designated as a cash flow hedge, the change in fair value each period is reported in accumulated other comprehensive income in stockholders’ equity and partners’ capital to the extent the hedge is effective. For a derivative instrument designated as a fair value hedge, the change in fair value each period is reported in earnings along with the change in fair value of the hedged item attributable to the risk being hedged. For a derivative instrument that does not qualify for hedge accounting or is not designated as a hedge, the change in fair value each period is reported in earnings.

We use derivative instruments to add stability to interest expense and to manage our exposure to interest-rate movements. To accomplish this objective, we currently use interest rate swaps which act as cash flow hedges and are not designated as hedges. We value our interest rate swaps at fair value, which we define as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We do not enter into contracts to purchase or sell derivative instruments for speculative trading purposes.
Fair Value Measurements

Fair Value Measurements –

We classify the inputs used to measure fair value into the following hierarchy:

 

Level 1

Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2

Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3

Unobservable inputs for the asset or liability.

 

We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table represents our assets and liabilities measured at fair value and the basis for that measurement (our interest rate swaps are the only assets or liabilities measured at fair value on a recurring basis; there were no non-recurring assets or liabilities for fair value measurements as of September 30, 2024 and December 31, 2023, respectively):

 

September 30, 2024

 

December 31, 2023

 

 

Carrying Amount

 

Fair Value

 

Carrying Amount

 

Fair Value

 

Financial Assets

 

 

 

 

 

 

 

 

Interest-rate swap(1)

$

—

 

$

—

 

$

627,676

 

$

627,676

 

 

 

 

 

 

 

 

 

 

Interest-rate cap(2)

$

312,468

 

$

312,468

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

 

 

 

Mortgage loans

$

(318,061,006

)

$

(310,847,559

)

$

(315,989,194

)

$

(303,949,790

)

(1)
The interest-rate swap agreement allowed the Company to receive a variable rate of interest based upon 1-month SOFR in exchange for a fixed rate of 2.826% on a notional amount which approximated the declining balance of the mortgage loan on the Hotel Alba. The interest-rate swap was terminated on February 14, 2024.
(2)
The interest-rate cap agreement allows the Company to receive a variable rate of interest based upon the amount in which 1-month SOFR exceeds 3.0% on a notional amount of $26.0 million on the DoubleTree by Hilton Philadelphia Airport. The interest rate cap terminates on May 1, 2026.

 

 

The fair value of the Company’s interest rate swap and cap agreements were determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts, which is considered a Level 2 measurement under the fair value hierarchy. The variable cash receipts are based on an expectation of future interest rates (forward yield curves) derived from observable market interest rates.

 

The Company estimates the fair value of its mortgage loans by discounting the future cash flows of each loan at estimated market rates consistent with the maturity of a mortgage loan with similar credit terms and credit characteristics, which are Level 2 inputs under the fair value hierarchy. Market rates take into consideration general market conditions and maturity.
Noncontrolling Interest in Operating Partnership

Noncontrolling Interest in Operating Partnership – Certain hotel properties were acquired, in part, by the Operating Partnership through the issuance of limited partnership units of the Operating Partnership. The noncontrolling interest in the Operating Partnership is: (i) increased or decreased by the limited partners’ pro-rata share of the Operating Partnership’s net income or net loss, respectively; (ii) decreased by distributions; (iii) decreased by redemption of partnership units for the Company’s common stock; and (iv) adjusted to equal the net equity of the Operating Partnership multiplied by the limited partners’ ownership percentage immediately after each issuance of units of the Operating Partnership and/or the Company’s common stock through an adjustment to additional paid-in capital. Net income or net loss is allocated to the noncontrolling interest in the Operating Partnership based on the weighted average percentage ownership throughout the period.
Revenue Recognition

Revenue Recognition – Revenue consists of amounts derived from hotel operations, including the rental of rooms, sales of food and beverage, and other ancillary services. Room revenue is recognized over a customer’s hotel stay. Revenue from food and beverage and other ancillary services is generated when a customer chooses to purchase goods or services separately from a hotel room and revenue is recognized on these distinct goods and services at the point in time or over the time period that goods or services are provided to the customer. Some contracts for rooms or food and beverage services require an upfront deposit which is recorded as advanced deposits (or contract liabilities) shown on our consolidated balance sheets and recognized once the performance obligations are satisfied.

Certain ancillary services are provided by third parties and the Company assesses whether it is the principal or agent in these arrangements. If the Company is the agent, revenue is recognized based upon the gross commission earned from the third party. If the Company is the principal, the Company recognizes revenue based upon the gross sales price. With respect to the hotel condominium rental programs that the Company operates at the Lyfe Resort & Residences (f/k/a Hyde Resort & Residences) and Hyde Beach House Resort & Residences, the Company has determined that it is an agent and recognizes revenue based on its share of revenue earned under the rental agency agreement.

The Company collects sales, use, occupancy and similar taxes at its hotels which are presented on a net basis on the consolidated statements of operations.
Leases

Leases – We determine whether an arrangement is a lease at its inception and determine their classification as operating or finance leases. These leases are classified on the consolidated balance sheets as “right of use assets”, which represent our right to use the underlying asset. The corresponding operating lease liability, which represent our obligation to make lease payments under the lease agreement, is classified as finance lease liabilities or within accounts payable and other accrued liabilities for operating leases on the consolidated balance sheets. Right of use assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the right of use assets and lease liabilities are recognized in the period in which the obligation for those payments is incurred. As many of our leases do not provide an implicit financing rate, we use our incremental borrowing cost based on information available at the commencement date using our actual borrowing rates commensurate with the lease terms and fully levered borrowing to determine present value, when the implicit rate is not determinable. Extension options on our leases are included in our minimum lease terms when they are reasonably certain to be exercised. Subsequent to the initial recognition, lease liabilities are measured using the effective interest method. The right-of-use ("ROU") asset is generally amortized utilizing a straight-line method adjusted for the lease liability accretion during the period.
Income Taxes

Income Taxes – The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. As a REIT, the Company generally will not be subject to federal income tax. MHI TRS, our wholly owned taxable REIT subsidiary which leases our hotels from subsidiaries of the Operating Partnership, is subject to federal and state income taxes.

We account for income taxes using the asset and liability method under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is required for deferred tax assets if, based on all available evidence, it is “more-likely-than-not” that all or a portion of the deferred tax asset will or will not be realized due to the inability to generate sufficient taxable income in certain financial statement periods. The “more-likely-than-not” analysis means the likelihood of realization is greater than 50%, that we either will or will not be able to fully utilize the deferred tax assets against future taxable income. The net amount of deferred tax assets that are recorded on the financial statements must reflect the tax benefits that are expected to be realized using these criteria. As of September 30, 2024, we have determined that it is more-likely-than-not that we will not be able to fully utilize our deferred tax assets for future tax consequences, therefore a 100% valuation allowance is required. As of September 30, 2024 and December 31, 2023, deferred tax assets each totaled $0.

As of September 30, 2024 and December 31, 2023, we had no uncertain tax positions. Our policy is to recognize interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2024, the tax years that remain subject to examination by the major tax jurisdictions to which the Company is subject generally include 2011 through 2023. In addition, as of September 30, 2024, the tax years that remain subject to examination by the major tax jurisdictions to which MHI TRS is subject, because of open NOL carryforwards, generally include 2009 through 2023.

The Operating Partnership is generally not subject to federal and state income taxes as the unit holders of the Partnership are subject to tax on their respective shares of the Partnership’s taxable income.
Stock-Based Compensation

Stock-based Compensation – The Company’s 2022 Long-Term Incentive Plan (the “2022 Plan”), which the Company’s stockholders approved in April 2022, permits the grant of stock options, restricted stock, unrestricted stock and service/performance share compensation awards to its employees and directors for up to 2,000,000 shares of common stock. The Company believes that such awards better align the interests of its employees with those of its stockholders.

Under the 2022 Plan, the Company may issue a variety of service or performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of September 30, 2024, the Company has made cumulative awards totaling 604,028 shares to certain executives and its independent directors, of which 232,750 were originally restricted. As of September 30, 2024, 135,000 shares remain restricted and will fully vest in March 2027. Total compensation cost recognized under the 2022 Plan for each of the three months ended September 30, 2024 and 2023 was each $18,888, and for the nine months ended September 30, 2024 and 2023 was $264,087 and $263,161, respectively.

The Company’s 2013 Long-Term Incentive Plan (the “2013 Plan”), which the Company’s stockholders approved in April 2013, permits the grant of stock options, restricted stock, unrestricted stock and service or performance share compensation awards to its employees and directors for up to 750,000 shares of common stock. All future awards will be made under the 2022 Plan.

As of September 30, 2024, under the 2013 Plan, the Company has made cumulative service-based stock awards totaling 745,160 shares, of which 316,333 were originally restricted. All awards have vested except for 45,000 shares issued to certain employees, which will vest on December 31, 2024. The remaining 4,840 shares have been deregistered.

Under the 2013 Plan, the Company was able to issue a variety of performance-based stock awards, including nonqualified stock options. The value of the awards is charged to compensation expense on a straight-line basis over the vesting or service period based on the value of the award as determined by the Company’s stock price on the date of grant or issuance. As of September 30, 2024, no performance-based stock awards have been granted. Total compensation cost recognized under the 2013 Plan for each of the three months ended September 30, 2024 and 2023 was $22,883, and for each of the nine months ended September 30, 2024 and 2023, was $68,648.

Additionally, the Company sponsors and maintains an Employee Stock Ownership Plan (“ESOP”) and related trust for the benefit of its eligible employees. We reflect unearned ESOP shares as a reduction of stockholders’ equity. Dividends on unearned ESOP shares, when paid, are considered a compensation expense. The Company recognizes compensation expense equal to the fair value of the Company’s ESOP shares during the periods in which they are committed to be released. For the three months ended September 30, 2024 and 2023, the ESOP compensation cost was $5,687 and $13,992, respectively, and for the nine months ended September 30, 2024 and 2023, the ESOP compensation cost was $18,505 and $38,905, respectively. To the extent that the fair value of the Company’s ESOP shares differs from the cost of such shares, the differential is recognized as additional paid in capital. Because the ESOP is internally leveraged through a loan from the Company to the ESOP, the loan receivable by the Company from the ESOP is not reported as an asset nor is the debt of the ESOP shown as a liability in the consolidated financial statements.
Advertising

Advertising – Advertising costs, including internet advertising, were $701,142 and $644,111 for the three months ended September 30, 2024 and 2023, respectively, and were $2,116,737 and $2,039,089 for the nine months ended September 30, 2024 and 2023, respectively. Advertising costs are expensed as incurred.
Involuntary Conversion of Assets

Involuntary Conversion of Assets – We record gains or losses on involuntary conversions of assets due to recovered insurance proceeds to the extent the undepreciated cost of a nonmonetary asset differs from the amount of monetary proceeds received. The gain on involuntary conversion of assets is reflected in the consolidated statements of operations.
Comprehensive Income

Comprehensive Income – Comprehensive income as defined, includes all changes in equity during a period from non-owner sources. We do not have any items of comprehensive income other than net income.
Segment Information

Segment Information – We have determined that our business is conducted in one reportable segment: hotel ownership.
Use of Estimates Use of Estimates – The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
New Accounting Pronouncements

New Accounting Pronouncements –

In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative ("ASU 2023-06"). ASU 2023-06 incorporates 14 of the 27 disclosure requirements published in SEC Release No. 33-10532 - Disclosure Update and Simplification into various topics within the Accounting Standards Codification ("ASC"). ASU 2023-06's amendments represent clarifications to, or technical corrections of, current requirements. For SEC registrants, the effective date for each amendment will vary based on the date on which the SEC removes that related disclosure from its rules. If the SEC does not act to remove its related requirement by June 30, 2027, any related FASB amendments will be removed from the ASC and will not be effective. Early adoption is prohibited. The Company is currently assessing the potential impacts of ASU 2023-06 and does not expect it to have a material effect on its consolidated financial statements and disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently assessing the impacts of adopting ASU 2023-07 on its consolidated financial statements and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"). ASU 2023-09 requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied on a prospective basis, with the option to apply retrospectively. The Company is currently assessing the impacts of adopting ASU 2023-09 on its consolidated financial statements and disclosures.

In March 2024, the FASB issued ASU 2024-01, Compensation—Stock Compensation (Topic 718): Scope Application of Profits Interest and Similar Awards (“ASU 2024-01”), to clarify the scope application of profits interest and similar awards by adding illustrative guidance in ASC 718, Compensation—Stock Compensation ("ASC 718"). ASU 2024-01 clarifies how to determine whether profits interest and similar awards should be accounted for as a share-based payment arrangement (ASC 718) or as a cash bonus or profit-sharing arrangement (ASC 710, Compensation—General, or other guidance) and applies to all reporting entities that account for profits interest awards as compensation to employees or non-employees. In addition to adding the illustrative guidance, ASU 2024-01 modified the language in paragraph 718-10-15-3 to improve its clarity and operability without changing the guidance. ASU 2024-01 is effective for fiscal years beginning after December 15, 2024, including interim periods within those annual periods. Early adoption is permitted. The amendments should be applied either retrospectively to all prior periods presented in the financial statements, or prospectively to profits interests and similar awards granted or modified on or after the adoption date. The Company is currently assessing the impacts of adopting ASU 2024-01 on its consolidated financial statements and disclosures.

In November 2024, the FASB issued 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The amendments improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales and research and development). The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact that adopting ASU 2024-03 will have on its consolidated financial statements and disclosures.

v3.24.3
Summary of Significant Accounting Policies (Tables)
 9 Months Ended
Sep. 30, 2024
Accounting Policies [Abstract]  
Schedule of Cash, Cash Equivalents and Restricted Cash

 

 

 

As of

 

 

As of

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

Cash and cash equivalents

 

 

$

14,017,642

 

 

$

19,198,625

 

Restricted cash

 

 

 

18,488,112

 

 

 

10,205,947

 

Cash, cash equivalents and restricted cash at the end of the period

 

 

$

32,505,754

 

 

$

29,404,572

 
Schedule of Recurring Assets and Liabilities Measured at Fair Value The following table represents our assets and liabilities measured at fair value and the basis for that measurement (our interest rate swaps are the only assets or liabilities measured at fair value on a recurring basis; there were no non-recurring assets or liabilities for fair value measurements as of September 30, 2024 and December 31, 2023, respectively):

 

September 30, 2024

 

December 31, 2023

 

 

Carrying Amount

 

Fair Value

 

Carrying Amount

 

Fair Value

 

Financial Assets

 

 

 

 

 

 

 

 

Interest-rate swap(1)

$

—

 

$

—

 

$

627,676

 

$

627,676

 

 

 

 

 

 

 

 

 

 

Interest-rate cap(2)

$

312,468

 

$

312,468

 

$

—

 

$

—

 

 

 

 

 

 

 

 

 

 

Financial Liabilities

 

 

 

 

 

 

 

 

Mortgage loans

$

(318,061,006

)

$

(310,847,559

)

$

(315,989,194

)

$

(303,949,790

)

(1)
The interest-rate swap agreement allowed the Company to receive a variable rate of interest based upon 1-month SOFR in exchange for a fixed rate of 2.826% on a notional amount which approximated the declining balance of the mortgage loan on the Hotel Alba. The interest-rate swap was terminated on February 14, 2024.
(2)
The interest-rate cap agreement allows the Company to receive a variable rate of interest based upon the amount in which 1-month SOFR exceeds 3.0% on a notional amount of $26.0 million on the DoubleTree by Hilton Philadelphia Airport. The interest rate cap terminates on May 1, 2026.
v3.24.3
Investment in Hotel Properties, Net (Tables)
 9 Months Ended
Sep. 30, 2024
Real Estate [Abstract]  
Schedule of Investment in Hotel Properties, Net

Investment in hotel properties, net as of September 30, 2024 and December 31, 2023 consisted of the following:

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

 

 

 

 

 

Land and land improvements

 

$

61,349,993

 

 

$

61,114,486

 

Buildings and improvements

 

 

429,293,211

 

 

 

418,833,706

 

Right of use assets

 

 

4,054,169

 

 

 

4,733,406

 

Finance lease right of use assets

 

 

22,921,630

 

 

 

—

 

Furniture, fixtures and equipment

 

 

50,034,059

 

 

 

51,501,629

 

 

 

 

567,653,062

 

 

 

536,183,227

 

Less: accumulated depreciation

 

 

(194,700,149

)

 

 

(181,264,121

)

Investment in Hotel Properties, Net

 

$

372,952,913

 

 

$

354,919,106

 
v3.24.3
Debt (Tables)
 9 Months Ended
Sep. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Mortgage Debt Obligations on Hotels The following table sets forth our mortgage debt obligations on our hotels.

 

 

Balance Outstanding as of

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

December 31,

 

 

Prepayment

 

Maturity

 

Amortization

 

Interest

 

Property

2024

 

 

2023

 

 

Penalties

 

Date

 

Provisions

 

Rate

 

The DeSoto (1)

$

29,493,868

 

 

$

30,248,929

 

 

Yes

 

7/1/2026

 

25 years

 

4.25%

 

The DeSoto (2)

 

5,000,000

 

 

 

-

 

 

Yes

 

7/1/2026

 

25 years

 

7.50%

 

DoubleTree by Hilton Jacksonville
   Riverfront (3)

 

26,172,600

 

 

 

31,749,695

 

 

None

 

7/8/2029

 

25 years

 

SOFR plus 3.00%

 

DoubleTree by Hilton Laurel (4)

 

10,000,000

 

 

 

10,000,000

 

 

(4)

 

5/6/2028

 

(4)

 

7.35%

 

DoubleTree by Hilton Philadelphia Airport (5)

 

35,915,488

 

 

 

38,915,488

 

 

None

 

4/29/2026

 

(5)

 

SOFR plus 3.50%

 

DoubleTree Resort by Hilton Hollywood
   Beach (6)

 

50,646,678

 

 

 

51,495,662

 

 

(6)

 

10/1/2025

 

30 years

 

4.913%

 

Georgian Terrace (7)

 

38,740,475

 

 

 

39,455,095

 

 

(7)

 

6/1/2025

 

30 years

 

4.42%

 

Hotel Alba Tampa, Tapestry Collection by Hilton (8)

 

35,000,000

 

 

 

24,269,200

 

 

(8)

 

3/6/2029

 

(8)

 

8.49%

 

Hotel Ballast Wilmington, Tapestry Collection by
   Hilton (9)

 

30,020,310

 

 

 

30,755,374

 

 

Yes

 

1/1/2027

 

25 years

 

4.25%

 

Hyatt Centric Arlington (10)

 

45,607,309

 

 

 

46,454,972

 

 

Yes

 

10/1/2028

 

30 years

 

5.25%

 

The Whitehall (11)

$

13,844,927

 

 

 

14,009,874

 

 

None

 

2/26/2028

 

25 years

 

PRIME plus 1.25%

 

Total Mortgage Principal Balance

$

320,441,655

 

 

$

317,354,289

 

 

 

 

 

 

 

 

 

 

Deferred financing costs, net

$

(2,405,023

)

 

 

(1,407,979

)

 

 

 

 

 

 

 

 

 

Unamortized premium on loan

$

24,374

 

 

 

42,884

 

 

 

 

 

 

 

 

 

 

Total Mortgage Loans, Net

$

318,061,006

 

 

$

315,989,194

 

 

 

 

 

 

 

 

 

 

(1)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date.

(2)

The note is a second mortgage that amortizes on a 25-year schedule. The note can be prepaid with penalty.

(3)

The note provides for an initial tranche in the amount of $26.25 million and a renovation tranche in the amount of $9.49 million.

(4)

The note requires payments of interest only and cannot be prepaid until the last 4 months of the loan term.

(5)

The note requires payments of interest only. On May 3, 2024, we entered into an interest rate cap with a notional amount of $26.0 million with Webster Bank, N.A. The cap has a strike rate of 3.0%, is indexed to SOFR, and expires on May 1, 2026.

(6)

With limited exception, the note may not be prepaid prior to June 2025.

(7)

With limited exception, the note may not be prepaid prior to February 2025.

(8)

The note requires payments of interest only and cannot be prepaid until the last four months of the term.

(9)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and is subject to a pre-payment penalty except for any pre-payments made within 120 days of the maturity date.

(10)

Following a 5-year lockout, the note can be prepaid with penalty in years 6-10 and without penalty during the final 4 months of the term.

(11)

The note bears a floating interest rate of New York Prime Rate plus 1.25%, with a floor of 7.50%.
Schedule of Future Mortgage Debt Maturities

Total future mortgage debt maturities for the remaining three and twelve-month periods, without respect to any extension of loan maturity or loan modification after September 30, 2024, were as follows:

 

For the remaining three months ended December 31, 2024

$

1,610,426

 

December 31, 2025

 

92,910,409

 

December 31, 2026

 

99,968,858

 

December 31, 2027

 

2,221,620

 

December 31, 2028

 

64,531,442

 

December 31, 2029

 

59,198,900

 

Total future maturities

$

320,441,655

 
v3.24.3
Commitments and Contingencies (Tables)
 9 Months Ended
Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Minimum Future Lease Payments

A schedule of minimum future lease payments receivable for the remaining three and twelve-month periods is as follows:

 

For the three months ending December 31, 2024

 

$

252,543

 

December 31, 2025

 

 

997,194

 

December 31, 2026

 

 

936,515

 

December 31, 2027

 

 

931,178

 

December 31, 2028

 

 

947,413

 

December 31, 2029

 

 

996,352

 

December 31, 2030 and thereafter

 

 

9,424,176

 

Total

 

$

14,485,371

 
v3.24.3
Leases (Tables)
 9 Months Ended
Sep. 30, 2024
Leases [Abstract]  
Schedule of Operating and Finance Lease Term Years, Weighted-average Discount Rates, Right of Use Assets and Lease Liabilities

As of September 30, 2024, the operating and finance lease term years, weighted-average discount rates, right of use assets and lease liabilities, are as follows:

 

 

 

September 30, 2024

 

 

 

 

Operating

 

Finance

 

Weighted-average remaining lease term, including reasonably certain extension options (years)

 

 

 

27.78

 

 

50.32

 

Weighted-average discount rate

 

 

 

8.02

%

 

7.37

%

 

 

 

 

 

 

 

Right of use assets

 

 

$

4,803,689

 

$

22,958,869

 

Lease liabilities

 

 

$

(4,803,689

)

$

(22,742,195

)
Summary of Lease Related Assets and Liabilities

Lease Position as of September 30, 2024 and December 31, 2023 – The following tables set forth the lease-related assets and liabilities included in the Company’s consolidated balance sheets as of September 30, 2024 and December 31, 2023; as well as :

 

Assets

Balance Sheet Classification

September 30, 2024

 

December 31, 2023

 

 

 

 

 

 

 

Right of use assets

Prepaid expenses, inventory and other assets

$

749,520

 

$

822,203

 

Right of use assets

Investment in hotel properties, net

 

4,054,169

 

 

4,796,830

 

Finance lease right of use assets

Investment in hotel properties, net

 

22,958,869

 

 

-

 

 

 

 

 

 

 

Total lease assets

 

$

27,762,558

 

$

5,619,033

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Lease obligations under ROU assets

Accounts payable and accrued liabilities

 

4,803,689

 

 

5,041,019

 

Finance lease liabilities

Finance lease liabilities

 

22,742,195

 

 

-

 

Total lease liabilities

 

$

27,545,884

 

$

5,041,019

 

 

 

 

 

 

 

 
Schedule of Lease Costs The following table sets forth the lease costs related to the Company’s operating and finance ground leases included in the Company’s consolidated statement of operations for the nine months ended September 30, 2024:

 

Consolidated Statement of Operations

Three Months Ended

 

Three Months Ended

 

Nine Months Ended

 

Nine Months Ended

 

 

Classification

September 30, 2024

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

 

 

 

 

 

 

 

 

 

 

 

Operating lease costs

 

 

 

 

 

 

 

 

 

Fixed

Corporate general and administrative

$

39,706

 

$

59,045

 

$

119,119

 

$

177,134

 

 

Hotel operating expenses - Other operating

 

68,126

 

 

67,750

 

 

204,379

 

 

203,250

 

 

Hotel operating expenses - Indirect

 

37,803

 

 

69,943

 

 

126,467

 

 

134,829

 

Variable

Hotel operating expenses - Indirect

 

158,301

 

 

152,074

 

 

416,849

 

 

456,224

 

 

 

 

 

 

 

 

 

 

 

Finance lease costs:

 

 

 

 

 

 

 

 

 

Amortization of lease assets

Depreciation and amortization

 

49,750

 

 

-

 

 

67,696

 

 

-

 

Variable

Hotel operating expenses - Indirect

 

58,054

 

 

-

 

 

58,054

 

 

-

 

Interest on lease liabilities

Interest expense

 

143,269

 

 

-

 

 

151,512

 

 

-

 

Total lease costs

 

$

555,009

 

$

348,812

 

$

1,144,076

 

$

971,437

 

 

 
Schedule of Undiscounted Cash Flows The following table reconciles the undiscounted cash flows for each of the next five years and total of the remaining years to the operating lease liabilities and finance lease liabilities included in the Company’s consolidated balance sheet as of September 30, 2024:

 

 

 

September 30, 2024

 

 

 

Operating

 

Financing

 

 

 

 

 

 

 

For the three months ending December 31, 2024

 

$

137,961

 

$

27,555

 

December 31, 2025

 

 

553,775

 

 

981,219

 

December 31, 2026

 

 

552,233

 

 

1,845,156

 

December 31, 2027

 

 

551,196

 

 

1,842,802

 

December 31, 2028

 

 

524,984

 

 

1,827,859

 

December 31, 2029

 

 

528,701

 

 

1,812,544

 

December 31, 2030 and thereafter

 

 

10,240,006

 

 

81,535,998

 

Total undiscounted lease payments

 

 

13,088,856

 

 

89,873,133

 

Less imputed interest

 

 

(8,285,167

)

 

(67,130,938

)

Total lease liability

 

$

4,803,689

 

$

22,742,195

 
Schedule of Minimum Future Lease Payments

A schedule of minimum future lease payments receivable for the remaining three and twelve-month periods is as follows:

 

For the three months ending December 31, 2024

 

$

252,543

 

December 31, 2025

 

 

997,194

 

December 31, 2026

 

 

936,515

 

December 31, 2027

 

 

931,178

 

December 31, 2028

 

 

947,413

 

December 31, 2029

 

 

996,352

 

December 31, 2030 and thereafter

 

 

9,424,176

 

Total

 

$

14,485,371

 
v3.24.3
Preferred Stock and Units (Tables)
 9 Months Ended
Sep. 30, 2024
Preferred Stock And Units [Abstract]  
Schedule of Series of Cumulative Redeemable Perpetual Preferred Stock The following table sets forth our Cumulative Redeemable Perpetual Preferred Stock by series:

 

 

 

Per

 

 

 

 

 

Number of Shares

 

 

Quarterly

 

 

 

Annum

 

 

Liquidation

 

 

Issued and Outstanding as of

 

 

Distributions

 

Preferred Stock - Series

 

Rate

 

 

Preference

 

 

September 30, 2024

 

 

December 31, 2023

 

 

Per Share

 

Series B Preferred Stock

 

 

8.000

%

 

$

25.00

 

 

 

1,464,100

 

 

 

1,464,100

 

 

$

0.500000

 

Series C Preferred Stock

 

 

7.875

%

 

$

25.00

 

 

 

1,346,110

 

 

 

1,346,110

 

 

$

0.492188

 

Series D Preferred Stock

 

 

8.250

%

 

$

25.00

 

 

 

1,163,100

 

 

 

1,163,100

 

 

$

0.515625

 

Schedule of Series of Cumulative Redeemable Perpetual Preferred Units The following table sets forth our Cumulative Redeemable Perpetual Preferred Units by series:

 

 

 

Per

 

 

 

 

 

Number of Units

 

 

Quarterly

 

 

 

Annum

 

 

Liquidation

 

 

Issued and Outstanding as of

 

 

Distributions

 

Preferred Units - Series

 

Rate

 

 

Preference

 

 

September 30, 2024

 

 

December 31, 2023

 

 

Per Unit

 

Series B Preferred Units

 

 

8.000

%

 

$

25.00

 

 

 

1,464,100

 

 

 

1,464,100

 

 

$

0.500000

 

Series C Preferred Units

 

 

7.875

%

 

$

25.00

 

 

 

1,346,110

 

 

 

1,346,110

 

 

$

0.492188

 

Series D Preferred Units

 

 

8.250

%

 

$

25.00

 

 

 

1,163,100

 

 

 

1,163,100

 

 

$

0.515625

 

v3.24.3
Retirement Plans (Tables)
 9 Months Ended
Sep. 30, 2024
Retirement Benefits [Abstract]  
Summary of Shares Allocations are Accounted For Fair Value on The Date of Allocations

The share allocations are accounted for at fair value on the date of allocation as follows:

 

 

 

September 30, 2024

 

 

December 31, 2023

 

 

 

Number of Shares

 

 

Fair Value

 

 

Number of Shares

 

 

Fair Value

 

Allocated shares

 

 

412,169

 

 

$

498,724

 

 

 

412,169

 

 

$

614,131

 

Committed to be released shares

 

 

13,984

 

 

 

16,920

 

 

 

—

 

 

 

—

 

Total Allocated and Committed-to-be-Released

 

 

426,153

 

 

$

515,644

 

 

 

412,169

 

 

$

614,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated shares

 

 

233,059

 

 

 

282,001

 

 

 

247,043

 

 

 

368,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total ESOP Shares

 

 

659,212

 

 

$

797,645

 

 

 

659,212

 

 

$

982,225

 
v3.24.3
Indirect Hotel Operating Expenses (Tables)
 9 Months Ended
Sep. 30, 2024
Other Income and Expenses [Abstract]  
Summary of Indirect Hotel Operating Expenses

Indirect hotel operating expenses consists of the following expenses incurred by the hotels:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Sales and marketing

 

 

$

3,790,404

 

 

$

3,815,349

 

 

$

12,167,336

 

 

$

12,323,121

 

General and administrative

 

 

 

3,829,348

 

 

 

3,638,354

 

 

 

11,388,967

 

 

 

11,010,177

 

Repairs and maintenance

 

 

 

2,241,323

 

 

 

2,164,003

 

 

 

6,760,153

 

 

 

6,486,094

 

Utilities

 

 

 

1,720,058

 

 

 

1,691,931

 

 

 

4,718,606

 

 

 

4,425,479

 

Property taxes

 

 

 

1,451,381

 

 

 

1,436,742

 

 

 

4,412,149

 

 

 

3,739,381

 

Management fees, including incentive

 

 

 

1,003,280

 

 

 

973,848

 

 

 

3,612,691

 

 

 

3,584,723

 

Franchise fees

 

 

 

989,802

 

 

 

972,610

 

 

 

3,301,739

 

 

 

3,290,490

 

Insurance

 

 

 

1,616,367

 

 

 

1,511,222

 

 

 

4,813,752

 

 

 

4,174,603

 

Information and telecommunications

 

 

 

1,016,135

 

 

 

931,573

 

 

 

2,969,245

 

 

 

2,799,923

 

Other

 

 

 

247,803

 

 

 

236,535

 

 

 

742,999

 

 

 

748,089

 

Total indirect hotel operating expenses

 

 

$

17,905,901

 

 

$

17,372,167

 

 

$

54,887,637

 

 

$

52,582,080

 
v3.24.3
Income Taxes (Tables)
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Components of Income Tax Provision

The components of the income tax provision for the three and nine months ended September 30, 2024 and 2023 are as follows:

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

State

 

 

 

66,711

 

 

 

(354,398

)

 

 

101,988

 

 

 

(322,679

)

 

 

 

66,711

 

 

 

(354,398

)

 

 

101,988

 

 

 

(322,679

)

Deferred:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

 

(973,120

)

 

 

(1,153,452

)

 

 

(604,942

)

 

 

(1,055,628

)

State

 

 

 

(231,764

)

 

 

(261,180

)

 

 

(81,857

)

 

 

(115,711

)

Subtotals

 

 

 

(1,204,884

)

 

 

(1,414,632

)

 

 

(686,799

)

 

 

(1,171,339

)

Change in deferred tax valuation allowance

 

 

 

1,204,884

 

 

 

1,414,632

 

 

 

686,799

 

 

 

1,171,339

 

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income tax provision (benefit)

 

 

$

66,711

 

 

$

(354,398

)

 

$

101,988

 

 

$

(322,679

)
Reconciliation of Statutory Federal Income Tax Provision (Benefit)

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Statutory federal income tax provision

 

 

$

(820,945

)

 

$

(508,247

)

 

$

503,878

 

 

$

893,903

 

Federal tax impact of REIT election

 

 

 

(103,084

)

 

 

(421,693

)

 

 

(633,377

)

 

 

(1,264,579

)

Federal impact of PPP loan forgiveness

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(56,470

)

State income tax benefit, net of federal provision (benefit)

 

 

 

(214,144

)

 

 

(839,090

)

 

 

(455,312

)

 

 

(1,066,872

)

Change in valuation allowance

 

 

 

1,204,884

 

 

 

1,414,632

 

 

 

686,799

 

 

 

1,171,339

 

Income tax provision (benefit)

 

 

$

66,711

 

 

$

(354,398

)

 

$

101,988

 

 

$

(322,679

)
v3.24.3
Loss Per Share and Per Unit (Tables)
 9 Months Ended
Sep. 30, 2024
Earnings Per Share [Abstract]  
Computation of Basic and Diluted Net Loss Per Share The computation of basic and diluted net loss per share is presented below:

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(3,689,621

)

 

$

(2,065,826

)

 

$

2,297,431

 

 

$

4,579,359

 

 

Less: Net loss (income) allocated to participating share awards

 

41,358

 

 

 

28,008

 

 

 

(25,672

)

 

 

(58,032

)

 

Net income attributable to non-controlling interest

 

80,173

 

 

 

156,558

 

 

 

44,140

 

 

 

50,720

 

 

Undeclared distributions to preferred stockholders

 

(1,994,313

)

 

 

(1,994,313

)

 

 

(5,982,938

)

 

 

(5,982,938

)

 

Net loss attributable to common stockholders for EPS computation

$

(5,562,403

)

 

$

(3,875,573

)

 

$

(3,667,039

)

 

$

(1,410,891

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number common shares outstanding for basic EPS computation

 

19,434,233

 

 

 

18,906,851

 

 

 

19,408,524

 

 

 

18,742,219

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per common share:

 

 

 

 

 

 

 

 

 

 

 

 

Undistributed loss

$

(0.29

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.08

)

 

Total basic and diluted

$

(0.29

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.08

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Computation of Basic and Diluted Net Loss Per Unit

Loss Per Unit – The computation of basic and diluted net loss per unit is presented below:

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Nine Months Ended

 

 

 

September 30, 2024

 

 

September 30, 2023

 

 

September 30, 2024

 

 

September 30, 2023

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

Numerator

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

$

(3,689,621

)

 

$

(2,065,826

)

 

$

2,297,431

 

 

$

4,579,359

 

 

Less: Net loss (income) allocated to participating unit awards

 

41,358

 

 

 

28,008

 

 

 

(25,672

)

 

 

(58,032

)

 

Undeclared distributions to preferred unitholders

 

(1,994,313

)

 

 

(1,994,313

)

 

 

(5,982,938

)

 

 

(5,982,938

)

 

Net loss attributable to unitholders for EPU computation

$

(5,642,576

)

 

$

(4,032,131

)

 

$

(3,711,179

)

 

$

(1,461,611

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of units outstanding for basic EPU computation

 

20,004,351

 

 

 

19,810,991

 

 

 

19,994,898

 

 

 

19,807,797

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted net loss per unit:

 

 

 

 

 

 

 

 

 

 

 

 

Undistributed loss

$

(0.28

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.07

)

 

Total basic and diluted

$

(0.28

)

 

$

(0.20

)

 

$

(0.19

)

 

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 
v3.24.3
Organization and Description of Business - Additional Information (Detail)
 3 Months Ended 9 Months Ended
Aug. 14, 2024
USD ($)
Jul. 08, 2024
USD ($)
May 03, 2024
USD ($)
Apr. 29, 2024
USD ($)
Feb. 07, 2024
USD ($)
May 04, 2023
USD ($)
Mar. 14, 2023
USD ($)
Feb. 26, 2023
USD ($)
Mar. 31, 2024
shares
Mar. 31, 2023
shares
Sep. 30, 2024
USD ($)
Hotel
Room
Sep. 30, 2023
USD ($)
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Date of incorporation                     Aug. 20, 2004  
Rooms in hotel | Room                     2,786  
Number of independent hotels | Hotel                     3  
Date of commencement of business                     Dec. 21, 2004  
Number of hotels acquired before commencement of business | Hotel                     6  
Proceeds from mortgage loans                     $ 66,250,000 $ 2,715,833
Notional amount     $ 26,000,000                  
Maturity date     May 01, 2026                  
Affiliate [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Notional amount     $ 26,000,000                  
Maturity date     May 01, 2026                  
SOFR [Member] | Affiliate [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Interest rate cap strike rate     3.00%                  
Double Tree by Hilton Laurel [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Mortgage Loan Related to Property Sales           $ 10,000,000            
Mortgage loans of principal balance           $ 10,000,000            
Maturity date of mortgage loan           May 06, 2028            
Interest rate applicable to the mortgage loan           7.35%            
DoubleTree by Hilton Philadelphia Airport [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Debt service coverage reserve             $ 300,000          
Mortgage Loans [Member] | Hotel Alba Tampa [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Mortgage loans maturity term         5 years              
Mortgage Loan Related to Property Sales         $ 35,000,000              
Proceeds from mortgage loans         10,200,000              
Mortgage loans of principal balance         $ 35,000,000              
Maturity date of mortgage loan         Mar. 06, 2029              
Interest rate applicable to the mortgage loan         8.49%              
Mortgage Loans [Member] | The Whitehall [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Extended maturity date               Feb. 26, 2028        
Excess Interest rate on mortgage debt               1.25%        
Fixed interest rate               7.50%        
Mortgage loans maturity term                     25 years  
Real estate tax reserve and debt service reserve               $ 1,500,000        
Interest rate applicable to the mortgage loan                     1.25%  
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Mortgage loans of principal balance                     $ 26,250,000  
Interest rate applicable to the mortgage loan                     7.35%  
Mortgage loan additional product improvement plan                     $ 9,490,000  
Mortgage Loans [Member] | Double Tree By Hilton Philadelphia Airport Hotel [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Extended maturity date       Apr. 29, 2026                
Extended maturity period       2 years                
Mortgage loans of principal balance       $ 35,900,000                
Principal payment       3,000,000                
Amount funded to interest reserve escrow       300,000                
Interest reserve escrow       1,300,000                
Amount funded to PIP reserve account       5,000,000                
Additional cash collateral       1,700,000                
Additional cash collateral releasable to PIP reserve account       $ 1,200,000                
Mortgage Loans [Member] | Double Tree By Hilton Philadelphia Airport Hotel [Member] | SOFR [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Excess Interest rate on mortgage debt       3.50%                
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Interest rate applicable to the mortgage loan                     3.50%  
Mortgage Loans [Member] | DoubleTree by Hilton Jacksonville Riverfront Hotel                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Extended maturity date   Jul. 08, 2029                    
Mortgage loans of principal balance   $ 26,250,000                    
Mortgage loan additional product improvement plan   9,490,000                    
Debt instrument periodic payment   $ 38,700                    
Mortgage Loans [Member] | DoubleTree by Hilton Jacksonville Riverfront Hotel | SOFR [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Excess Interest rate on mortgage debt   3.00%                    
Mortgage Loans [Member] | Desoto Hotel                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Mortgage loans maturity term 25 years                      
Mortgage loans of principal balance $ 5,000,000                      
Interest rate applicable to the mortgage loan 7.50%                      
Maturity date Jul. 01, 2026                      
Common Stock [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Issuance of common stock, shares | shares                 152,360 64,278    
Operating Partnership [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Percentage of operating partnership owned                     98.20%  
Commercial Unit of Hyde Resort & Residences and Hyde Beach House Resort & Residences [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Investment in number of hotels | Hotel                     2  
Hilton, DoubleTree and Hyatt Brands [Member]                        
Organization Consolidation and Presentation of Financial Statements [Line Items]                        
Number of hotels | Hotel                     7  
v3.24.3
Summary of Significant Accounting Policies - Additional Information (Detail)
 3 Months Ended 6 Months Ended 9 Months Ended
Sep. 30, 2024
USD ($)
shares
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
shares
Sep. 30, 2024
USD ($)
Segment
shares
Sep. 30, 2023
USD ($)
Dec. 31, 2023
USD ($)
Summary Of Significant Accounting Policies [Line Items]            
Impairment of hotel properties       $ 0 $ 0  
Mortgage loans $ 320,441,655   $ 320,441,655 320,441,655   $ 317,354,289
Federal Deposit Insurance Corporation protection limits 250,000   250,000 250,000    
Un-amortized franchise fees 322,812   322,812 322,812   195,988
Amortization expense 11,059 $ 11,059   33,176 33,991  
Deferred income taxes $ 0   $ 0 $ 0   0
Minimum percentage of likelihood of realization of deferred tax assets       50.00%    
Deferred tax assets valuation allowance percent 100.00%   100.00% 100.00%    
Uncertain tax positions $ 0   $ 0 $ 0   0
Compensation cost recognized       351,193 370,714  
Advertising cost 701,142 644,111   $ 2,116,737 2,039,089  
Number of reportable segment | Segment       1    
Mortgage loans, net 318,061,006   318,061,006 $ 318,061,006   $ 315,989,194
ESOP [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Compensation cost recognized $ 5,687 13,992 $ 18,505   38,905  
2013 Plan [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Shares issued under plan | shares       745,160    
Restricted shares issued under plan | shares       316,333    
Number of shares deregistered | shares 4,840   4,840 4,840    
Performance-based stock awards granted | shares       0    
Compensation cost recognized $ 22,883 22,883     68,648  
2013 Plan [Member] | Executives [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Shares issued but not vested | shares       45,000    
2022 Long Term Incentive Plan [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Compensation cost recognized $ 18,888 18,888   $ 264,087 263,161  
2022 Long Term Incentive Plan [Member] | Employees and Directors [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Shares issued under plan | shares       2,000,000    
2022 Long Term Incentive Plan [Member] | Executives Employees and Independent Directors [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Unrestricted shares issued under plan | shares       604,028    
Restricted shares issued under plan | shares       232,750    
Stock Issued During Period Shares Restricted And Fully Vest | shares       135,000    
Restaurant Space Within the Hotel [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Leased renewal period 10 years   10 years 10 years    
Additional renewal of agreement 5 years   5 years 5 years    
Space on Roofs of Hotels for Antennas and Satellite Dishes [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Additional renewal of agreement 5 years   5 years 5 years    
Other Operating Departments [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Lease revenue $ 300,000 $ 200,000   $ 900,000 $ 800,000  
Minimum [Member] | Restaurant Space Within the Hotel [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Operating lease, expiring date       Sep. 30, 2027    
Minimum [Member] | Space on Roofs of Hotels for Antennas and Satellite Dishes [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Leased renewal period 1 year   1 year 1 year    
Operating lease, expiring date       Jul. 31, 2024    
Maximum [Member] | 2013 Plan [Member] | Employees and Directors [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Restricted, unrestricted and performance stock awards permitted to grant to employees and directors | shares 750,000   750,000 750,000    
Maximum [Member] | Restaurant Space Within the Hotel [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Operating lease, expiring date       May 31, 2034    
Maximum [Member] | Space on Roofs of Hotels for Antennas and Satellite Dishes [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Leased renewal period 10 years   10 years 10 years    
Operating lease, expiring date       Jul. 31, 2024    
Buildings and Building Improvements [Member] | Minimum [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Estimated useful lives of the assets 7 years   7 years 7 years    
Buildings and Building Improvements [Member] | Maximum [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Estimated useful lives of the assets 39 years   39 years 39 years    
Furniture, Fixtures and Equipment [Member] | Minimum [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Estimated useful lives of the assets 3 years   3 years 3 years    
Furniture, Fixtures and Equipment [Member] | Maximum [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Estimated useful lives of the assets 10 years   10 years 10 years    
Mortgages [Member]            
Summary Of Significant Accounting Policies [Line Items]            
Mortgage loans $ 87,500,000   $ 87,500,000 $ 87,500,000    
Mortgages [Member] | DoubleTree by Hilton Jacksonville Riverfront Hotel            
Summary Of Significant Accounting Policies [Line Items]            
Cash collateral $ 1,200,000   $ 1,200,000 $ 1,200,000    
v3.24.3
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Sep. 30, 2023
Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents [Abstract]      
Cash and cash equivalents $ 14,017,642 $ 17,101,993 $ 19,198,625
Restricted cash 18,488,112   10,205,947
Cash, cash equivalents and restricted cash at the end of the period $ 32,505,754   $ 29,404,572
v3.24.3
Summary of Significant Accounting Policies - Schedule of Recurring Assets and Liabilities Measured at Fair Value (Detail) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Carrying Amount [Member] | Interest-Rate Swap [Member]    
Derivatives Fair Value [Line Items]    
Financial Assets [1]   $ 627,676
Carrying Amount [Member] | Interest-Rate Cap [Member]    
Derivatives Fair Value [Line Items]    
Financial Assets [2] $ 312,468  
Carrying Amount [Member] | Mortgage Loans [Member]    
Derivatives Fair Value [Line Items]    
Financial Liabilities (318,061,006) (315,989,194)
Fair Value [Member] | Interest-Rate Swap [Member]    
Derivatives Fair Value [Line Items]    
Financial Assets [1]   627,676
Fair Value [Member] | Interest-Rate Cap [Member]    
Derivatives Fair Value [Line Items]    
Financial Assets [2] 312,468  
Fair Value [Member] | Mortgage Loans [Member]    
Derivatives Fair Value [Line Items]    
Financial Liabilities $ (310,847,559) $ (303,949,790)
[1] The interest-rate swap agreement allowed the Company to receive a variable rate of interest based upon 1-month SOFR in exchange for a fixed rate of 2.826% on a notional amount which approximated the declining balance of the mortgage loan on the Hotel Alba. The interest-rate swap was terminated on February 14, 2024.
[2] The interest-rate cap agreement allows the Company to receive a variable rate of interest based upon the amount in which 1-month SOFR exceeds 3.0% on a notional amount of $26.0 million on the DoubleTree by Hilton Philadelphia Airport.
v3.24.3
Summary of Significant Accounting Policies - Schedule of Recurring Assets and Liabilities Measured at Fair Value (Parenthetical) (Detail) - USD ($)
$ in Millions
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
DoubleTree by Hilton Philadelphia Airport [Member]    
Derivatives Fair Value [Line Items]    
Loan rate swapped for fixed interest rate 3.00%  
Variable rate description 1-month SOFR  
Notional amount $ 26.0  
Hotel Alba Tampa [Member]    
Derivatives Fair Value [Line Items]    
Loan rate swapped for fixed interest rate   2.826%
Variable rate description   1-month SOFR
v3.24.3
Investment in Hotel Properties, Net - Schedule of Investment in Hotel Properties, Net (Detail) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Line Items]    
Investment in Hotel Properties, Gross $ 567,653,062 $ 536,183,227
Less: accumulated depreciation (194,700,149) (181,264,121)
Investment in Hotel Properties, Net 372,952,913 354,919,106
Land and Land Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Investment in Hotel Properties, Gross 61,349,993 61,114,486
Buildings and Improvements [Member]    
Property, Plant and Equipment [Line Items]    
Investment in Hotel Properties, Gross 429,293,211 418,833,706
Right of Use Assets [Member]    
Property, Plant and Equipment [Line Items]    
Investment in Hotel Properties, Gross 4,054,169 4,733,406
Finance Lease Right of Use Assets [Member]    
Property, Plant and Equipment [Line Items]    
Investment in Hotel Properties, Gross 22,921,630  
Furniture, Fixtures and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Investment in Hotel Properties, Gross $ 50,034,059 $ 51,501,629
v3.24.3
Debt - Additional Information (Detail) - USD ($)
 9 Months Ended 12 Months Ended
Jul. 08, 2024
Feb. 03, 2023
Dec. 09, 2022
May 06, 2020
Apr. 28, 2020
Apr. 16, 2020
Sep. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]                
Mortgage loan outstanding balance             $ 318,100,000 $ 316,000,000
DoubleTree by Hilton Philadelphia Airport [Member]                
Debt Instrument [Line Items]                
Loan rate swapped for fixed interest rate             3.00%  
Promissory Note [Member]                
Debt Instrument [Line Items]                
Paycheck protection program loan term             2 years  
Paycheck protection program extension loan term             5 years  
Paycheck protection program loan interest rate             1.00%  
Paycheck protection program loan repayment terms             Equal payments of principal and interest begin no later than 10 months following origination of the loan and are amortized over the remaining term of the loan.  
Paycheck protection program loan amount             $ 900,000 $ 1,500,000
Paycheck protection program loan forgiveness monthly payments to extinguish loan   $ 13,402 $ 56,809          
Paycheck protection program loan forgiveness amount received   $ 268,309 $ 4,600,000          
Promissory Note [Member] | Fifth Third Bank [Member]                
Debt Instrument [Line Items]                
Paycheck protection program loan amount       $ 952,700 $ 9,400,000      
Promissory Note [Member] | Operating Partnership [Member]                
Debt Instrument [Line Items]                
Paycheck protection program loan amount           $ 333,500    
Paycheck protection program loan forgiveness monthly payments           $ 18,000    
Mortgages [Member] | DoubleTree by Hilton Philadelphia Airport [Member]                
Debt Instrument [Line Items]                
Debt instrument maturity date             Apr. 29, 2026  
Mortgages [Member] | DoubleTree by Hilton Jacksonville Riverfront [Member]                
Debt Instrument [Line Items]                
Debt instrument maturity date             Jul. 08, 2029  
Mortgages [Member] | Georgian Terrace [Member]                
Debt Instrument [Line Items]                
Decrease in level of indebtness             $ 5,250,000  
Debt instrument maturity date             Jun. 01, 2025  
Mortgages [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member]                
Debt Instrument [Line Items]                
Decrease in level of indebtness             $ 12,500,000  
Debt instrument maturity date             Oct. 01, 2025  
Mortgages [Member] | DoubleTree by Hilton Jacksonville Riverfront Hotel                
Debt Instrument [Line Items]                
Cash collateral             $ 1,200,000  
Extended maturity date Jul. 08, 2029              
v3.24.3
Debt - Schedule of Mortgage Debt Obligations on Hotels (Detail) - USD ($)
 9 Months Ended
May 04, 2023
Sep. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]      
Mortgage loans   $ 320,441,655 $ 317,354,289
Deferred financing costs, net   (2,405,023) (1,407,979)
Unamortized premium on loan   24,374 42,884
Total Mortgage Loans, Net   318,061,006 315,989,194
Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   87,500,000  
The DeSoto [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 29,493,868 30,248,929
Prepayment Penalties   Yes  
Maturity Date   Jul. 01, 2026  
Mortgage loans maturity term   25 years  
Interest rate applicable to the mortgage loan   4.25%  
The DeSoto [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 5,000,000  
Prepayment Penalties   Yes  
Maturity Date   Jul. 01, 2026  
Mortgage loans maturity term   25 years  
Interest rate applicable to the mortgage loan   7.50%  
DoubleTree by Hilton Jacksonville Riverfront [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 26,172,600 31,749,695
Prepayment Penalties   None  
Maturity Date   Jul. 08, 2029  
Mortgage loans maturity term   25 years  
Interest rate applicable to the mortgage loan   3.00%  
Double Tree by Hilton Laurel [Member]      
Debt Instrument [Line Items]      
Interest rate applicable to the mortgage loan 7.35%    
Double Tree by Hilton Laurel [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 10,000,000 10,000,000
Maturity Date   May 06, 2028  
Interest rate applicable to the mortgage loan   7.35%  
DoubleTree by Hilton Philadelphia Airport [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 35,915,488 38,915,488
Prepayment Penalties   None  
Maturity Date   Apr. 29, 2026  
Interest rate applicable to the mortgage loan   3.50%  
DoubleTree Resort by Hilton Hollywood Beach [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 50,646,678 51,495,662
Maturity Date   Oct. 01, 2025  
Mortgage loans maturity term   30 years  
Interest rate applicable to the mortgage loan   4.913%  
Georgian Terrace [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 38,740,475 39,455,095
Maturity Date   Jun. 01, 2025  
Mortgage loans maturity term   30 years  
Interest rate applicable to the mortgage loan   4.42%  
Hotel Alba Tampa, Tapestry Collection by Hilton [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 35,000,000 24,269,200
Maturity Date   Mar. 06, 2029  
Interest rate applicable to the mortgage loan   8.49%  
Hotel Ballast Wilmington,Tapestry Collection by Hilton [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 30,020,310 30,755,374
Prepayment Penalties   Yes  
Maturity Date   Jan. 01, 2027  
Mortgage loans maturity term   25 years  
Interest rate applicable to the mortgage loan   4.25%  
Hyatt Centric Arlington [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 45,607,309 46,454,972
Prepayment Penalties   Yes  
Maturity Date   Oct. 01, 2028  
Mortgage loans maturity term   30 years  
Interest rate applicable to the mortgage loan   5.25%  
The Whitehall [Member] | Mortgage Loans [Member]      
Debt Instrument [Line Items]      
Mortgage loans   $ 13,844,927 $ 14,009,874
Prepayment Penalties   None  
Maturity Date   Feb. 26, 2028  
Mortgage loans maturity term   25 years  
Interest rate applicable to the mortgage loan   1.25%  
v3.24.3
Debt - Schedule of Mortgage Debt Obligations on Hotels (Parenthetical) (Detail) - USD ($)
 9 Months Ended
May 03, 2024
Feb. 26, 2023
Sep. 30, 2024
Dec. 31, 2023
May 04, 2023
Debt Instrument [Line Items]          
Principal amount of mortgage loan     $ 320,441,655 $ 317,354,289  
Derivative maturity date May 01, 2026        
Notional amount $ 26,000,000        
SOFR [Member]          
Debt Instrument [Line Items]          
Interest rate cap strike rate 3.00%        
DoubleTree by Hilton Philadelphia Airport [Member]          
Debt Instrument [Line Items]          
Loan rate swapped for fixed interest rate     3.00%    
Double Tree by Hilton Laurel [Member]          
Debt Instrument [Line Items]          
Mortgage loans of principal balance         $ 10,000,000
Mortgage Loans [Member]          
Debt Instrument [Line Items]          
Principal amount of mortgage loan     $ 87,500,000    
Mortgage Loans [Member] | The DeSoto [Member]          
Debt Instrument [Line Items]          
Amortization Period     25 years    
Interest-only payment period     1 year    
Period before maturity in which prepayment is allowed with out penalty     120 days    
Principal amount of mortgage loan     $ 29,493,868 30,248,929  
Maturity Date     Jul. 01, 2026    
Mortgage Loans [Member] | DoubleTree by Hilton Jacksonville Riverfront [Member]          
Debt Instrument [Line Items]          
Amortization Period     25 years    
Principal amount of mortgage loan     $ 26,172,600 31,749,695  
Maturity Date     Jul. 08, 2029    
Mortgage Loans [Member] | DoubleTree by Hilton Philadelphia Airport [Member]          
Debt Instrument [Line Items]          
Principal amount of mortgage loan     $ 35,915,488 38,915,488  
Maturity Date     Apr. 29, 2026    
Mortgage Loans [Member] | DoubleTree Resort by Hilton Hollywood Beach [Member]          
Debt Instrument [Line Items]          
Amortization Period     30 years    
Principal amount of mortgage loan     $ 50,646,678 51,495,662  
Prepayment date before maturity     2025-06    
Maturity Date     Oct. 01, 2025    
Mortgage Loans [Member] | Georgian Terrace [Member]          
Debt Instrument [Line Items]          
Amortization Period     30 years    
Principal amount of mortgage loan     $ 38,740,475 39,455,095  
Prepayment date before maturity     2025-02    
Maturity Date     Jun. 01, 2025    
Mortgage Loans [Member] | Hotel Alba Tampa, Tapestry Collection by Hilton [Member]          
Debt Instrument [Line Items]          
Principal amount of mortgage loan     $ 35,000,000 24,269,200  
Maturity Date     Mar. 06, 2029    
Mortgage Loans [Member] | Hotel Ballast Wilmington,Tapestry Collection by Hilton [Member]          
Debt Instrument [Line Items]          
Amortization Period     25 years    
Interest-only payment period     1 year    
Period before maturity in which prepayment is allowed with out penalty     120 days    
Principal amount of mortgage loan     $ 30,020,310 30,755,374  
Maturity Date     Jan. 01, 2027    
Mortgage Loans [Member] | Hyatt Centric Arlington [Member]          
Debt Instrument [Line Items]          
Amortization Period     30 years    
Principal amount of mortgage loan     $ 45,607,309 46,454,972  
Debt instrument prepayment lockout period     5 years    
Maturity Date     Oct. 01, 2028    
Debt instrument prepayment without penalty period during final term     4 months    
Mortgage Loans [Member] | Hyatt Centric Arlington [Member] | Minimum [Member]          
Debt Instrument [Line Items]          
Debt instrument prepayment penalty period     6 years    
Mortgage Loans [Member] | Hyatt Centric Arlington [Member] | Maximum [Member]          
Debt Instrument [Line Items]          
Debt instrument prepayment penalty period     10 years    
Mortgage Loans [Member] | The Whitehall [Member]          
Debt Instrument [Line Items]          
Amortization Period     25 years    
Principal amount of mortgage loan     $ 13,844,927 14,009,874  
Extended maturity date   Feb. 26, 2028      
Excess Interest rate on mortgage debt   1.25%      
Maturity Date     Feb. 26, 2028    
Mortgage Loans [Member] | The Whitehall [Member] | LIBOR [Member]          
Debt Instrument [Line Items]          
Excess Interest rate on mortgage debt     1.25%    
Loan rate swapped for fixed interest rate     7.50%    
Mortgage Loans [Member] | Double Tree by Hilton Laurel [Member]          
Debt Instrument [Line Items]          
Principal amount of mortgage loan     $ 10,000,000 $ 10,000,000  
Maturity Date     May 06, 2028    
Mortgage loans of principal balance     $ 26,250,000    
Renovation tranche amount     $ 9,490,000    
v3.24.3
Debt - Schedule of Future Mortgage Debt Maturities (Detail) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
For the remaining three months ended December 31, 2024 $ 1,610,426  
December 31, 2025 92,910,409  
December 31, 2026 99,968,858  
December 31, 2027 2,221,620  
December 31, 2028 64,531,442  
December 31, 2029 59,198,900  
Total future maturities $ 320,441,655 $ 317,354,289
v3.24.3
Commitments and Contingencies - Additional Information (Detail)
 1 Months Ended 3 Months Ended 9 Months Ended
Sep. 26, 2019
USD ($)
RenewalPeriod
Mar. 01, 2018
USD ($)
RenewalPeriod
Dec. 31, 2023
USD ($)
Apr. 30, 2019
May 31, 2014
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
ft²
Sep. 30, 2023
USD ($)
Operating Leased Assets [Line Items]                  
Percentage of appraised value of land           8.00%   8.00%  
Management Agreement for Parking Garage and Poolside [Member]                  
Operating Leased Assets [Line Items]                  
Annual payment $ 270,100                
Hyatt Centric Arlington [Member]                  
Operating Leased Assets [Line Items]                  
Rental payments per year in base rent under ground lease   $ 50,000              
Hyatt Centric Arlington [Member] | Franchise Agreement with Affiliate of Hyatt Hotels Corporation Operating as Hyatt Centric Arlington [Member]                  
Operating Leased Assets [Line Items]                  
Annual payment               $ 1,792,000  
Ground lease percentage rent on gross rooms revenues in excess of thresholds   3.50%              
Initial term of ground lease expires date   2025-07              
Number of additional renewal periods extended under ground lease | RenewalPeriod   5              
Duration period under ground lease for each rental periods extended   10 years              
Hyde Beach House [Member] | Management Agreement for Parking Garage and Poolside [Member]                  
Operating Leased Assets [Line Items]                  
Lessee, operating lease, option to extend               initial term that expires in 2034 and which may be extended for four additional renewal periods of 5 years each.  
Lessee, operating lease, existence of option to extend [true false] true                
Rental payments, Percentage of increases per year 5.00%                
Rental payments, Percentage of increases, Term every five years                
Lessee, operating lease expiration year 2034                
Number of additional renewal periods | RenewalPeriod 4                
Leased renewal period 5 years                
Hyde Beach House [Member] | Management Agreement for Parking Garage and Poolside [Member] | Indirect Expenses [Member]                  
Operating Leased Assets [Line Items]                  
Rent expense           $ 68,879 $ 67,750 $ 204,379 $ 203,250
The DeSoto Hotel Property [Member]                  
Operating Leased Assets [Line Items]                  
Area of commercial space leased | ft²               2,086  
Operating lease, expiring date               Oct. 31, 2006  
Duration period under renewal option second               5 years  
Expiration date three under renewal option second               Oct. 31, 2026  
The DeSoto Hotel Property [Member] | Indirect Expenses [Member]                  
Operating Leased Assets [Line Items]                  
Rent expense           20,983 20,983 $ 62,949 62,949
Hotel Alba Tampa [Member]                  
Operating Leased Assets [Line Items]                  
Lease agreement       5 years       5 years  
Commencement date of agreement       2019-07       2009-07  
Lessee, operating lease, option to extend               In May 2014, we extended the agreement for an additional five years. We signed a new agreement in April 2019, which commenced in July 2019, goes for five years, and can be renewed for an additional five years. The new agreement expires in July 2024,  
Lessee, operating lease, existence of option to extend [true false]         true        
Operating lease, expiring date               2024-07  
Annual payment               $ 2,432  
Additional renewal of agreement         5 years        
Hotel Alba Tampa [Member] | Indirect Expenses [Member]                  
Operating Leased Assets [Line Items]                  
Rent expense           $ 636 $ 651 $ 1,937 $ 1,952
8,500 Square Feet of Commercial Office Space [Member]                  
Operating Leased Assets [Line Items]                  
Rent concession     $ 257,731            
Six Year Operating Lease Property [Member] | The DeSoto Hotel Property [Member]                  
Operating Leased Assets [Line Items]                  
Duration of operating lease term               6 years  
Ninety Nine Year Operating Lease Property [Member] | The DeSoto Hotel Property [Member]                  
Operating Leased Assets [Line Items]                  
Duration of operating lease term               99 years  
Operating lease, expiring date               Jul. 31, 2086  
Rental income recognized during period               $ 0  
Ninety Nine Year Operating Lease Property [Member] | The DeSoto Hotel Property [Member] | Indirect Expenses [Member]                  
Operating Leased Assets [Line Items]                  
Original lump sum rent payment received               $ 990  
v3.24.3
Commitments and Contingencies (Additional Information) (Detail1)
 9 Months Ended
Sep. 30, 2024
USD ($)
Hotel
Dec. 29, 2016
USD ($)
Operating Leased Assets [Line Items]    
Number of hotels operate under franchise licenses | Hotel 7  
Maximum amount allocated to purchase common stock under ESOP   $ 5,000,000
Balance on the ESOP loan commitment $ 1,700,000  
Leaving capacity for additional Borrowing on the ESOP loan commitment $ 3,300,000  
Hotel Ballast [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Monthly contribution of room revenues 4.00%  
The DeSoto [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Monthly contribution of room revenues 4.00%  
Double Tree by Hilton Laurel [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Monthly contribution of room revenues 4.00%  
Double Tree by Hilton Jacksonville Riverside [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Monthly contribution of room revenues 4.00%  
DoubleTree Resort by Hilton Hollywood Beach [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Restricted cash reserve annual insurance premiums due for property amount each month equal to one-twelfth (1/12) of the annual insurance premiums  
Monthly contribution of room revenues 4.00%  
Hotel Alba [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Restricted cash reserve annual insurance premiums due for property amount each month equal to one-twelfth (1/12) of the annual insurance premiums  
Monthly contribution of room revenues 4.00%  
Whitehall [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Monthly contribution of room revenues 4.00%  
Georgian Terrace [Member]    
Operating Leased Assets [Line Items]    
Restricted cash reserve amount equal to one-twelfth (1/12) of the annual real estate taxes due for the properties  
Monthly contribution of room revenues 4.00%  
DoubleTree by Hilton Philadelphia Airport [Member]    
Operating Leased Assets [Line Items]    
Monthly contribution of room revenues 4.00%  
Minimum [Member]    
Operating Leased Assets [Line Items]    
Franchise fees of room revenues 3.00%  
Additional fees of gross revenues from the hotels 3.00%  
Franchise agreement expiry date 2024-10  
Maximum [Member]    
Operating Leased Assets [Line Items]    
Franchise fees of room revenues 5.00%  
Additional fees of gross revenues from the hotels 4.00%  
Franchise agreement expiry date 2038-03  
Maximum [Member] | ESOP [Member]    
Operating Leased Assets [Line Items]    
Borrowed amount   $ 5,000,000
Chesapeake Hospitality [Member] | Individual Hotel Management Agreements [Member]    
Operating Leased Assets [Line Items]    
Number of wholly-owned hotels operated under master management agreement | Hotel 10  
Expiry date of master management agreement on March 31, 2035 and may be extended for up to two additional periods of five years each, subject to the approval of both parties.  
Master management agreement expiration date Mar. 31, 2035  
Hyatt Centric Arlington [Member]    
Operating Leased Assets [Line Items]    
Monthly contribution of room revenues 4.00%  
v3.24.3
Leases - Additional Information (Detail)
 1 Months Ended 3 Months Ended 9 Months Ended
Sep. 26, 2019
USD ($)
RenewalPeriod
Mar. 01, 2018
USD ($)
RenewalPeriod
Dec. 31, 2023
USD ($)
Dec. 31, 2019
USD ($)
ft²
Apr. 30, 2019
May 31, 2014
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
ft²
Sep. 30, 2023
USD ($)
Lessee, Lease, Description [Line Items]                    
Percentage of appraised value of land             8.00%   8.00%  
Finance lease asset             $ 22,958,869   $ 22,958,869  
Finance lease liability             22,742,195   22,742,195  
Revision of Prior Period, Adjustment [Member]                    
Lessee, Lease, Description [Line Items]                    
Finance lease asset             22,716,081   22,716,081  
Finance lease liability             $ 22,400,000   $ 22,400,000  
Restaurant Space Within the Hotel [Member]                    
Lessee, Lease, Description [Line Items]                    
Additional renewal of agreement             5 years   5 years  
Leased renewal period             10 years   10 years  
Space on Roofs of Hotels for Antennas and Satellite Dishes [Member]                    
Lessee, Lease, Description [Line Items]                    
Additional renewal of agreement             5 years   5 years  
Hotel, Other [Member]                    
Lessee, Lease, Description [Line Items]                    
Lease revenue             $ 300,000 $ 200,000 $ 900,000 $ 800,000
Minimum [Member] | Restaurant Space Within the Hotel [Member]                    
Lessee, Lease, Description [Line Items]                    
Operating lease, expiring date                 Sep. 30, 2027  
Minimum [Member] | Space on Roofs of Hotels for Antennas and Satellite Dishes [Member]                    
Lessee, Lease, Description [Line Items]                    
Operating lease, expiring date                 Jul. 31, 2024  
Leased renewal period             1 year   1 year  
Maximum [Member] | Restaurant Space Within the Hotel [Member]                    
Lessee, Lease, Description [Line Items]                    
Operating lease, expiring date                 May 31, 2034  
Maximum [Member] | Space on Roofs of Hotels for Antennas and Satellite Dishes [Member]                    
Lessee, Lease, Description [Line Items]                    
Operating lease, expiring date                 Jul. 31, 2024  
Leased renewal period             10 years   10 years  
Management Agreement for Parking Garage and Poolside [Member]                    
Lessee, Lease, Description [Line Items]                    
Annual payment $ 270,100                  
Hyde Beach House [Member] | Management Agreement for Parking Garage and Poolside [Member]                    
Lessee, Lease, Description [Line Items]                    
Lessee, operating lease, option to extend                 initial term that expires in 2034 and which may be extended for four additional renewal periods of 5 years each.  
Lessee, operating lease, existence of option to extend [true false] true                  
Rental payments, Percentage of increases per year 5.00%                  
Rental payments, Percentage of increases, Term every five years                  
Lessee, operating lease expiration year 2034                  
Number of additional renewal periods | RenewalPeriod 4                  
Leased renewal period 5 years                  
Hyatt Centric Arlington [Member]                    
Lessee, Lease, Description [Line Items]                    
Rental payments per year in base rent under ground lease   $ 50,000                
Hyatt Centric Arlington [Member] | Franchise Agreement with Affiliate of Hyatt Hotels Corporation Operating as Hyatt Centric Arlington [Member]                    
Lessee, Lease, Description [Line Items]                    
Annual payment                 $ 1,792,000  
Ground lease percentage rent on gross rooms revenues in excess of thresholds   3.50%                
Initial term of ground lease expires date   2025-07                
Number of additional renewal periods extended under ground lease | RenewalPeriod   5                
Duration period under ground lease for each rental periods extended   10 years                
Indirect Expenses [Member] | Hyde Beach House [Member] | Management Agreement for Parking Garage and Poolside [Member]                    
Lessee, Lease, Description [Line Items]                    
Rent expense             $ 68,879 67,750 $ 204,379 203,250
The DeSoto Hotel Property [Member]                    
Lessee, Lease, Description [Line Items]                    
Area of commercial space leased | ft²                 2,086  
Operating lease, expiring date                 Oct. 31, 2006  
Duration period under renewal option second                 5 years  
Expiration date three under renewal option second                 Oct. 31, 2026  
The DeSoto Hotel Property [Member] | Indirect Expenses [Member]                    
Lessee, Lease, Description [Line Items]                    
Rent expense             20,983 20,983 $ 62,949 62,949
The DeSoto Hotel Property [Member] | Six Year Operating Lease Property [Member]                    
Lessee, Lease, Description [Line Items]                    
Duration of operating lease term                 6 years  
The DeSoto Hotel Property [Member] | Ninety Nine Year Operating Lease Property [Member]                    
Lessee, Lease, Description [Line Items]                    
Duration of operating lease term                 99 years  
Operating lease, expiring date                 Jul. 31, 2086  
Rental income recognized during period                 $ 0  
The DeSoto Hotel Property [Member] | Ninety Nine Year Operating Lease Property [Member] | Indirect Expenses [Member]                    
Lessee, Lease, Description [Line Items]                    
Original lump sum rent payment received                 $ 990  
Hotel Alba Tampa [Member]                    
Lessee, Lease, Description [Line Items]                    
Lease agreement         5 years       5 years  
Commencement date of agreement         2019-07       2009-07  
Lessee, operating lease, option to extend                 In May 2014, we extended the agreement for an additional five years. We signed a new agreement in April 2019, which commenced in July 2019, goes for five years, and can be renewed for an additional five years. The new agreement expires in July 2024,  
Lessee, operating lease, existence of option to extend [true false]           true        
Additional renewal of agreement           5 years        
Operating lease, expiring date                 2024-07  
Annual payment                 $ 2,432  
Hotel Alba Tampa [Member] | Indirect Expenses [Member]                    
Lessee, Lease, Description [Line Items]                    
Rent expense             636 651 $ 1,937 1,952
Williamsburg Virginia [Member]                    
Lessee, Lease, Description [Line Items]                    
Area of commercial space leased | ft²       8,500            
Rent expense       $ 218,875            
Commencement date of agreement                 Jan. 01, 2020  
Lease, agreement term       10 years            
Lease rent increase each successive period percentage       3.00%            
Tenant improvement allowance       $ 200,000            
Williamsburg Virginia [Member] | General and Administrative [Member]                    
Lessee, Lease, Description [Line Items]                    
Rent expense             $ 36,566 $ 55,902 $ 109,699 $ 167,706
8,500 Square Feet of Commercial Office Space [Member]                    
Lessee, Lease, Description [Line Items]                    
Rent concession     $ 257,731              
v3.24.3
Leases - Schedule of Operating and Finance Lease Term Years, Weighted-average Discount Rates, Right of Use Assets and Lease Liabilities (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Leases [Abstract]    
Weighted-average remaining lease term, including reasonably certain extension options (years), Operating 27 years 9 months 10 days  
Weighted-average remaining lease term, including reasonably certain extension options (years), Finance 50 years 3 months 25 days  
Weighted-average discount rate, Operating 8.02%  
Weighted-average discount rate, Finance 7.37%  
Right of use assets, Operating $ 4,803,689  
Right of use assets, Finance 22,958,869  
Lease liabilities, Operating (4,803,689) $ (5,041,019)
Lease liabilities, Finance $ (22,742,195)  
v3.24.3
Leases - Summary of Lease Related Assets and Liabilities (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Lessee, Lease, Description [Line Items]    
Right of use assets $ 4,803,689  
Finance lease right of use assets $ 22,958,869  
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Real Estate Investment Property Excluding Held For Sale Net Real Estate Investment Property Excluding Held For Sale Net
Lease Assets, Total $ 27,762,558 $ 5,619,033
Lease obligations under ROU assets $ 4,803,689 $ 5,041,019
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] Accounts Payable and Other Accrued Liabilities Accounts Payable and Other Accrued Liabilities
Finance lease liabilities $ 22,742,195  
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] Finance lease liabilities Finance lease liabilities
Total lease liabilities $ 27,545,884 $ 5,041,019
Prepaid Expenses, Inventory and Other Assets [Member]    
Lessee, Lease, Description [Line Items]    
Right of use assets 749,520 822,203
Investment in Hotel Properties, Net [Member]    
Lessee, Lease, Description [Line Items]    
Right of use assets $ 4,054,169 $ 4,796,830
v3.24.3
Leases - Schedule of Lease Costs (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Finance lease costs        
Total lease costs $ 555,009 $ 348,812 $ 1,144,076 $ 971,437
Corporate General and Administrative [Member]        
Operating lease costs        
Fixed 39,706 59,045 119,119 177,134
Hotel Operating Expenses - Other Operating [Member]        
Operating lease costs        
Fixed 68,126 67,750 204,379 203,250
Hotel Operating Expenses - Indirect [Member]        
Operating lease costs        
Fixed 37,803 69,943 126,467 134,829
Variable 158,301 $ 152,074 416,849 $ 456,224
Finance lease costs        
Variable 58,054   58,054  
Depreciation and Amortization [Member]        
Finance lease costs        
Amortization of lease assets (49,750)   (67,696)  
Interest Expense [Member]        
Finance lease costs        
Interest on lease liabilities $ 143,269   $ 151,512  
v3.24.3
Leases - Schedule of Undiscounted Cash Flows (Details) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Lessee, Operating Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]    
For the three months ending December 31, 2024 $ 137,961  
December 31, 2025 553,775  
December 31, 2026 552,233  
December 31, 2027 551,196  
December 31, 2028 524,984  
December 31, 2029 528,701  
December 31, 2030 and thereafter 10,240,006  
Total undiscounted lease payments 13,088,856  
Less imputed interest (8,285,167)  
Total lease liability 4,803,689 $ 5,041,019
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]    
For the three months ending December 31, 2024 27,555  
December 31, 2025 981,219  
December 31, 2026 1,845,156  
December 31, 2027 1,842,802  
December 31, 2028 1,827,859  
December 31, 2029 1,812,544  
December 31, 2030 and thereafter 81,535,998  
Total undiscounted lease payments 89,873,133  
Less imputed interest (67,130,938)  
Total lease liability $ 22,742,195  
v3.24.3
Leases - Schedule of Minimum Future Lease Payments (Detail)
Sep. 30, 2024
USD ($)
Finance Lease, Liability, to be Paid, Fiscal Year Maturity [Abstract]  
For the three months ending December 31, 2024 $ 252,543
December 31, 2025 997,194
December 31, 2026 936,515
December 31, 2027 931,178
December 31, 2028 947,413
December 31, 2029 996,352
December 31, 2030 and thereafter 9,424,176
Total $ 14,485,371
v3.24.3
Preferred Stock and Units - Additional Information (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Preferred Units [Line Items]                
Preferred stock, shares authorized   11,000,000           11,000,000
Preferred stock, liquidation preference per share $ 25.00         $ 25.00   $ 25.00
Preferred dividends paid           $ 5,982,938 $ 7,977,251  
Preferred stock amount of undeclared and cumulative preferred dividends           21,900,000    
Preferred stock amount of undeclared and cumulative preferred dividends           $ 21,900,000    
Sotherly Hotels LP [Member]                
Preferred Units [Line Items]                
Preferred stock, liquidation preference per share $ 25.00         $ 25.00   $ 25.00
Preferred dividends paid           $ 5,982,938 $ 7,977,251  
Special dividend declared $ 1,994,313 $ 1,994,310 $ 1,994,313 $ 1,994,312 $ 3,988,625      
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member]                
Preferred Units [Line Items]                
Preferred stock, shares authorized 11,000,000         11,000,000   11,000,000
Preferred stock, liquidation preference per share $ 25.00         $ 25.00   $ 25.00
Total undeclared and unpaid cash dividends           $ 8,052,550    
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]                
Preferred Units [Line Items]                
Preferred stock, shares authorized 11,000,000         11,000,000   11,000,000
Preferred stock, liquidation preference per share $ 25.00         $ 25.00   $ 25.00
Total undeclared and unpaid cash dividends           $ 7,287,931    
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]                
Preferred Units [Line Items]                
Preferred stock, shares authorized 11,000,000         11,000,000   11,000,000
Preferred stock, liquidation preference per share $ 25.00         $ 25.00   $ 25.00
Total undeclared and unpaid cash dividends           $ 6,596,958    
8.0% Series B Cumulative Redeemable Perpetual Preferred Units [Member]                
Preferred Units [Line Items]                
Total undeclared and unpaid cash dividends           8,052,550    
7.875% Series C Cumulative Redeemable Perpetual Preferred Units [Member]                
Preferred Units [Line Items]                
Total undeclared and unpaid cash dividends           7,287,931    
8.25% Series D Cumulative Redeemable Perpetual Preferred Units [Member]                
Preferred Units [Line Items]                
Total undeclared and unpaid cash dividends           $ 6,596,958    
v3.24.3
Preferred Stock and Units - Schedule of Series of Cumulative Redeemable Perpetual Preferred Stock (Detail) - $ / shares
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Class Of Stock [Line Items]    
Preferred Stock, Liquidation Preference $ 25.00 $ 25.00
8.0% Series B Cumulative Redeemable Perpetual Preferred Stock [Member]    
Class Of Stock [Line Items]    
Preferred Stock, Per Annum Rate 8.00% 8.00%
Preferred Stock, Liquidation Preference $ 25.00 $ 25.00
Preferred Stock, Number of Shares Issued 1,464,100 1,464,100
Preferred Stock, Number of Shares Outstanding 1,464,100 1,464,100
Preferred Stock, Quarterly Distributions Per Share $ 0.500000 $ 0.500000
7.875% Series C Cumulative Redeemable Perpetual Preferred Stock [Member]    
Class Of Stock [Line Items]    
Preferred Stock, Per Annum Rate 7.875% 7.875%
Preferred Stock, Liquidation Preference $ 25.00 $ 25.00
Preferred Stock, Number of Shares Issued 1,346,110 1,346,110
Preferred Stock, Number of Shares Outstanding 1,346,110 1,346,110
Preferred Stock, Quarterly Distributions Per Share $ 0.492188 $ 0.492188
8.25% Series D Cumulative Redeemable Perpetual Preferred Stock [Member]    
Class Of Stock [Line Items]    
Preferred Stock, Per Annum Rate 8.25% 8.25%
Preferred Stock, Liquidation Preference $ 25.00 $ 25.00
Preferred Stock, Number of Shares Issued 1,163,100 1,163,100
Preferred Stock, Number of Shares Outstanding 1,163,100 1,163,100
Preferred Stock, Quarterly Distributions Per Share $ 0.515625 $ 0.515625
v3.24.3
Preferred Stock and Units - Schedule of Series of Cumulative Redeemable Perpetual Preferred Units (Detail) - Sotherly Hotels LP [Member] - $ / shares
 9 Months Ended
Sep. 30, 2024
Dec. 31, 2023
8% Series B Cumulative Redeemable Perpetual Preferred Units [Member]    
Preferred Units [Line Items]    
Preferred Units, Per Annum Rate 8.00%  
Preferred Units, Liquidation Preference $ 25.00  
Preferred Units, Number of Units Issued 1,464,100 1,464,100
Preferred Units, Number of Units Outstanding 1,464,100 1,464,100
Preferred Units, Quarterly Distributions Per Unit $ 0.500000  
7.875% Series C Cumulative Redeemable Perpetual Preferred Units [Member]    
Preferred Units [Line Items]    
Preferred Units, Per Annum Rate 7.875%  
Preferred Units, Liquidation Preference $ 25.00  
Preferred Units, Number of Units Issued 1,346,110 1,346,110
Preferred Units, Number of Units Outstanding 1,346,110 1,346,110
Preferred Units, Quarterly Distributions Per Unit $ 0.492188  
8.25% Series D Cumulative Redeemable Perpetual Preferred Units [Member]    
Preferred Units [Line Items]    
Preferred Units, Per Annum Rate 8.25%  
Preferred Units, Liquidation Preference $ 25.00  
Preferred Units, Number of Units Issued 1,163,100 1,163,100
Preferred Units, Number of Units Outstanding 1,163,100 1,163,100
Preferred Units, Quarterly Distributions Per Unit $ 0.515625  
v3.24.3
Common Stock and Units - Additional Information (Detail)
 3 Months Ended 9 Months Ended 12 Months Ended
Jan. 18, 2024
shares
Aug. 30, 2023
shares
Aug. 18, 2023
shares
Apr. 28, 2023
shares
Jan. 23, 2023
shares
Jan. 12, 2023
shares
Mar. 31, 2024
shares
Mar. 31, 2023
shares
Sep. 30, 2024
USD ($)
$ / shares
shares
Dec. 16, 2021
shares
Dec. 31, 2023
USD ($)
$ / shares
shares
Class of Stock [Line Items]                      
Common stock, shares authorized                 69,000,000   69,000,000
Common stock, par value | $ / shares                 $ 0.01   $ 0.01
Voting right                 Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders.    
Number of issued unit in Operating Partnership 152,360       205,000 15,000          
Common stock, shares outstanding                 19,849,165   19,696,805
Common stock exchange ratio                 1    
Redemption of units in operating partnership                   0  
Conversion of units in operating partnership to shares of common stock, number of units   133,099 252,903 75,000              
Operating Partnership common units outstanding                 20,213,351   20,060,991
Operating Partnership common units not owned                 364,186   364,186
Unpaid common dividends and distributions amount to holders | $                 $ 2,088,160    
Sotherly Hotels LP [Member]                      
Class of Stock [Line Items]                      
Fair market value | $                 $ 400,000   $ 500,000
Common Stock [Member]                      
Class of Stock [Line Items]                      
Issuance of common stock, shares             152,360 64,278      
Restricted shares issued               220,000      
Common Stock [Member] | Director [Member]                      
Class of Stock [Line Items]                      
Restricted shares issued 12,750         15,000          
Common Stock [Member] | Directors, Officers, and Employees [Member]                      
Class of Stock [Line Items]                      
Restricted shares issued         205,000            
Issuance of unrestricted shares 139,610               64,278    
v3.24.3
Related Party Transactions - Additional Information (Detail)
 1 Months Ended 3 Months Ended 6 Months Ended 9 Months Ended
Dec. 13, 2019
ft²
Resort
Dec. 31, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Sep. 30, 2024
USD ($)
Sep. 30, 2023
USD ($)
Dec. 31, 2019
Related Party Transaction [Line Items]                  
Operating Income (Loss)     $ 1,754,934 $ 1,167,853     $ 16,728,828 $ 14,977,778  
Accounts receivable - affiliate   $ 5,945,724 $ 3,185,999   $ 3,185,999   3,185,999    
OTH Master Agreement [Member]                  
Related Party Transaction [Line Items]                  
Operating Income (Loss)             $ 250,000    
Percentage of management fee due     2.50%   2.50%   2.50%    
Management fee of gross revenues for first full fiscal year     2.00%   2.00%   2.00%    
Management fee of gross revenues for second full fiscal year     2.25%   2.25%   2.25%    
Management fee of gross revenues for every year thereafter     2.50%   2.50%   2.50%    
Our Town Hospitality [Member]                  
Related Party Transaction [Line Items]                  
Accounts receivable - affiliate   10,000.00 $ 0.0   $ 0.0   $ 0.0    
Accounts payable - affiliate   300,000 $ 800,000   $ 800,000   $ 800,000    
Our Town Hospitality [Member] | Master Agreement [Member]                  
Related Party Transaction [Line Items]                  
Number of rental programs | Resort 2                
Andrew M. Sims [Member] | Our Town Hospitality [Member]                  
Related Party Transaction [Line Items]                  
Percentage of total outstanding ownership interests     66.40%   66.40%   66.40%    
David R. Folsom [Member] | Our Town Hospitality [Member]                  
Related Party Transaction [Line Items]                  
Percentage of total outstanding ownership interests     6.60%   6.60%   6.60%    
Andrew M. Sims Jr [Member] | Our Town Hospitality [Member]                  
Related Party Transaction [Line Items]                  
Percentage of total outstanding ownership interests     15.00%   15.00%   15.00%    
Our Town Hospitality [Member]                  
Related Party Transaction [Line Items]                  
Area of office space subleased | ft² 2,245                
Sublease term                 5 years
Additional renewal of agreement                 5 years
Lease concession amount   $ 143,774              
Lessee, operating lease, existence of option to extend [true false]             true    
Lease payments due         $ 97,766 $ 120,105      
Employee medical benefits paid     $ 1,000,000 900,000 $ 2,900,000 $ 2,300,000      
Our Town Hospitality [Member] | Master Agreement [Member]                  
Related Party Transaction [Line Items]                  
Base management fees earned by related party     1,000,000 1,000,000     $ 3,500,000 400,000  
Our Town Hospitality [Member] | OTH Master Agreement [Member]                  
Related Party Transaction [Line Items]                  
Incentive management fee equal to increase in gross operating profit percentage 10.00%                
Maximum incentive management fee of gross revenues 0.25%                
Incentive management fees expense by related party     (36,520) (31,088)     75,145 186,855  
Immediate Family Members of Chairman [Member]                  
Related Party Transaction [Line Items]                  
Total compensation for related parties     $ 145,744 $ 134,289     $ 493,374 $ 470,494  
v3.24.3
Retirement Plans - Additional Information (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Dec. 31, 2023
Dec. 29, 2016
Defined Benefit Plan Disclosure [Line Items]            
Employer contribution for first 3% of employee contributions     100.00%      
Employer contribution for next 2% of employee contributions     50.00%      
Percentage of first specified employee contributions     3.00%      
Percentage of next specified employee contributions     2.00%      
Contribution for retirement plan $ 17,040 $ 16,048 $ 77,089 $ 73,596    
Maximum amount allocated to purchase common stock under ESOP           $ 5,000,000
Total number of ESOP shares     426,153      
Fair value of ESOP released from suspense account and recognized compensation cost     $ 515,644      
Compensation cost recognized     $ 18,505 $ 38,905    
Number of non committed, unearned ESOP shares 233,059   233,059   247,043  
Fair value of unallocated ESOP shares $ 282,001   $ 282,001   $ 368,094 $ 282,001
Number of ESOP shares allocated 412,169   412,169   412,169  
Number of ESOP shares committed to be released 13,984   13,984      
Employee Stock Option            
Defined Benefit Plan Disclosure [Line Items]            
Number of common stock, shares purchased     682,500      
Purchased common stock, value     $ 4,900,000      
v3.24.3
Retirement Plans - Summary of Shares Allocations are Accounted For Fair Value on The Date of Allocations (Detail) - USD ($)
Sep. 30, 2024
Dec. 31, 2023
Dec. 29, 2016
Retirement Benefits [Abstract]      
Number of ESOP shares allocated 412,169 412,169  
Number of ESOP shares committed to be released 13,984    
Total number of ESOP allocated and committed-to-be-released 426,153 412,169  
Number of non committed, unearned ESOP shares 233,059 247,043  
Total number of ESOP Shares 659,212 659,212  
Fair value of ESOP allocated shares $ 498,724 $ 614,131  
Fair value of ESOP Committed-to-be released shares 16,920    
Total fair value of ESOP allocated and committed-to-be-released 515,644 614,131  
Fair value of ESOP unallocated shares 282,001 368,094 $ 282,001
Total fair value of ESOP shares $ 797,645 $ 982,225  
v3.24.3
Indirect Hotel Operating Expenses - Summary of Indirect Hotel Operating Expenses (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses $ 17,905,901 $ 17,372,167 $ 54,887,637 $ 52,582,080
Sales and Marketing [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 3,790,404 3,815,349 12,167,336 12,323,121
General and Administrative [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 3,829,348 3,638,354 11,388,967 11,010,177
Repairs and Maintenance [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 2,241,323 2,164,003 6,760,153 6,486,094
Utilities [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 1,720,058 1,691,931 4,718,606 4,425,479
Property Taxes [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 1,451,381 1,436,742 4,412,149 3,739,381
Management Fees, Including Incentive [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 1,003,280 973,848 3,612,691 3,584,723
Franchise Fees [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 989,802 972,610 3,301,739 3,290,490
Insurance [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 1,616,367 1,511,222 4,813,752 4,174,603
Information and Telecommunications [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses 1,016,135 931,573 2,969,245 2,799,923
Other [Member]        
Component Of Operating Cost And Expense [Line Items]        
Total indirect hotel operating expenses $ 247,803 $ 236,535 $ 742,999 $ 748,089
v3.24.3
Income Taxes - Components of Income Tax Provision (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Current:        
State $ 66,711 $ (354,398) $ 101,988 $ (322,679)
Total 66,711 (354,398) 101,988 (322,679)
Deferred:        
Federal (973,120) (1,153,452) (604,942) (1,055,628)
State (231,764) (261,180) (81,857) (115,711)
Subtotals (1,204,884) (1,414,632) (686,799) (1,171,339)
Change in deferred tax valuation allowance 1,204,884 1,414,632 686,799 1,171,339
Income tax provision (benefit) $ 66,711 $ (354,398) $ 101,988 $ (322,679)
v3.24.3
Income Taxes - Reconciliation of Statutory Federal Income Tax Provision (Benefit) (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Effective Income Tax Rate Reconciliation, Amount [Abstract]        
Statutory federal income tax provision $ (820,945) $ (508,247) $ 503,878 $ 893,903
Federal tax impact of REIT election (103,084) (421,693) (633,377) (1,264,579)
Federal impact of PPP loan forgiveness       (56,470)
State income tax benefit, net of federal provision (benefit) (214,144) (839,090) (455,312) (1,066,872)
Change in valuation allowance 1,204,884 1,414,632 686,799 1,171,339
Income tax provision (benefit) $ 66,711 $ (354,398) $ 101,988 $ (322,679)
v3.24.3
Loss Per Share and Per Unit - Computation of Basic and Diluted Net Loss Per Share (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Numerator                
Net (Loss) income $ (3,689,621) $ 4,664,232 $ 1,322,821 $ (2,065,826) $ 5,257,670 $ 1,387,514 $ 2,297,431 $ 4,579,359
Less: Net loss (income) allocated to participating share awards 41,358     28,008     (25,672) (58,032)
Net income attributable to non-controlling interest 80,173     156,558     44,140 50,720
Undeclared distributions to preferred stockholders (1,994,313)     (1,994,313)     (5,982,938) (5,982,938)
Net loss attributable to common stockholders for EPS computation $ (5,562,403)     $ (3,875,573)     $ (3,667,039) $ (1,410,891)
Denominator                
Weighted average number common shares outstanding for basic EPS computation 19,434,233     18,906,851     19,408,524 18,742,219
Weighted average number common and common equivalent shares outstanding for diluted EPS computation 19,434,233     18,906,851     19,408,524 18,742,219
Basic net loss per common share:                
Undistributed loss $ (0.29)     $ (0.2)     $ (0.19) $ (0.08)
Total basic (0.29)     (0.2)     (0.19) (0.08)
Diluted net loss per common share:                
Undistributed loss (0.29)     (0.2)     (0.19) (0.08)
Total diluted $ (0.29)     $ (0.2)     $ (0.19) $ (0.08)
v3.24.3
Loss Per Share and Per Unit - Computation of Basic and Diluted Net Loss Per Unit (Detail) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Jun. 30, 2024
Mar. 31, 2024
Sep. 30, 2023
Jun. 30, 2023
Mar. 31, 2023
Sep. 30, 2024
Sep. 30, 2023
Numerator                
Net (Loss) income $ (3,689,621) $ 4,664,232 $ 1,322,821 $ (2,065,826) $ 5,257,670 $ 1,387,514 $ 2,297,431 $ 4,579,359
Undeclared distributions to preferred stockholders $ (1,994,313)     $ (1,994,313)     $ (5,982,938) $ (5,982,938)
Basic net loss per unit:                
Undistributed loss $ (0.29)     $ (0.2)     $ (0.19) $ (0.08)
Diluted net loss per unit:                
Undistributed loss $ (0.29)     $ (0.2)     $ (0.19) $ (0.08)
Sotherly Hotels LP [Member]                
Numerator                
Net (Loss) income $ (3,689,621) $ 4,664,232 $ 1,322,821 $ (2,065,826) $ 5,257,670 $ 1,387,514 $ 2,297,431 $ 4,579,359
Less: Net loss (income) allocated to participating unit awards 41,358     28,008     (25,672) (58,032)
Undeclared distributions to preferred stockholders (1,994,313)     (1,994,313)     (5,982,938) (5,982,938)
Net loss attributable to unitholders for EPU computation $ (5,642,576)     $ (4,032,131)     $ (3,711,179) $ (1,461,611)
Denominator                
Weighted average number of units outstanding for basic EPU computation 20,004,351     19,810,991     19,994,898 19,807,797
Basic net loss per unit:                
Undistributed loss $ (0.28)     $ (0.2)     $ (0.19) $ (0.07)
Total basic (0.28)     (0.2)     (0.19) (0.07)
Diluted net loss per unit:                
Undistributed loss (0.28)     (0.2)     (0.19) (0.07)
Total diluted $ (0.28)     $ (0.2)     $ (0.19) $ (0.07)
v3.24.3
Loss Per Share and Per Unit - Additional Information (Details) - Unvested Restricted Units [Member] - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2024
Sep. 30, 2023
Sep. 30, 2024
Sep. 30, 2023
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]        
Anti-dilutive due to net losses, not included in a dilutive calculation 240,037 240,037 240,037 240,037
Sotherly Hotels LP [Member]        
Schedule Of Computation Of Basic And Diluted Earnings Per Common Share [Line Items]        
Anti-dilutive due to net losses, not included in a dilutive calculation 240,037 240,037 240,037 240,037
v3.24.3
Subsequent Events- Additional Information (Detail) - USD ($)
Oct. 28, 2024
Aug. 14, 2024
Jul. 08, 2024
May 03, 2024
Apr. 29, 2024
Subsequent Event [Line Items]          
Maturity date       May 01, 2026  
Subsequent Events [Member] | Series B Preferred Stock [Member]          
Subsequent Event [Line Items]          
Dividend paid per share $ 0.5        
Subsequent Events [Member] | Series C Preferred Stock [Member]          
Subsequent Event [Line Items]          
Dividend paid per share 0.4921875        
Subsequent Events [Member] | Series D Preferred Stock [Member]          
Subsequent Event [Line Items]          
Dividend paid per share $ 0.515625        
Double Tree by Hilton Philadelphia Airport Hotel | Mortgage Loans [Member]          
Subsequent Event [Line Items]          
Mortgage loans of principal balance         $ 35,900,000
Extended maturity date         Apr. 29, 2026
Double Tree by Hilton Philadelphia Airport Hotel | Mortgage Loans [Member] | SOFR [Member]          
Subsequent Event [Line Items]          
Excess Interest rate on mortgage debt         3.50%
DoubleTree by Hilton Jacksonville Riverfront Hotel [Member] | Mortgage Loans [Member]          
Subsequent Event [Line Items]          
Mortgage loans of principal balance     $ 26,250,000    
Mortgage loan additional product improvement plan     9,490,000    
Debt instrument periodic payment     $ 38,700    
Extended maturity date     Jul. 08, 2029    
DoubleTree by Hilton Jacksonville Riverfront Hotel [Member] | Mortgage Loans [Member] | SOFR [Member]          
Subsequent Event [Line Items]          
Excess Interest rate on mortgage debt     3.00%    
Desoto Hotel | Mortgage Loans [Member]          
Subsequent Event [Line Items]          
Mortgage loans of principal balance   $ 5,000,000      
Mortgage loans maturity term   25 years      
Maturity date   Jul. 01, 2026      
Interest rate of mortgage loan   7.50%