v3.26.1
Debt
 12 Months Ended
Dec. 31, 2025
Debt Disclosure [Abstract]  
Debt

4. Debt

Mortgage Loans, Net. As of December 31, 2025 and 2024, the Company had approximately $315.2 million and approximately $316.5 million of outstanding mortgage debt, respectively. The following table sets forth our mortgage debt obligations on our hotels.

 

 

 

Balance Outstanding as of

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

Prepayment

 

Maturity

 

Amortization

 

Interest

Property

2025

 

 

2024

 

 

Penalties

 

Date

 

Provisions

 

Rate

The DeSoto (1)

$

42,000,000

 

 

$

34,219,589

 

 

Yes

 

10/06/2030

 

(1)

 

7.130%

DoubleTree by Hilton Jacksonville
   Riverfront (2)

 

25,592,100

 

 

 

26,056,500

 

 

None

 

07/08/2029

 

25 years

 

SOFR plus 3.00%

DoubleTree by Hilton Laurel (3)

 

10,000,000

 

 

 

10,000,000

 

 

(3)

 

05/06/2028

 

(3)

 

7.350%

DoubleTree by Hilton Philadelphia Airport (4)

 

35,915,488

 

 

 

35,915,488

 

 

None

 

04/29/2026

 

(4)

 

SOFR plus 3.50%

DoubleTree Resort by Hilton Hollywood
   Beach (5)

 

48,966,397

 

 

 

50,211,533

 

 

None

 

(5)

 

30 years

 

4.913%

Georgian Terrace (6)

 

33,469,112

 

 

 

38,375,095

 

 

None

 

06/01/2026

 

30 years

 

4.42% (6)

Hotel Alba Tampa, Tapestry Collection by Hilton (7)

 

35,000,000

 

 

 

35,000,000

 

 

(7)

 

03/06/2029

 

(7)

 

8.490%

Hotel Ballast Wilmington, Tapestry Collection by
   Hilton (8)

 

28,742,014

 

 

 

29,770,045

 

 

Yes

 

01/01/2027

 

25 years

 

4.250%

Hyatt Centric Arlington (9)

 

44,118,386

 

 

 

45,317,273

 

 

Yes

 

10/01/2028

 

30 years

 

5.250%

The Whitehall (10)

 

13,486,401

 

 

 

13,777,078

 

 

None

 

02/26/2028

 

25 years

 

PRIME plus 1.25%

Total Mortgage Principal Balance

$

317,289,898

 

 

$

318,642,601

 

 

 

 

 

 

 

 

 

Deferred financing costs, net

 

(2,090,036

)

 

 

(2,144,656

)

 

 

 

 

 

 

 

 

Unamortized premium on loan

 

—

 

 

 

18,203

 

 

 

 

 

 

 

 

 

Total Mortgage Loans, Net

$

315,199,862

 

 

$

316,516,148

 

 

 

 

 

 

 

 

 

 

 

(1)

The note requires payments of interest only and cannot be prepaid without penalty until the last four months of the loan term.

(2)

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.

(3)

The note requires payments of interest only and cannot be prepaid without penalty until the last four months of the loan term.

(4)

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.

(5)

The note matured on October 1, 2025 and went into default. The Company subsequently entered into discussion with the special servicer for an extension.

(6)

The note matured on June 1, 2025 and went into default. On December 16, 2025, obtained a 1-year extension to June 1, 2026. Principal and interest are payable monthly, with default interest accruing through the maturity date.

(7)

The note requires payments of interest only and cannot be prepaid without penalty until the last four months of the term.

(8)

The note amortizes on a 25-year schedule after an initial interest-only period of one year and cannot be prepaid without penalty until the last four months of the loan term.

(9)

The note cannot be prepaid without penalty until the final four months of the term.

(10)

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

 

As of December 31, 2025, 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 (i) a payment at maturity default on the non-recourse mortgage on the Georgian Terrace; (2) a payment at maturity default on the mortgage the on the DoubleTree Resort by Hilton Hollywood Beach ; and (iii) a covenant default on the mortgage on the DoubleTree by Hilton Jacksonville Riverfront. If we are unable to obtain a waiver for the covenant default, we may be required to provide cash collateral or reduce the outstanding indebtedness by approximately $4.9 million.

 

Please refer to Note 16, Subsequent Events, for details regarding the refinance of the mortgages in the table above with the exception of the mortgage on the DeSoto.

Total future mortgage debt maturities, including with respect to any extensions of loan maturity, as of December 31, 2025 were as follows:

 

December 31, 2026

$

121,488,754

 

December 31, 2027

 

29,830,958

 

December 31, 2028

 

64,771,286

 

December 31, 2029

 

59,198,900

 

December 31, 2030

 

42,000,000

 

Total future maturities

$

317,289,898

 

 

Unsecured Notes. The Operating Partnership and certain of its subsidiaries 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 to extend the term to five years, if not forgiven, and carries an interest rate of 1.00%. Equal payments of principal and interest were required to begin no later than 10 months following origination of the loan and were to be 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 contained customary events of default relating to, among other things, payment defaults and breach of the representations and warranties or of provision of the relevant promissory note.

 

Under the terms of the CARES Act, each borrower could apply for and be granted forgiveness for all or a portion of the PPP Loan. During the years ended December 31, 2025, 2024, and 2023, the Company received principal debt forgiveness totaling approximately $0.0, $0.0 and $0.3 million, respectively.

 

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 made monthly payments of $18,000 through December 25, 2025 to fully extinguish the loan.

 

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 made monthly payments of $56,809 through July 1, 2025 to fully 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 made monthly payments of $13,402 through May 6, 2025 to fully extinguish the loan.

 

Revolving Line of Credit. In connection with the Merger Agreement, on October 24, 2025, the Operating Partnership entered into a Note KWHP providing for a revolving line of credit in the principal amount of up to $25.0 million. Interest accrues on the Note

at a floating rate equal to Term SOFR plus an applicable margin, initially 3.25% for nine months, then 7.50%, with a 3.35% SOFR floor. Interest is payable monthly and at maturity. Mandatory prepayments are required from asset sale or refinancing proceeds, and certain asset sales are restricted unless minimum proceeds are received. Each such prepayment permanently reduces the amount of the Revolving Commitment.

 

As of December 31, 2025, the outstanding balance on the revolving line of credit was $7.5 million.