|
þ
|
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
For the fiscal year ended December 31,
2015
|
|
|
|
or
|
||
|
|
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
For the transition period from
to
|
Maryland
|
|
46-5765413
|
(State of incorporation)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
50 Rockefeller Plaza
|
|
|
New York, New York
|
|
10020
|
(Address of principal executive office)
|
|
(Zip Code)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
þ
|
Smaller reporting company
o
|
|
(Do not check if a smaller reporting company)
|
|
|
|
|
Page
|
PART I
|
|
|
|
|
Item 1.
|
||
|
Item 1A.
|
||
|
Item 1B.
|
||
|
Item 2.
|
||
|
Item 3.
|
||
|
Item 4.
|
||
PART II
|
|
|
|
|
Item 5.
|
||
|
Item 6.
|
||
|
Item 7.
|
||
|
Item 7A.
|
||
|
Item 8.
|
||
|
Item 9.
|
||
|
Item 9A.
|
||
|
Item 9B.
|
||
PART III
|
|
|
|
|
Item 10.
|
||
|
Item 11.
|
||
|
Item 12.
|
||
|
Item 13.
|
||
|
Item 14.
|
||
PART IV
|
|
|
|
|
Item 15.
|
||
|
•
|
to provide stockholders with current income in the form of quarterly distributions; and
|
•
|
to increase the value of our portfolio in order to generate long-term capital appreciation.
|
•
|
An investment model that incorporates a diversified lodging portfolio provides the potential to generate attractive risk adjusted returns across economic cycles while mitigating the risks associated with any one geographic or lodging segment.
|
•
|
Our investment model should benefit from the continuing improvement in lodging industry fundamentals.
|
•
|
A lodging-centric investment strategy provides an opportunity for attractive returns and long-term growth in value, as well as a potentially effective inflation hedge.
|
•
|
As compared with certain other types of real estate assets, the lodging sector provides a broad range of value creation opportunities that can enhance returns.
|
•
|
We will deploy a differentiated investment approach.
|
•
|
Our investment strategy, resources and investment structure differentiate us from other sources of capital for the real estate industry.
|
•
|
competition with CWI 1, which has recently raised funds and has similar investment objectives to us, for the time and attention of the advisor and subadvisor;
|
•
|
competition with CWI 1 for investment opportunities and financing opportunities, and the allocation of investments that are suitable for CWI 1 and CWI 2;
|
•
|
competition with CPA
®
:17 - Global and CPA
®
:18 - Global, and in particular CCIF, which is also still raising funds, as well as future entities managed by W. P. Carey for the time and attention of the advisor;
|
•
|
the receipt of compensation by our advisor and subadvisor for acquisitions of investments, leases, sales and financing for us, which may cause our advisor to engage in transactions that generate higher fees, rather than transactions that are more appropriate or beneficial for our business;
|
•
|
agreements between us and our advisor, and between the advisor and subadvisor, including agreements regarding compensation, will not be negotiated on an arm’s-length basis as would occur if the agreements were with unaffiliated third parties;
|
•
|
acquisitions of single assets or portfolios of assets from affiliates, including WPC, CWI 1 and/or the CPA
®
REITs, subject to our investment policies and procedures, which may take the form of a direct purchase of assets, a merger or another type of transaction;
|
•
|
a decision by our advisor’s asset operating committee (on our behalf) of whether to hold or sell an asset. This decision could impact the timing and amount of fees payable to our advisor and subadvisor as well as allocations and distributions payable to Carey Watermark Holdings 2 pursuant to its special general partner interest. On the one hand, our advisor receives asset management fees and may decide not to sell an asset. On the other hand, the advisor receives disposition fees and Carey Watermark Holdings 2 will be entitled to certain profit allocations and cash distributions based upon sales of assets as a result of its operating partnership profits interest, and the subadvisor will share in certain of those fees and distributions;
|
•
|
potential business combination transactions, including mergers, with W. P. Carey, Watermark Capital Partners or entities managed by them;
|
•
|
decisions regarding liquidity events, which may entitle our advisor, subadvisor and their affiliates to receive additional fees and distributions in respect of the liquidations;
|
•
|
a recommendation by our advisor that we declare distributions at a particular rate because our advisor and Carey Watermark Holdings 2 may begin collecting subordinated fees once the applicable preferred return rate has been met;
|
•
|
disposition fees based on the sale price of assets and interests in disposition proceeds based on net cash proceeds from sale, exchange or other disposition of assets may cause a conflict between the advisor’s desire to sell an asset and our plans to hold or sell the asset; and
|
•
|
the termination of the advisory agreement and other agreements with our advisor, subadvisor and their affiliates.
|
•
|
it is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or
|
•
|
it owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which is referred to as the ‘‘40% test.’’
|
•
|
changes in the general economic climate;
|
•
|
changes in local conditions, such as an oversupply of hotel rooms or a reduction in demand for hotel rooms;
|
•
|
changes in traffic patterns and neighborhood characteristics;
|
•
|
increases in the cost of property insurance;
|
•
|
changes in interest rates and the availability of financing; and
|
•
|
changes in laws and governmental regulations, including those governing real estate usage, zoning and taxes.
|
•
|
inability to agree on a favorable price;
|
•
|
inability to agree on favorable terms;
|
•
|
restrictions imposed by third parties, such as an inability to transfer franchise or management agreements;
|
•
|
lender restrictions;
|
•
|
environmental issues; and/or
|
•
|
property condition.
|
•
|
responsibility and liability for the costs of investigation and removal or remediation of hazardous substances released on or in real property, generally without regard to knowledge of or responsibility for the presence of the contaminants;
|
•
|
liability for claims by third parties based on damages to natural resources or property, personal injuries, or costs of removal or remediation of hazardous or toxic substances in, on, or migrating from our property; and
|
•
|
responsibility for managing asbestos-containing building materials, and third-party claims for exposure to those materials.
|
•
|
competition from other hotel properties or lodging facilities in our markets;
|
•
|
over-building of hotels in our markets, which would adversely affect occupancy and revenues at the hotels we acquire;
|
•
|
dependence on business and commercial travelers and tourism;
|
•
|
increases in energy costs and other expenses affecting travel, which may affect travel patterns and reduce the number of business and commercial travelers and tourists;
|
•
|
increases in operating costs due to inflation and other factors that may not be offset by increased room rates;
|
•
|
changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance with laws and regulations, fiscal policies and ordinances;
|
•
|
adverse effects of international, national, regional and local economic and market conditions;
|
•
|
unforeseen events beyond our control, such as terrorist attacks, travel related health concerns (including pandemics and epidemics), political instability, regional hostilities, imposition of taxes or surcharges by regulatory authorities, travel related accidents and unusual weather patterns (including natural disasters such as hurricanes, tsunamis or earthquakes);
|
•
|
adverse effects of a downturn in the lodging industry; and
|
•
|
risks generally associated with the ownership of hotel properties and real estate, as discussed in other risk factors.
|
•
|
wage and benefit costs;
|
•
|
repair and maintenance expenses;
|
•
|
employee liabilities;
|
•
|
energy costs;
|
•
|
property taxes;
|
•
|
insurance costs; and
|
•
|
other operating expenses.
|
•
|
any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our outstanding voting stock, referred to as an interested stockholder;
|
•
|
an affiliate or associate who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding stock, also referred to as an interested stockholder; or
|
•
|
an affiliate of an interested stockholder.
|
Hotels
|
|
State
|
|
Number
of Rooms
|
|
% Owned
|
|
Acquisition Date
|
|
Hotel Type
|
|
Renovation Status at
December 31, 2015
|
Consolidated Hotels
|
|
|
|
|
|
|
|
|
|
|
|
|
Marriott Sawgrass Golf Resort & Spa
(a)
|
|
FL
|
|
511
|
|
50%
|
|
4/1/2015
|
|
Resort
|
|
In Progress
|
Courtyard Nashville Downtown
|
|
TN
|
|
192
|
|
100%
|
|
5/1/2015
|
|
Select-Service
|
|
In Progress
|
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
|
CO
|
|
403
|
|
100%
|
|
11/4/2015
|
|
Full-Service
|
|
Planned future
|
|
|
|
|
1,106
|
|
|
|
|
|
|
|
|
Unconsolidated Hotel
|
|
|
|
|
|
|
|
|
|
|
|
|
Ritz-Carlton Key Biscayne
(b)
|
|
FL
|
|
480
|
|
19.3%
|
|
5/29/2015
|
|
Resort
|
|
Planned future
|
|
|
|
|
1,586
|
|
|
|
|
|
|
|
|
(a)
|
The remaining 50% interest in this venture is owned by CWI 1.
|
(b)
|
A 47.4% interest in this venture is owned by CWI 1. The remaining 33.3% interest is retained by the original owner. The number of rooms presented includes
178
condo-hotel units that participate in the resort rental program.
|
|
Year Ended December 31, 2015
(a)
|
||||||
|
Class A
(b)
|
|
Class T
(c)
|
||||
First quarter
|
$
|
—
|
|
|
$
|
—
|
|
Second quarter
|
0.0775
|
|
|
0.0653
|
|
||
Third quarter
|
0.1500
|
|
|
0.1264
|
|
||
Fourth quarter
|
0.1500
|
|
|
0.1264
|
|
||
|
$
|
0.3775
|
|
|
$
|
0.3181
|
|
(a)
|
We did not admit shareholders until May 15, 2015; therefore, no dividends were paid prior to this date.
|
(b)
|
For the second, third and fourth quarters of
2015
,
$0.0129
,
$0.0250
and
$0.0250
of the distribution was payable in shares of our Class A common stock, respectively. Distributions paid in common stock are not included in the determination of 90% of distributable REIT net taxable income.
|
(c)
|
For the second, third and fourth quarters of
2015
,
$0.0122
,
$0.0236
and
$0.0236
of the distribution was payable in shares of our Class T common stock, respectively. Distributions paid in common stock are not included in the determination of 90% of distributable REIT net taxable income.
|
|
Common Stock
|
|
|
||||||||
|
Class A
|
|
Class T
|
|
Total
|
||||||
Shares registered
(a)
|
56,000,000
|
|
|
88,888,889
|
|
|
144,888,889
|
|
|||
Aggregate price of offering amount registered
(a)
|
$
|
560,000
|
|
|
$
|
840,000
|
|
|
$
|
1,400,000
|
|
Shares sold
(b)
|
10,642,045
|
|
|
14,947,718
|
|
|
25,589,763
|
|
|||
Aggregated offering price of amount sold
|
$
|
105,745
|
|
|
$
|
141,230
|
|
|
$
|
246,975
|
|
Direct or indirect payments to our advisor including directors, officers, general partners of the issuer or their associates; to persons owning ten percent or more of any class of equity securities of the issuer; and to affiliates of the issuer
|
(7,299
|
)
|
|
(3,524
|
)
|
|
(10,823
|
)
|
|||
Direct or indirect payments to broker-dealers
|
(3,148
|
)
|
|
(3,885
|
)
|
|
(7,033
|
)
|
|||
Net offering proceeds to the issuer after deducting expenses
|
$
|
95,298
|
|
|
$
|
133,821
|
|
|
229,119
|
|
|
Purchases of real estate related assets, net of financing costs and contributions from noncontrolling interest
|
|
|
|
|
(112,239
|
)
|
|||||
Proceeds from note payable to affiliate
|
|
|
|
|
102,447
|
|
|||||
Repayment of note payable to affiliate
|
|
|
|
|
(102,447
|
)
|
|||||
Purchase of equity interest
|
|
|
|
|
(37,559
|
)
|
|||||
Acquisition costs expensed
|
|
|
|
|
(13,133
|
)
|
|||||
Working capital
|
|
|
|
|
(9,522
|
)
|
|||||
Net deposits for hotel investments
|
|
|
|
|
(5,541
|
)
|
|||||
Cash distribution paid to stockholders
|
|
|
|
|
(44
|
)
|
|||||
Temporary investments in cash and cash equivalents
|
|
|
|
|
$
|
51,081
|
|
(a)
|
These amounts are based on the assumption that the shares sold in our initial public offering will be composed of
40%
Class A common stock and
60%
Class T common stock, which represents the approximate composition at
December 31, 2015
.
|
(b)
|
Excludes Class A shares issued to affiliates, including our advisor, and Class A and Class T shares issued pursuant to our DRIP.
|
|
|
|
|
Inception
|
||||
|
|
|
|
(May 22, 2014)
|
||||
|
|
Year Ended
|
|
through
|
||||
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Operating Data
(a)
|
|
|
|
|
||||
Total revenues
|
|
$
|
49,085
|
|
|
$
|
—
|
|
Acquisition-related expenses
|
|
13,133
|
|
|
—
|
|
||
Net loss
|
|
(12,063
|
)
|
|
(108
|
)
|
||
Income attributable to noncontrolling interests
|
|
(471
|
)
|
|
—
|
|
||
Net loss attributable to CWI stockholders
|
|
(12,534
|
)
|
|
(108
|
)
|
||
|
|
|
|
|
||||
Basic and diluted loss per share:
|
|
|
|
|
||||
Net loss attributable to CWI stockholders - Class A Common Stock
|
|
(2.18
|
)
|
|
(1.40
|
)
|
||
Net loss attributable to CWI stockholders - Class T Common Stock
|
|
(2.18
|
)
|
|
—
|
|
||
|
|
|
|
|
||||
Distributions declared per share - Class A Common Stock
(b)
|
|
0.3775
|
|
|
—
|
|
||
Distributions declared per share - Class T Common Stock
(c)
|
|
0.3181
|
|
|
—
|
|
||
Balance Sheet Data
|
|
|
|
|
||||
Total assets
|
|
$
|
479,791
|
|
|
$
|
200
|
|
Net investments in real estate
(d)
|
|
396,864
|
|
|
—
|
|
||
Non-recourse debt
|
|
208,700
|
|
|
—
|
|
||
Due to related parties and affiliates
(e)
|
|
4,985
|
|
|
108
|
|
||
Other Information
|
|
|
|
|
|
|
||
Net cash used in operating activities
|
|
$
|
(3,553
|
)
|
|
$
|
—
|
|
Cash distributions paid
|
|
621
|
|
|
—
|
|
||
Supplemental Financial Measures
|
|
|
|
|
||||
FFO
|
|
$
|
(8,354
|
)
|
|
N/A
|
|
|
MFFO
|
|
4,779
|
|
|
N/A
|
|
||
Consolidated Hotel Operating Statistics
(f)
|
|
|
|
|
||||
Occupancy
|
|
71.8
|
%
|
|
N/A
|
|
||
ADR
|
|
$
|
181.86
|
|
|
N/A
|
|
|
RevPAR
|
|
$
|
130.48
|
|
|
N/A
|
|
(a)
|
We acquired our first hotel in April 2015.
|
(b)
|
For the second, third and fourth quarters of 2015,
$0.0129
,
$0.0250
and
$0.0250
of the distribution was payable in shares of our Class A common stock.
|
(c)
|
For the second, third and fourth quarters of 2015,
$0.0122
,
$0.0236
and
$0.0236
was payable in shares of our Class T common stock.
|
(d)
|
Net investments in real estate consist of Net investments in hotels and Equity investment in real estate.
|
(e)
|
Amounts due to related parties and affiliates do not include accumulated organization and offering costs incurred by our advisor in excess of 4% of the gross proceeds from the offering and distribution reinvestment plan if the gross proceeds are less than $500.0 million, 2% of the gross proceeds from the offering if the gross proceeds are $500.0 million or more but less than $750.0 million, and 1.5% of the gross proceeds from the offering if the gross proceeds are $750.0 million or more (
Note 3
). Through December 31, 2015, our advisor incurred organization and offering costs on our behalf of approximately
$4.7 million
, all of which we were obligated to pay. Unpaid costs of
$0.5 million
were included in Due to affiliates in the consolidated financial statements at December 31, 2015.
|
(f)
|
Represents statistical data for our Consolidated Hotels during our ownership period.
|
•
|
For taxable years beginning after December 31, 2017, the PATH Act reduces the limit for which the value of our assets may consist of stock or securities of one or more TRSs to 20% from 25%.
|
•
|
For distributions made in taxable years beginning after December 31, 2014, the preferential dividend rules no longer apply to publicly-offered REITs. A dividend is preferential unless it is distributed pro rata, with no preference to any share of stock compared to other shares of the same class of stock.
|
•
|
Effective for taxable years beginning after December 31, 2015, the PATH Act conforms tax deductibility with deductibility for computing “earnings and profits.” A REIT’s current earnings and profits are not reduced by any amount unless the REIT can deduct such amount from its current year’s taxable income.
|
•
|
Effective for taxable years beginning after December 31, 2015, the PATH Act expands the safe harbor that allows a REIT to sell property with an aggregate tax basis or fair market value up to 20% of its aggregate tax basis, or fair market value, as compared to 10% previously. REITs may be subject to a prohibited transaction tax if the REIT engages in frequent property sales. A safe-harbor applies if, among other requirements, the tax basis or fair market value of the property sold by the REIT in any given year does not exceed 10% of the aggregate tax basis, or aggregate fair market values of all of the REIT assets as of the beginning of the year.
|
•
|
The PATH Act extends the deductibility of “bonus depreciation” until December 31, 2019. The tax deduction for bonus depreciation pertains to all businesses, which are permitted to immediately deduct 50 percent of certain investment costs.
|
•
|
Effective for taxable years beginning after December 31, 2015, the PATH Act permanently extends the 15-year straight-line cost recovery period for qualified leasehold improvements, which had previously ended on December 31, 2014. Without the qualification, the tax deductible recovery period for leasehold improvements is up to 39 years.
|
•
|
For tax years beginning after December 31, 2015, the PATH Act expands the treatment of REIT hedges to include income from hedges of previously acquired hedges that a REIT entered into to manage risk associated with liabilities or properties that have been extinguished or disposed of.
|
|
|
|
|
Inception
|
||||
|
|
|
|
(May 22, 2014)
|
||||
|
|
Year Ended
|
|
through
|
||||
|
|
December 31, 2015
|
|
December 31, 2014
(a)
|
||||
Hotel revenues
|
|
$
|
49,085
|
|
|
$
|
—
|
|
Acquisition-related expenses
|
|
13,133
|
|
|
—
|
|
||
Net loss attributable to CWI 2 stockholders
|
|
(12,534
|
)
|
|
(108
|
)
|
||
|
|
|
|
|
||||
Cash distributions paid
|
|
621
|
|
|
—
|
|
||
|
|
|
|
|
||||
Net cash used in operating activities
|
|
(3,553
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
|
(342,451
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
|
396,885
|
|
|
200
|
|
||
|
|
|
|
|
||||
Supplemental Financial Measures:
(b)
|
|
|
|
|
||||
FFO attributable to CWI 2 stockholders
|
|
(8,354
|
)
|
|
N/A
|
|
||
MFFO attributable to CWI 2 stockholders
|
|
4,779
|
|
|
N/A
|
|
||
|
|
|
|
|
||||
Consolidated Hotel Operating Statistics
|
|
|
|
|
||||
Occupancy
|
|
71.8
|
%
|
|
N/A
|
|
||
ADR
|
|
$
|
181.86
|
|
|
N/A
|
|
|
RevPAR
|
|
130.48
|
|
|
N/A
|
|
(a)
|
We acquired our first Consolidated Hotel in April 2015; therefore, we have limited financial and operating data for the period.
|
(b)
|
We consider the performance metrics listed above, including FFO and MFFO, which are non-GAAP measures, to be important measures in the evaluation of our results of operations, liquidity and capital resources. We evaluate our results of operations with a primary focus on the ability to generate cash flow necessary to meet our objective of funding distributions to stockholders. See
Supplemental Financial Measures
below for our definitions of these non-GAAP measures and reconciliations to their most directly comparable GAAP measures.
|
Hotels
|
|
State
|
|
Number
of Rooms
|
|
% Owned
|
|
Our
Initial
Investment
|
|
Acquisition Date
|
|
Hotel Type
|
|
Renovation Status at
December 31, 2015
|
||
Consolidated Hotels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Marriott Sawgrass Golf Resort & Spa
(a)
|
|
FL
|
|
511
|
|
50%
|
|
$
|
24,764
|
|
|
4/1/2015
|
|
Resort
|
|
In Progress
|
Courtyard Nashville Downtown
|
|
TN
|
|
192
|
|
100%
|
|
58,498
|
|
|
5/1/2015
|
|
Select-Service
|
|
In Progress
|
|
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
|
CO
|
|
403
|
|
100%
|
|
168,809
|
|
|
11/4/2015
|
|
Full-Service
|
|
Planned future
|
|
|
|
|
|
1,106
|
|
|
|
$
|
252,071
|
|
|
|
|
|
|
|
Unconsolidated Hotel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Ritz-Carlton Key Biscayne
(b)
|
|
FL
|
|
480
|
|
19.3%
|
|
$
|
37,559
|
|
|
5/29/2015
|
|
Resort
|
|
Planned future
|
(a)
|
The remaining 50% interest in this venture is owned by CWI 1.
|
(b)
|
A 47.4% interest in this venture is owned by CWI 1. The remaining 33.3% interest is retained by the original owner. The number of rooms presented includes
178
condo-hotel units that participate in the resort rental program.
|
|
|
|
|
Inception
|
|
|
||||||
|
|
|
|
(May 22, 2014)
|
|
|
||||||
|
|
Year Ended
|
|
through
|
|
|
||||||
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Change
|
||||||
Hotel Revenues
|
|
$
|
49,085
|
|
|
$
|
—
|
|
|
$
|
49,085
|
|
|
|
|
|
|
|
|
||||||
Hotel Expenses
|
|
42,050
|
|
|
—
|
|
|
42,050
|
|
|||
|
|
|
|
|
|
|
||||||
Other Operating Expenses
|
|
|
|
|
|
|
||||||
Acquisition-related expenses
|
|
13,133
|
|
|
—
|
|
|
13,133
|
|
|||
Corporate general and administrative expenses
|
|
2,302
|
|
|
108
|
|
|
2,194
|
|
|||
Asset management fees to affiliate and other
|
|
1,152
|
|
|
—
|
|
|
1,152
|
|
|||
|
|
16,587
|
|
|
108
|
|
|
16,479
|
|
|||
|
|
|
|
|
|
|
||||||
Operating Loss
|
|
(9,552
|
)
|
|
(108
|
)
|
|
(9,444
|
)
|
|||
|
|
|
|
|
|
|
||||||
Other Income and (Expenses)
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(4,368
|
)
|
|
—
|
|
|
(4,368
|
)
|
|||
Equity in earnings of equity method investment in real estate
|
|
1,846
|
|
|
—
|
|
|
1,846
|
|
|||
Other income and (expenses)
|
|
83
|
|
|
—
|
|
|
83
|
|
|||
|
|
(2,439
|
)
|
|
—
|
|
|
(2,439
|
)
|
|||
|
|
|
|
|
|
|
||||||
Loss from Operations Before Income Taxes
|
|
(11,991
|
)
|
|
(108
|
)
|
|
(11,883
|
)
|
|||
Provision for income taxes
|
|
(72
|
)
|
|
—
|
|
|
(72
|
)
|
|||
Net Loss
|
|
(12,063
|
)
|
|
(108
|
)
|
|
(11,955
|
)
|
|||
Income attributable to noncontrolling interests
|
|
(471
|
)
|
|
—
|
|
|
(471
|
)
|
|||
Net Loss Attributable to CWI 2 Stockholders
|
|
$
|
(12,534
|
)
|
|
$
|
(108
|
)
|
|
$
|
(12,426
|
)
|
|
|
Year Ended December 31, 2015
|
||||||||||
|
|
Marriott Sawgrass Golf Resort & Spa
|
|
Courtyard Nashville Downtown
|
|
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
||||||
Hotel Revenues
|
|
|
|
|
|
|
||||||
Room
|
|
$
|
15,409
|
|
|
$
|
9,468
|
|
|
$
|
2,647
|
|
Food and beverage
|
|
13,995
|
|
|
644
|
|
|
682
|
|
|||
Other operating revenue
|
|
5,524
|
|
|
425
|
|
|
291
|
|
|||
|
|
$
|
34,928
|
|
|
$
|
10,537
|
|
|
$
|
3,620
|
|
|
|
Year Ended December 31, 2015
|
||||||||||
|
|
Marriott Sawgrass Golf Resort & Spa
|
|
Courtyard Nashville Downtown
|
|
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
||||||
Hotel expenses
|
|
$
|
32,793
|
|
|
$
|
6,246
|
|
|
$
|
3,011
|
|
|
|
Funds Raised
|
||||||||||
Period
|
|
Class A
|
|
Class T
|
|
Total
|
||||||
From Inception to May 31, 2015
|
|
$
|
2,859
|
|
|
$
|
827
|
|
|
$
|
3,686
|
|
June 2015
|
|
5,121
|
|
|
8,156
|
|
|
13,277
|
|
|||
July 2015
|
|
8,277
|
|
|
9,175
|
|
|
17,452
|
|
|||
August 2015
|
|
12,122
|
|
|
13,986
|
|
|
26,108
|
|
|||
September 2015
|
|
12,450
|
|
|
19,485
|
|
|
31,935
|
|
|||
October 2015
|
|
15,771
|
|
|
22,306
|
|
|
38,077
|
|
|||
November 2015
|
|
16,419
|
|
|
24,662
|
|
|
41,081
|
|
|||
December 2015
|
|
32,726
|
|
|
42,633
|
|
|
75,359
|
|
|||
January 2016
|
|
16,786
|
|
|
27,504
|
|
|
44,290
|
|
|||
February 2016
|
|
31,596
|
|
|
48,583
|
|
|
80,179
|
|
|||
|
|
$
|
154,127
|
|
|
$
|
217,317
|
|
|
$
|
371,444
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Carrying Value
|
|
|
|
||||
Fixed rate
|
$
|
100,000
|
|
|
$
|
—
|
|
Variable rate
(a)
|
108,700
|
|
|
—
|
|
||
|
$
|
208,700
|
|
|
$
|
—
|
|
Percent of Total Debt
|
|
|
|
||||
Fixed rate
|
48
|
%
|
|
—
|
%
|
||
Variable rate
|
52
|
%
|
|
—
|
%
|
||
|
100
|
%
|
|
—
|
%
|
||
Weighted-Average Interest Rate at End of Year
|
|
|
|
||||
Fixed rate
|
3.9
|
%
|
|
—
|
%
|
||
Variable rate
(b)
|
3.8
|
%
|
|
—
|
%
|
(a)
|
At
December 31, 2015
, all our outstanding variable rate debt was subject to interest rate caps.
|
(b)
|
The impact of our derivative instruments are reflected in the weighted-average interest rates.
|
|
Total
|
|
Less than
1 year
|
|
1-3 years
|
|
3-5 years
|
|
More than
5 years
|
||||||||||
Non-recourse debt — Principal
|
$
|
208,700
|
|
|
$
|
—
|
|
|
$
|
1,600
|
|
|
$
|
110,755
|
|
|
$
|
96,345
|
|
Interest on borrowings
(a)
|
42,415
|
|
|
8,126
|
|
|
16,175
|
|
|
10,745
|
|
|
7,369
|
|
|||||
Contractual capital commitments
(b)
|
22,710
|
|
|
20,460
|
|
|
2,250
|
|
|
—
|
|
|
—
|
|
|||||
Due to Carey Financial
(c)
|
2,407
|
|
|
1,377
|
|
|
1,030
|
|
|
—
|
|
|
—
|
|
|||||
Due to advisor
(d)
|
454
|
|
|
363
|
|
|
91
|
|
|
—
|
|
|
—
|
|
|||||
Lease commitments
(e)
|
193
|
|
|
38
|
|
|
76
|
|
|
76
|
|
|
3
|
|
|||||
|
$
|
276,879
|
|
|
$
|
30,364
|
|
|
$
|
21,222
|
|
|
$
|
121,576
|
|
|
$
|
103,717
|
|
(a)
|
For variable-rate debt, interest on borrowings is calculated using the capped interest rate, when in effect.
|
(b)
|
Capital commitments represent our remaining contractual renovation commitments at our Consolidated Hotels.
|
(c)
|
Represents the estimated liability for the present value of the remaining distribution and shareholder servicing fee payable to Carey Financial (
Note 3
).
|
(d)
|
Represents amounts advanced by our advisor for organization and offering costs subject to limitations under the advisory agreement (
Note 3
).
|
(e)
|
Lease commitments consist of our share of future rents payable pursuant to the advisory agreement for the purpose of leasing office space used for the administration of real estate entities.
|
|
|
Year Ended December 31, 2015
|
||
Net loss attributable to CWI 2 stockholders
|
|
$
|
(12,534
|
)
|
Adjustments:
|
|
|
||
Depreciation and amortization of real property
|
|
5,994
|
|
|
Proportionate share of adjustments for partially-owned entities — FFO adjustments
|
|
(1,814
|
)
|
|
Total adjustments
|
|
4,180
|
|
|
FFO attributable to CWI 2 stockholders — as defined by NAREIT
|
|
(8,354
|
)
|
|
Acquisition expenses
(a)
|
|
13,133
|
|
|
Above-market parking garage lease amortization, net
|
|
(60
|
)
|
|
Realized loss on derivative instrument
|
|
30
|
|
|
Proportionate share of adjustments for partially owned entities — MFFO adjustments
|
|
30
|
|
|
Total adjustments
|
|
13,133
|
|
|
MFFO attributable to CWI 2 stockholders
|
|
$
|
4,779
|
|
(a)
|
In evaluating investments in real estate, management differentiates the costs to acquire the investment from the operations derived from the investment. Such information would be comparable only for non-listed REITs that have completed their acquisition activity and have other similar operating characteristics. By excluding expensed acquisition costs, management believes MFFO provides useful supplemental information that is comparable for each type of real estate investment and is consistent with management
’
s analysis of the investing and operating performance of our properties. Acquisition fees and expenses include payments to our advisor or third parties. Acquisition fees and expenses under GAAP are considered operating expenses and as expenses included in the determination of net income and income from continuing operations, both of which are performance measures under GAAP. All paid and accrued acquisition fees and expenses will have negative effects on returns to investors, the potential for future distributions, and cash flows generated by us, unless earnings from operations or net sales proceeds from the disposition of properties are generated to cover the purchase price of the property, these fees and expenses and other costs related to the property.
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Fixed-rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,792
|
|
|
$
|
1,863
|
|
|
$
|
96,345
|
|
|
$
|
100,000
|
|
|
$
|
100,000
|
|
Variable-rate debt
|
$
|
—
|
|
|
$
|
640
|
|
|
$
|
960
|
|
|
$
|
107,100
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
108,700
|
|
|
$
|
109,440
|
|
TABLE OF CONTENTS
|
Page No.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Investments in real estate:
|
|
|
|
||||
Hotels, at cost
|
$
|
364,624
|
|
|
$
|
—
|
|
Accumulated depreciation
|
(5,359
|
)
|
|
—
|
|
||
Net investments in hotels
|
359,265
|
|
|
—
|
|
||
Equity investment in real estate
|
37,599
|
|
|
—
|
|
||
Cash
|
51,081
|
|
|
200
|
|
||
Restricted cash
|
11,741
|
|
|
—
|
|
||
Accounts receivable
|
4,676
|
|
|
—
|
|
||
Other assets
|
15,429
|
|
|
—
|
|
||
Total assets
|
$
|
479,791
|
|
|
$
|
200
|
|
Liabilities and Equity
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Non-recourse debt
|
$
|
208,700
|
|
|
$
|
—
|
|
Due to related parties and affiliates
|
4,985
|
|
|
108
|
|
||
Accounts payable, accrued expenses and other liabilities
|
18,068
|
|
|
—
|
|
||
Distributions payable
|
1,846
|
|
|
—
|
|
||
Total liabilities
|
233,599
|
|
|
108
|
|
||
Commitments and contingencies (
Note 9
)
|
|
|
|
||||
Equity:
|
|
|
|
||||
CWI 2 stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued
|
—
|
|
|
—
|
|
||
Class A common stock, $0.001 par value; 320,000,000 shares authorized; 10,792,296 and 22,222 shares, respectively, issued and outstanding
|
11
|
|
|
—
|
|
||
Class T common stock, $0.001 par value; 80,000,000 shares authorized; 14,983,012 and none, respectively, issued and outstanding
|
15
|
|
|
—
|
|
||
Additional paid-in capital
|
228,401
|
|
|
200
|
|
||
Distributions and accumulated losses
|
(15,109
|
)
|
|
(108
|
)
|
||
Accumulated other comprehensive loss
|
(94
|
)
|
|
—
|
|
||
Total CWI 2 stockholders’ equity
|
213,224
|
|
|
92
|
|
||
Noncontrolling interests
|
32,968
|
|
|
—
|
|
||
Total equity
|
246,192
|
|
|
92
|
|
||
Total liabilities and equity
|
$
|
479,791
|
|
|
$
|
200
|
|
|
|
|
Inception
|
||||
|
|
|
(May 22, 2014)
|
||||
|
Year Ended
|
|
through
|
||||
|
December 31, 2015
|
|
December 31, 2014
|
||||
Revenues
|
|
|
|
||||
Hotel Revenues
|
|
|
|
||||
Rooms
|
$
|
27,524
|
|
|
$
|
—
|
|
Food and beverage
|
15,321
|
|
|
—
|
|
||
Other operating revenue
|
6,240
|
|
|
—
|
|
||
Total Hotel Revenues
|
49,085
|
|
|
—
|
|
||
Operating Expenses
|
|
|
|
||||
Hotel Expenses
|
|
|
|
||||
Rooms
|
5,812
|
|
|
—
|
|
||
Food and beverage
|
10,220
|
|
|
—
|
|
||
Other hotel operating expenses
|
3,044
|
|
|
—
|
|
||
Sales and marketing
|
4,423
|
|
|
—
|
|
||
General and administrative
|
3,817
|
|
|
—
|
|
||
Property taxes, insurance, rent and other
|
2,495
|
|
|
—
|
|
||
Repairs and maintenance
|
2,144
|
|
|
—
|
|
||
Utilities
|
2,145
|
|
|
—
|
|
||
Management fees
|
1,975
|
|
|
—
|
|
||
Depreciation and amortization
|
5,975
|
|
|
—
|
|
||
Total Hotel Expenses
|
42,050
|
|
|
—
|
|
||
|
|
|
|
||||
Other Operating Expenses
|
|
|
|
||||
Acquisition-related expenses
|
13,133
|
|
|
—
|
|
||
Corporate general and administrative expenses
|
2,302
|
|
|
108
|
|
||
Asset management fees to affiliate and other
|
1,152
|
|
|
—
|
|
||
Total Other Operating Expenses
|
16,587
|
|
|
108
|
|
||
Operating Loss
|
(9,552
|
)
|
|
(108
|
)
|
||
Other Income and (Expenses)
|
|
|
|
||||
Interest expense
|
(4,368
|
)
|
|
—
|
|
||
Equity in earnings of equity method investment in real estate
|
1,846
|
|
|
—
|
|
||
Other income and (expenses)
|
83
|
|
|
—
|
|
||
|
(2,439
|
)
|
|
—
|
|
||
Loss from Operations Before Income Taxes
|
(11,991
|
)
|
|
(108
|
)
|
||
Provision for income taxes
|
(72
|
)
|
|
—
|
|
||
Net Loss
|
(12,063
|
)
|
|
(108
|
)
|
||
Income attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $301 and $0, respectively)
|
(471
|
)
|
|
—
|
|
||
Net Loss Attributable to CWI 2 Stockholders
|
$
|
(12,534
|
)
|
|
$
|
(108
|
)
|
|
|
|
|
||||
Class A Common Stock
|
|
|
|
||||
Net loss attributable to CWI 2 Stockholders
|
$
|
(5,328
|
)
|
|
$
|
(108
|
)
|
Basic and diluted weighted-average shares outstanding
|
2,447,082
|
|
|
77,165
|
|
||
Basic and diluted loss per share
|
$
|
(2.18
|
)
|
|
$
|
(1.40
|
)
|
|
|
|
|
||||
Class T Common Stock
|
|
|
|
||||
Net loss attributable to CWI 2 Stockholders
|
$
|
(7,206
|
)
|
|
$
|
—
|
|
Basic and diluted weighted-average shares outstanding
|
3,309,508
|
|
|
—
|
|
||
Basic and diluted loss per share
|
$
|
(2.18
|
)
|
|
$
|
—
|
|
|
|
|
Inception
|
||||
|
|
|
(May 22, 2014)
|
||||
|
Year Ended
|
|
through
|
||||
|
December 31, 2015
|
|
December 31, 2014
|
||||
Net Loss
|
$
|
(12,063
|
)
|
|
$
|
(108
|
)
|
Other Comprehensive Loss
|
|
|
|
||||
Other comprehensive loss before reclassifications — unrealized loss on derivative instruments
|
(104
|
)
|
|
—
|
|
||
Comprehensive Loss
|
(12,167
|
)
|
|
(108
|
)
|
||
|
|
|
|
||||
Amounts Attributable to Noncontrolling Interests
|
|
|
|
||||
Net income
|
(471
|
)
|
|
—
|
|
||
Change in unrealized loss on derivative instruments
|
10
|
|
|
—
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(461
|
)
|
|
—
|
|
||
Comprehensive Loss Attributable to CWI 2 Stockholders
|
$
|
(12,628
|
)
|
|
$
|
(108
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||
|
CWI 2 Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In
Capital
|
|
Distributions
and
Accumulated
Losses
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total CWI 2
Stockholders’
Equity
|
|
Noncontrolling
Interests
|
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||||
|
Class A
|
|
Class T
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at January 1, 2015
|
22,222
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
(108
|
)
|
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
92
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
(12,534
|
)
|
|
|
|
(12,534
|
)
|
|
471
|
|
|
(12,063
|
)
|
||||||||||||||
Shares issued, net of offering costs
|
10,673,887
|
|
|
11
|
|
|
14,975,569
|
|
|
15
|
|
|
227,247
|
|
|
|
|
|
|
227,273
|
|
|
|
|
227,273
|
|
|||||||||||
Shares issued to affiliates
|
77,359
|
|
|
|
|
|
|
|
|
774
|
|
|
|
|
|
|
774
|
|
|
|
|
774
|
|
||||||||||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
34,058
|
|
|
34,058
|
|
|||||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(1,551
|
)
|
|
(1,551
|
)
|
|||||||||||||||
Shares issued under share incentive plans
|
|
|
|
|
|
|
|
|
55
|
|
|
|
|
|
|
55
|
|
|
|
|
55
|
|
|||||||||||||||
Stock-based compensation to directors
|
12,500
|
|
|
|
|
|
|
|
|
125
|
|
|
|
|
|
|
125
|
|
|
|
|
125
|
|
||||||||||||||
Stock dividends issued
|
6,328
|
|
|
|
|
7,443
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||||
Distributions declared ($0.3775 and $0.3181 per share to Class A and Class T, respectively)
|
|
|
|
|
|
|
|
|
|
|
(2,467
|
)
|
|
|
|
(2,467
|
)
|
|
|
|
(2,467
|
)
|
|||||||||||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Change in net unrealized loss on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
(94
|
)
|
|
(94
|
)
|
|
(10
|
)
|
|
(104
|
)
|
||||||||||||||
Balance at December 31, 2015
|
10,792,296
|
|
|
$
|
11
|
|
|
14,983,012
|
|
|
$
|
15
|
|
|
$
|
228,401
|
|
|
$
|
(15,109
|
)
|
|
$
|
(94
|
)
|
|
$
|
213,224
|
|
|
$
|
32,968
|
|
|
$
|
246,192
|
|
|
CWI 2 Stockholder
|
|||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|||||||||||
|
Class A
|
|
|
|
|
|
|
|||||||||||
|
Shares
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Accumulated
Losses
|
|
Total
Stockholder
Equity
|
|||||||||
Balance at Inception (May 22, 2014)
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Shares issued to affiliates
|
22,222
|
|
|
—
|
|
|
200
|
|
|
|
|
200
|
|
|||||
Net loss
|
|
|
|
|
|
|
(108
|
)
|
|
(108
|
)
|
|||||||
Balance at December 31, 2014
|
22,222
|
|
|
$
|
—
|
|
|
$
|
200
|
|
|
$
|
(108
|
)
|
|
$
|
92
|
|
|
|
|
Inception
|
||||
|
|
|
(May 22, 2014)
|
||||
|
Year Ended
|
|
through
|
||||
|
December 31, 2015
|
|
December 31, 2014
|
||||
Cash Flows — Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(12,063
|
)
|
|
$
|
(108
|
)
|
Adjustments to net loss:
|
|
|
|
||||
Depreciation and amortization
|
5,975
|
|
|
—
|
|
||
Equity in earnings of equity method investment in real estate in excess of distributions received
|
(36
|
)
|
|
—
|
|
||
Asset management fees to affiliates settled in shares
|
954
|
|
|
—
|
|
||
Amortization of stock-based compensation
|
180
|
|
|
—
|
|
||
Amortization of deferred key money, deferred financing costs and other
|
(140
|
)
|
|
—
|
|
||
Net changes in other assets and liabilities
|
1,680
|
|
|
—
|
|
||
Receipt of key money and other deferred incentive payments
|
125
|
|
|
—
|
|
||
(Decrease) increase in due to related parties and affiliates
|
(228
|
)
|
|
108
|
|
||
Net Cash Used in Operating Activities
|
(3,553
|
)
|
|
—
|
|
||
|
|
|
|
||||
Cash Flows — Investing Activities
|
|
|
|
||||
Acquisitions of hotels
|
(285,829
|
)
|
|
—
|
|
||
Purchase of equity interest
|
(37,559
|
)
|
|
—
|
|
||
Funds placed in escrow
|
(10,905
|
)
|
|
—
|
|
||
Deposits for hotel investments
|
(10,691
|
)
|
|
—
|
|
||
Deposits released for hotel investments
|
5,150
|
|
|
—
|
|
||
Capital expenditures
|
(4,561
|
)
|
|
—
|
|
||
Funds released from escrow
|
1,947
|
|
|
—
|
|
||
Capital contributions to equity investments in real estate
|
(3
|
)
|
|
—
|
|
||
Net Cash Used in Investing Activities
|
(342,451
|
)
|
|
—
|
|
||
|
|
|
|
||||
Cash Flows — Financing Activities
|
|
|
|
||||
Proceeds from issuance of shares, net of offering costs
|
224,019
|
|
|
200
|
|
||
Proceeds from mortgage financing
|
142,000
|
|
|
—
|
|
||
Repayment of notes payable to affiliate
|
(102,447
|
)
|
|
—
|
|
||
Proceeds from notes payable to affiliate
|
102,447
|
|
|
—
|
|
||
Contribution from noncontrolling interests
|
34,058
|
|
|
—
|
|
||
Distributions to noncontrolling interests
|
(1,551
|
)
|
|
—
|
|
||
Deferred financing costs
|
(917
|
)
|
|
—
|
|
||
Distributions paid
|
(621
|
)
|
|
—
|
|
||
Purchase of interest rate cap
|
(103
|
)
|
|
—
|
|
||
Deposits for mortgage financing
|
(50
|
)
|
|
—
|
|
||
Deposits released for mortgage financing
|
50
|
|
|
—
|
|
||
Net Cash Provided by Financing Activities
|
396,885
|
|
|
200
|
|
||
|
|
|
|
||||
Change in Cash During the Year
|
|
|
|
||||
Net increase in cash
|
50,881
|
|
|
200
|
|
||
Cash, beginning of year
|
200
|
|
|
—
|
|
||
Cash, end of year
|
$
|
51,081
|
|
|
$
|
200
|
|
|
|
|
Inception
|
||||
|
|
|
(May 22, 2014)
|
||||
|
Year Ended
|
|
through
|
||||
|
December 31, 2015
|
|
December 31, 2014
|
||||
Cash payments for interest, net of amounts capitalized
|
$
|
3,569
|
|
|
$
|
—
|
|
Cash payments for income taxes
|
$
|
808
|
|
|
$
|
—
|
|
|
|
|
Inception
|
||||
|
|
|
(May 22, 2014)
|
||||
|
Year Ended
|
|
through
|
||||
|
December 31, 2015
|
|
December 31, 2014
|
||||
Amounts Included in the Consolidated Statements of Operations
|
|
|
|
||||
To our Advisor:
|
|
|
|
||||
Acquisition fees
|
$
|
6,225
|
|
|
$
|
—
|
|
Asset management fees
|
954
|
|
|
—
|
|
||
Interest expense
|
723
|
|
|
—
|
|
||
Personnel and overhead reimbursements
|
660
|
|
|
—
|
|
||
Available Cash Distributions
|
301
|
|
|
—
|
|
||
To CWI 1:
|
|
|
|
||||
Acquisition fee to CWI 1
|
3,411
|
|
|
—
|
|
||
|
$
|
12,274
|
|
|
$
|
—
|
|
|
|
|
|
||||
Other Transaction Fees Incurred to Our Advisor and Affiliates
|
|
|
|
||||
Selling commissions and dealer manager fees
|
$
|
16,643
|
|
|
$
|
—
|
|
Organization and offering costs
|
4,561
|
|
|
108
|
|
||
Capitalized acquisition fees for equity method investment
|
1,862
|
|
|
—
|
|
||
Annual distribution and shareholder servicing fee
|
2,478
|
|
|
—
|
|
||
|
$
|
25,544
|
|
|
$
|
108
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Buildings
|
$
|
294,352
|
|
|
$
|
—
|
|
Land
|
47,900
|
|
|
—
|
|
||
Furniture, fixtures and equipment
|
16,496
|
|
|
—
|
|
||
Building and site improvements
|
815
|
|
|
—
|
|
||
Construction in progress
|
5,061
|
|
|
—
|
|
||
Hotels, at cost
|
364,624
|
|
|
—
|
|
||
Less: Accumulated depreciation
|
(5,359
|
)
|
|
—
|
|
||
Net investments in hotels
|
$
|
359,265
|
|
|
$
|
—
|
|
|
2015 Acquisitions
|
||||||||||
|
Marriott
Sawgrass
Golf Resort & Spa
(a)
|
|
Courtyard
Nashville
Downtown
|
|
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
||||||
Acquisition Date
|
April 1, 2015
|
|
May 1, 2015
|
|
November 4, 2015
|
||||||
Cash consideration
|
$
|
24,764
|
|
|
$
|
58,498
|
|
|
$
|
168,809
|
|
Assets acquired at fair value:
|
|
|
|
|
|
||||||
Building
|
$
|
93,551
|
|
|
$
|
47,443
|
|
|
$
|
153,358
|
|
Land
|
26,400
|
|
|
8,500
|
|
|
13,000
|
|
|||
Buildings and site improvements
|
27
|
|
|
—
|
|
|
—
|
|
|||
Furniture, fixtures and equipment
|
8,132
|
|
|
4,945
|
|
|
3,526
|
|
|||
Construction in progress
|
770
|
|
|
—
|
|
|
—
|
|
|||
Accounts receivable
|
5,635
|
|
|
224
|
|
|
76
|
|
|||
Other assets
|
2,628
|
|
|
4
|
|
|
565
|
|
|||
Liabilities assumed at fair value:
|
|
|
|
|
|
||||||
Non-recourse mortgage
|
(66,700
|
)
|
|
—
|
|
|
—
|
|
|||
Accounts payable, accrued expenses and other liabilities
|
(11,921
|
)
|
|
(2,618
|
)
|
|
(1,716
|
)
|
|||
Contribution from noncontrolling interest at fair value
|
(33,758
|
)
|
|
—
|
|
|
—
|
|
|||
Net assets acquired at fair value
|
$
|
24,764
|
|
|
$
|
58,498
|
|
|
$
|
168,809
|
|
|
From Acquisition Date Through December 31, 2015
|
||||||||||
Revenues
|
$
|
34,928
|
|
|
$
|
10,537
|
|
|
$
|
3,620
|
|
Income from Operations before Income Taxes
|
$
|
2,135
|
|
|
$
|
4,290
|
|
|
$
|
610
|
|
(a)
|
The remaining
50%
interest in this venture is owned by CWI 1.
|
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Pro forma total revenues
|
$
|
92,095
|
|
|
$
|
87,415
|
|
|
|
|
|
||||
Pro forma net income (loss)
|
$
|
5,758
|
|
|
$
|
(8,487
|
)
|
Pro forma income attributable to noncontrolling interests
|
(1,174
|
)
|
|
(511
|
)
|
||
Pro forma net income (loss) attributable to CWI 2 stockholders
|
$
|
4,584
|
|
|
$
|
(8,998
|
)
|
|
|
|
|
||||
Pro forma income (loss) per Class A share:
|
|
|
|
||||
Net income (loss) attributable to CWI 2 stockholders
|
$
|
3,365
|
|
|
$
|
(8,998
|
)
|
Basic and diluted pro forma weighted-average shares
outstanding
|
9,143,730
|
|
|
7,995,127
|
|
||
Basic and diluted pro forma income (loss) per share
|
$
|
0.37
|
|
|
$
|
(1.13
|
)
|
|
|
|
|
||||
Pro forma income per Class T share:
|
|
|
|
||||
Net income attributable to CWI 2 stockholders
|
$
|
1,218
|
|
|
$
|
—
|
|
Basic and diluted pro forma weighted-average shares
outstanding
|
3,309,508
|
|
|
—
|
|
||
Basic and diluted pro forma income per share
|
$
|
0.37
|
|
|
$
|
—
|
|
Unconsolidated Hotel
|
|
State
|
|
Number
of Rooms
|
|
% Owned
|
|
Our Initial
Investment
(a)
|
|
Acquisition Date
|
|
Hotel Type
|
|
Renovation
Status at
December 31, 2015
|
|
Carrying Value at December 31,
|
||||||||||
|
|
|
|
|
|
|
|
2015
|
|
2014
|
||||||||||||||||
Ritz-Carlton Key
Biscayne Venture
(b)
|
|
FL
|
|
480
|
|
|
19.3
|
%
|
|
$
|
37,559
|
|
|
5/29/2015
|
|
Resort
|
|
Planned Future
|
|
$
|
37,599
|
|
|
$
|
—
|
|
(a)
|
This amount represents purchase price plus capitalized costs, inclusive of fees paid to our advisor, at the time of acquisition.
|
(b)
|
CWI 1 acquired a
47.4%
interest in the venture on the same date. The remaining
33.3%
interest is retained by the original owner. Our portion of the venture was financed primarily by a loan of
$37.4 million
from WPC (
Note 3
). The number of rooms presented includes
178
condo-hotel units that participate in the resort rental program. We received cash distributions of
$1.8 million
from this investment during the year ended
December 31, 2015
. At
December 31, 2015
, the unamortized basis differences on our equity investment were
$1.8 million
. Net amortization of the basis differences reduced the carrying value of our equity investment by less than
$0.1 million
for the
year ended December 31, 2015
.
|
|
|
|
|
Inception
|
||||
|
|
|
|
(May 22, 2014)
|
||||
|
|
Year Ended
|
|
through
|
||||
Unconsolidated Hotel
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Ritz-Carlton Key Biscayne Venture
|
|
$
|
1,846
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Real estate, net
|
$
|
279,492
|
|
|
$
|
—
|
|
Other assets
|
52,155
|
|
|
—
|
|
||
Total assets
|
331,647
|
|
|
—
|
|
||
Debt
|
(169,371
|
)
|
|
—
|
|
||
Other liabilities
|
(15,170
|
)
|
|
—
|
|
||
Total liabilities
|
(184,541
|
)
|
|
—
|
|
||
Members’ equity
|
$
|
147,106
|
|
|
$
|
—
|
|
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Revenues
|
$
|
44,079
|
|
|
$
|
—
|
|
Expenses
|
(49,369
|
)
|
|
—
|
|
||
Net loss attributable to equity method investment
|
$
|
(5,290
|
)
|
|
$
|
—
|
|
Derivatives Designated
|
|
|
|
Asset Derivatives Fair Value at December 31,
|
||||||
as Hedging Instruments
|
|
Balance Sheet Location
|
|
2015
|
|
2014
|
||||
Interest rate caps
|
|
Other assets
|
|
$
|
24
|
|
|
$
|
—
|
|
|
|
Number of
|
|
Face
|
|
Fair Value at
|
|||||
Interest Rate Derivatives
|
|
Instruments
|
|
Amount
|
|
December 31, 2015
|
|||||
Interest rate caps
|
|
2
|
|
|
$
|
120,000
|
|
|
$
|
24
|
|
|
|
|
|
|
|
|
|
Carrying Amount at December 31,
|
||||||
Consolidated Hotels
|
|
Interest Rate
|
|
Rate Type
|
|
Current Maturity Date
|
|
2015
|
|
2014
|
||||
Courtyard Nashville Downtown
(a) (b)
|
|
3.25%
|
|
Variable
|
|
5/2019
|
|
$
|
42,000
|
|
|
$
|
—
|
|
Marriott Sawgrass Golf Resort & Spa
(a) (c)
|
|
4.09%
|
|
Variable
|
|
11/2019
|
|
66,700
|
|
|
—
|
|
||
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
|
3.90%
|
|
Fixed
|
|
12/2022
|
|
100,000
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
$
|
208,700
|
|
|
$
|
—
|
|
(a)
|
These mortgage loans have variable interest rates, which have effectively been capped through the use of interest rate caps (
Note 7
). The interest rates presented for these mortgage loans reflect the rate in effect at
December 31, 2015
through the use of an interest rate cap, when applicable.
|
(b)
|
This mortgage loan has a one-year extension option, which is subject to certain conditions. The maturity date in the table does not reflect the extension option.
|
(c)
|
Total mortgage financing commitment is up to
$78.0 million
, with the difference between the commitment and the carrying amount available for renovation draws.
|
Years Ending December 31,
|
|
Total
|
||
2016
|
|
$
|
—
|
|
2017
|
|
640
|
|
|
2018
|
|
960
|
|
|
2019
|
|
108,892
|
|
|
2020
|
|
1,863
|
|
|
Thereafter through 2022
|
|
96,345
|
|
|
Total
|
|
$
|
208,700
|
|
|
|
December 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Capital commitments
|
|
$
|
27,100
|
|
|
$
|
—
|
|
Less: paid
|
|
(4,390
|
)
|
|
—
|
|
||
Unpaid commitments
|
|
22,710
|
|
|
—
|
|
||
Less: amounts in cash or restricted cash designated for renovations
|
|
(9,607
|
)
|
|
—
|
|
||
Unfunded commitments
(a)
|
|
$
|
13,103
|
|
|
$
|
—
|
|
(a)
|
As of December 31, 2015,
$11.3 million
of our unfunded commitment is expected to be funded by future renovation draws on a related mortgage loan.
|
|
Year Ended December 31, 2015
(a)
|
||||||
|
Class A
|
|
Class T
|
||||
Ordinary income
|
$
|
0.1896
|
|
|
$
|
0.1559
|
|
Total distributions paid
|
$
|
0.1896
|
|
|
$
|
0.1559
|
|
(a)
|
Represents RSUs issued to employees of the subadvisor during the
year ended December 31, 2015
.
|
(b)
|
We currently expect to recognize stock-based compensation expense totaling approximately
$0.2 million
over the remaining vesting period. The awards to employees of the subadvisor had a weighted-average remaining contractual term of
2.3
years at
December 31, 2015
.
|
|
|
|
Inception
|
||||
|
|
|
(May 22, 2014)
|
||||
|
Year Ended
|
|
through
|
||||
|
December 31, 2015
|
|
December 31, 2014
|
||||
Federal
|
|
|
|
|
|
||
Current
|
$
|
423
|
|
|
$
|
—
|
|
Deferred
|
(180
|
)
|
|
—
|
|
||
|
243
|
|
|
—
|
|
||
|
|
|
|
||||
State and Local
|
|
|
|
||||
Current
|
164
|
|
|
—
|
|
||
Deferred
|
(335
|
)
|
|
—
|
|
||
|
(171
|
)
|
|
—
|
|
||
Total Provision
|
$
|
72
|
|
|
$
|
—
|
|
|
At December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred Tax Assets
|
|
|
|
||||
Key money liability
|
$
|
1,977
|
|
|
$
|
—
|
|
Net operating losses
|
621
|
|
|
—
|
|
||
Accrued vacation payable and deferred rent
|
30
|
|
|
—
|
|
||
Gift card liability
|
11
|
|
|
—
|
|
||
Other
|
323
|
|
|
—
|
|
||
Total deferred income taxes
|
2,962
|
|
|
—
|
|
||
Valuation allowance
|
(1,953
|
)
|
|
—
|
|
||
Total deferred tax assets
|
1,009
|
|
|
—
|
|
||
Deferred Tax Liabilities
|
|
|
|
||||
Other
|
(4
|
)
|
|
—
|
|
||
Net Deferred Tax Asset
|
$
|
1,005
|
|
|
$
|
—
|
|
|
|
|
|
|
Inception
|
||||||||
|
|
|
|
|
(May 22, 2014)
|
||||||||
|
Year Ended
|
|
through
|
||||||||||
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||
Pre-tax loss from taxable subsidiaries
|
$
|
(7,172
|
)
|
|
|
|
$
|
—
|
|
|
|
||
Federal provision at statutory tax rate
|
(2,438
|
)
|
|
34.0
|
%
|
|
—
|
|
|
—
|
%
|
||
State and local taxes, net of federal provision
|
(381
|
)
|
|
5.3
|
%
|
|
—
|
|
|
—
|
%
|
||
Other
|
14
|
|
|
(0.2
|
)%
|
|
—
|
|
|
—
|
%
|
||
Loss not subject to federal tax
|
924
|
|
|
(12.9
|
)%
|
|
|
|
|
||||
Valuation allowance
|
1,953
|
|
|
(27.2
|
)%
|
|
|
|
|
||||
Tax provision — taxable subsidiaries
|
72
|
|
|
(1.0
|
)%
|
|
—
|
|
|
—
|
%
|
||
Other state and local taxes
|
—
|
|
|
|
|
—
|
|
|
|
||||
Total provision
|
$
|
72
|
|
|
|
|
$
|
—
|
|
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2015
(a)
|
|
June 30, 2015
(a)
|
|
September 30, 2015
(a)
|
|
December 31, 2015
(a)
|
||||||||
Revenues
|
$
|
—
|
|
|
$
|
18,533
|
|
|
$
|
12,978
|
|
|
$
|
17,574
|
|
Operating expenses
|
428
|
|
|
22,714
|
|
|
13,892
|
|
|
21,603
|
|
||||
Net (loss) income
|
(428
|
)
|
|
(5,143
|
)
|
|
68
|
|
|
(6,560
|
)
|
||||
Income attributable to noncontrolling interests
|
—
|
|
|
(1,197
|
)
|
|
(19
|
)
|
|
745
|
|
||||
Net (loss) income attributable to CWI 2 stockholders
|
$
|
(428
|
)
|
|
$
|
(6,340
|
)
|
|
$
|
49
|
|
|
$
|
(5,815
|
)
|
|
|
|
|
|
|
|
|
||||||||
Class A common stock
|
|
|
|
|
|
|
|
||||||||
Basic and diluted (loss) income per share
(a) (b)
|
$
|
(5.55
|
)
|
|
$
|
(12.97
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.35
|
)
|
Distributions declared per share
|
$
|
—
|
|
|
$
|
0.0775
|
|
|
$
|
0.1500
|
|
|
$
|
0.1500
|
|
|
|
|
|
|
|
|
|
||||||||
Class T common stock
|
|
|
|
|
|
|
|
||||||||
Basic and diluted loss per share
(a) (b)
|
$
|
—
|
|
|
$
|
(12.98
|
)
|
|
$
|
—
|
|
|
$
|
(0.34
|
)
|
Distributions declared per share
|
$
|
—
|
|
|
$
|
0.0653
|
|
|
$
|
0.1264
|
|
|
$
|
0.1264
|
|
|
Three Months Ended
|
||||||||||||||
|
March 31, 2014
(a)
|
|
June 30, 2014
(a)
|
|
September 30, 2014
(a)
|
|
December 31, 2014
(a)
|
||||||||
Revenues
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating expenses
|
—
|
|
|
36
|
|
|
—
|
|
|
72
|
|
||||
Net loss attributable to CWI 2 stockholders
|
—
|
|
|
(36
|
)
|
|
—
|
|
|
(72
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Class A common stock
|
|
|
|
|
|
|
|
||||||||
Basic and diluted loss per share
(a)
|
$
|
—
|
|
|
$
|
(0.47
|
)
|
|
$
|
—
|
|
|
$
|
(0.93
|
)
|
Distributions declared per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Class T common stock
|
|
|
|
|
|
|
|
||||||||
Basic and diluted income per share
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Distributions declared per share
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)
|
For purposes of determining the weighted-average number of shares of common stock outstanding and loss (income) per share, historical amounts have been adjusted to treat stock distributions declared and effective through our filing date as if they were outstanding as of the beginning of the periods presented.
|
(b)
|
The sum of the quarterly (loss) income per share does not agree to the annual loss per share for 2015 due to the issuance of our common stock that occurred during these periods.
|
Description
|
|
Balance at
Beginning
of Year
|
|
Other
Additions
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
||||||||
Valuation reserve for deferred tax assets
|
|
$
|
—
|
|
|
$
|
1,953
|
|
|
$
|
—
|
|
|
$
|
1,953
|
|
|
|
|
|
|
|
|
|
|
||||||||
Year Ended December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Valuation reserve for deferred tax assets
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
Initial Cost to Company
|
|
Costs
Capitalized Subsequent to
Acquisition
(a)
|
|
Decrease
In Net
Investments
|
|
Gross Amount at which Carried at
Close of Period
(b)
|
|
|
|
|
|
|
|
Life on which Depreciation in Latest Statement of Income is
Computed
|
||||||||||||||||||||||||
Description
|
|
Encumbrances
|
|
Land
|
|
Buildings
|
|
|
|
Land
|
|
Buildings
|
|
Total
|
|
Accumulated
Depreciation
(b)
|
|
Date of
Construction
|
|
Date
Acquired
|
|
|||||||||||||||||||||
Hotel in Ponte Vedra Beach, FL
|
|
$
|
66,700
|
|
|
$
|
26,400
|
|
|
$
|
93,551
|
|
|
$
|
228
|
|
|
$
|
—
|
|
|
$
|
26,400
|
|
|
$
|
93,779
|
|
|
$
|
120,179
|
|
|
$
|
1,803
|
|
|
1987
|
|
Apr 2015
|
|
4 ‒ 40 yrs.
|
Hotel in Nashville, TN
|
|
42,000
|
|
|
8,500
|
|
|
47,443
|
|
|
587
|
|
|
—
|
|
|
8,500
|
|
|
48,030
|
|
|
56,530
|
|
|
804
|
|
|
1895
|
|
May 2015
|
|
4 ‒ 40 yrs.
|
|||||||||
Hotel in Denver, CO
|
|
100,000
|
|
|
13,000
|
|
|
153,358
|
|
|
—
|
|
|
—
|
|
|
13,000
|
|
|
153,358
|
|
|
166,358
|
|
|
609
|
|
|
2010
|
|
Nov 2015
|
|
4 ‒ 40 yrs.
|
|||||||||
|
|
$
|
208,700
|
|
|
$
|
47,900
|
|
|
$
|
294,352
|
|
|
$
|
815
|
|
|
$
|
—
|
|
|
$
|
47,900
|
|
|
$
|
295,167
|
|
|
$
|
343,067
|
|
|
$
|
3,216
|
|
|
|
|
|
|
|
(a)
|
Consists of the cost of improvements subsequent to acquisition and acquisition costs, including construction costs primarily for renovations pursuant to our contractual obligations.
|
(b)
|
A reconciliation of hotels and accumulated depreciation follows:
|
|
Reconciliation of Hotels
|
||||||
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Beginning balance
|
$
|
—
|
|
|
$
|
—
|
|
Additions
|
342,252
|
|
|
—
|
|
||
Improvements
|
815
|
|
|
—
|
|
||
Ending balance
|
$
|
343,067
|
|
|
$
|
—
|
|
|
Reconciliation of Accumulated Depreciation for Hotels
|
||||||
|
Years Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Beginning balance
|
$
|
—
|
|
|
$
|
—
|
|
Depreciation expense
|
3,216
|
|
|
—
|
|
||
Ending balance
|
$
|
3,216
|
|
|
$
|
—
|
|
Exhibit No.
|
|
|
Description
|
|
Method of Filing
|
3.1
|
|
|
Second Articles of Amendment and Restatement of Carey Watermark Investors 2 Incorporated
|
|
Incorporated by reference to Exhibit 3.1 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
3.2
|
|
|
Bylaws of Carey Watermark Investors 2 Incorporated
|
|
Incorporated by reference to Exhibit 3.3 to the registrant's Registration Statement on Form S-11 (File No. 333-196681) filed on June 11, 2014
|
|
|
|
|
|
|
4.1
|
|
|
Amended Distribution Reinvestment Plan
|
|
Filed herewith
|
|
|
|
|
|
|
4.2
|
|
|
Form of Notice to Stockholder
|
|
Incorporated by reference to Exhibit 4.2 to the registrant’s Registration Statement on Form S-11 (File No. 333-196681) filed on August 7, 2014
|
|
|
|
|
|
|
10.1
|
|
|
Advisory Agreement dated February 9, 2015, between Carey Watermark Investors 2 Incorporated, CWI 2 OP, LP, and Carey Lodging Advisors, LLC
|
|
Incorporated by reference to Exhibit 10.1 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.2
|
|
|
Subadvisory Agreement dated February 9, 2015 between Carey Lodging Advisors, LLC, and CWA 2, LLC
|
|
Incorporated by reference to Exhibit 10.2 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.3
|
|
|
Agreement of Limited Partnership of CWI 2 OP, LP dated as of February 9, 2015, by and among Carey Watermark Investors 2 Incorporated and Carey Watermark Holdings 2, LLC
|
|
Incorporated by reference to Exhibit 10.3 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.4
|
|
|
Dealer Manager Agreement dated April 13, 2015, between Carey Watermark Investors 2 Incorporated and Carey Financial, LLC
|
|
Incorporated by reference to Exhibit 10.4 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.5
|
|
|
Escrow Agreement dated February 19, 2015, between Carey Financial, LLC, Carey Watermark Investors 2 Incorporated and UMB Bank, N.A.
|
|
Incorporated by reference to Exhibit 10.5 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.6
|
|
|
2015 Equity Incentive Plan
|
|
Incorporated by reference to Exhibit 10.6 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.7
|
|
|
Indemnification Agreement dated February 9, 2015, between Carey Watermark Investors 2 Incorporated and CWA2, LLC
|
|
Incorporated by reference to Exhibit 10.7 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.8
|
|
|
Form of Indemnification Agreement between Carey Watermark Investors 2 Incorporated and its directors and executive officers
|
|
Incorporated by reference to Exhibit 10.8 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.9
|
|
|
Amended and Restated Limited Liability Company Agreement of CWI Sawgrass Holdings, LLC dated April 1, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 2, 2015
|
Exhibit No.
|
|
|
Description
|
|
Method of Filing
|
10.10
|
|
|
Form of Selected Dealer Agreement
|
|
Incorporated by reference to Exhibit 10.10 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.11
|
|
|
Agreement for Sale and Purchase of Hotel, by and between Nashville Hotel Group and CWI Nashville Downtown Hotel, LLC dated as of February 13, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on May 7, 2015
|
|
|
|
|
|
|
10.12
|
|
|
First Amendment to Advisory Agreement, dated as of June 30, 2015, by and among Carey Watermark Investors 2 Incorporated, CWI 2 OP, LP and Carey Lodging Advisors, LLC.
|
|
Incorporated by reference to Exhibit 10.2 to W. P. Carey Inc.'s Quarterly Report on Form 10-Q (File No. 001-13779) filed on August 7, 2015.
|
|
|
|
|
|
|
10.13
|
|
|
Amended and Restated Limited Liability Company Operating Agreement of CWI Key Biscayne Hotel, LLC, by and between CWI OP, LP and CWI 2 OP, LP dated as of May 29, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s current Report on Form 8-K filed on June 4, 2015
|
|
|
|
|
|
|
10.14
|
|
|
Agreement for Sale and Purchase and Joint Escrow Instructions, by and between Denver Downtown Hotel LLC and CWI 2 Denver Downtown Hotel, LLC, dated as of September 16, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s current Report on Form 8-K filed on November 9, 2015
|
|
|
|
|
|
|
10.15
|
|
|
Contribution Agreement, by and among WPPI Bellevue MFS, LLC, CWI 2 Bellevue Hotel, LLC (formerly known as CWI Bellevue Hotel, LLC), CWI OP, LP and CWI 2 OP, LP, dated as of September 15, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on January 28, 2016
|
|
|
|
|
|
|
10.16
|
|
|
First Amendment to Contribution Agreement by and among WPPI Bellevue MFS, LLC, CWI 2 Bellevue
Hotel, LLC (formerly known as CWI Bellevue Hotel, LLC), CWI OP, LP and CWI 2 OP, LP, dated as of January 22, 2016
|
|
Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on January 28, 2016
|
21.1
|
|
|
List of Registrant Subsidiaries
|
|
Filed herewith
|
|
|
|
|
|
|
31.1
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
31.2
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
32
|
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
101
|
|
|
The following materials from Carey Watermark Investors 2 Incorporated’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, 2015 and 2014, (ii) Consolidated Statements of Operations for the year ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (iii) Consolidated Statements of Comprehensive Loss for the year ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (iv) Consolidated Statements of Equity for the years ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (v) Consolidated Statements of Cash Flows for the year ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (vi) Notes to Consolidated Financial Statements, (vii) Schedule II - Valuation and Qualifying Accounts, (viii) Schedule III — Real Estate and Accumulated Depreciation, and (ix) Notes to Schedule III.
|
|
Filed herewith
|
|
|
|
Carey Watermark Investors 2 Incorporated
|
Date:
|
March 14, 2016
|
|
|
|
|
By:
|
/s/ Michael G. Medzigian
|
|
|
|
Michael G. Medzigian
|
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ Michael G. Medzigian
|
|
Chief Executive Officer and Director
|
|
March 14, 2016
|
Michael G. Medzigian
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Hisham A. Kader
|
|
Chief Financial Officer
|
|
March 14, 2016
|
Hisham A. Kader
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Noah K. Carter
|
|
Controller
|
|
March 14, 2016
|
Noah K. Carter
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
/s/ Charles S. Henry
|
|
Director
|
|
March 14, 2016
|
Charles S. Henry
|
|
|
|
|
|
|
|
|
|
/s/ Michael D. Johnson
|
|
Director
|
|
March 14, 2016
|
Michael D. Johnson
|
|
|
|
|
|
|
|
|
|
/s/ Robert E. Parsons, Jr.
|
|
Director
|
|
March 14, 2016
|
Robert E. Parsons, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ William H. Reynolds, Jr.
|
|
Director
|
|
March 14, 2016
|
William H. Reynolds, Jr.
|
|
|
|
|
Exhibit No.
|
|
|
Description
|
|
Method of Filing
|
3.1
|
|
|
Second Articles of Amendment and Restatement of Carey Watermark Investors 2 Incorporated
|
|
Incorporated by reference to Exhibit 3.1 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
3.2
|
|
|
Bylaws of Carey Watermark Investors 2 Incorporated
|
|
Incorporated by reference to Exhibit 3.3 to the registrant's Registration Statement on Form S-11 (File No. 333-196681) filed on June 11, 2014
|
|
|
|
|
|
|
4.1
|
|
|
Amended Distribution Reinvestment Plan
|
|
Filed herewith
|
|
|
|
|
|
|
4.2
|
|
|
Form of Notice to Stockholder
|
|
Incorporated by reference to Exhibit 4.2 to the registrant’s Registration Statement on Form S-11 (File No. 333-196681) filed on August 7, 2014
|
|
|
|
|
|
|
10.1
|
|
|
Advisory Agreement dated February 9, 2015, between Carey Watermark Investors 2 Incorporated, CWI 2 OP, LP, and Carey Lodging Advisors, LLC
|
|
Incorporated by reference to Exhibit 10.1 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.2
|
|
|
Subadvisory Agreement dated February 9, 2015 between Carey Lodging Advisors, LLC, and CWA 2, LLC
|
|
Incorporated by reference to Exhibit 10.2 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.3
|
|
|
Agreement of Limited Partnership of CWI 2 OP, LP dated as of February 9, 2015, by and among Carey Watermark Investors 2 Incorporated and Carey Watermark Holdings 2, LLC
|
|
Incorporated by reference to Exhibit 10.3 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.4
|
|
|
Dealer Manager Agreement dated April 13, 2015, between Carey Watermark Investors 2 Incorporated and Carey Financial, LLC
|
|
Incorporated by reference to Exhibit 10.4 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.5
|
|
|
Escrow Agreement dated February 19, 2015, between Carey Financial, LLC, Carey Watermark Investors 2 Incorporated and UMB Bank, N.A.
|
|
Incorporated by reference to Exhibit 10.5 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.6
|
|
|
2015 Equity Incentive Plan
|
|
Incorporated by reference to Exhibit 10.6 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.7
|
|
|
Indemnification Agreement dated February 9, 2015, between Carey Watermark Investors 2 Incorporated and CWA2, LLC
|
|
Incorporated by reference to Exhibit 10.7 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.8
|
|
|
Form of Indemnification Agreement between Carey Watermark Investors 2 Incorporated and its directors and executive officers
|
|
Incorporated by reference to Exhibit 10.8 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.9
|
|
|
Amended and Restated Limited Liability Company Agreement of CWI Sawgrass Holdings, LLC dated April 1, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on April 2, 2015
|
Exhibit No.
|
|
|
Description
|
|
Method of Filing
|
10.10
|
|
|
Form of Selected Dealer Agreement
|
|
Incorporated by reference to Exhibit 10.10 to the registrant's Form 10-Q filed on May 15, 2015
|
|
|
|
|
|
|
10.11
|
|
|
Agreement for Sale and Purchase of Hotel, by and between Nashville Hotel Group and CWI Nashville Downtown Hotel, LLC dated as of February 13, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on May 7, 2015
|
|
|
|
|
|
|
10.12
|
|
|
First Amendment to Advisory Agreement, dated as of June 30, 2015, by and among Carey Watermark Investors 2 Incorporated, CWI 2 OP, LP and Carey Lodging Advisors, LLC.
|
|
Incorporated by reference to Exhibit 10.2 to W. P. Carey Inc.'s Quarterly Report on Form 10-Q (File No. 001-13779) filed on August 7, 2015.
|
|
|
|
|
|
|
10.13
|
|
|
Amended and Restated Limited Liability Company Operating Agreement of CWI Key Biscayne Hotel, LLC, by and between CWI OP, LP and CWI 2 OP, LP dated as of May 29, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s current Report on Form 8-K filed on June 4, 2015
|
|
|
|
|
|
|
10.14
|
|
|
Agreement for Sale and Purchase and Joint Escrow Instructions, by and between Denver Downtown Hotel LLC and CWI 2 Denver Downtown Hotel, LLC, dated as of September 16, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s current Report on Form 8-K filed on November 9, 2015
|
|
|
|
|
|
|
10.15
|
|
|
Contribution Agreement, by and among WPPI Bellevue MFS, LLC, CWI 2 Bellevue Hotel, LLC (formerly known as CWI Bellevue Hotel, LLC), CWI OP, LP and CWI 2 OP, LP, dated as of September 15, 2015
|
|
Incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on January 28, 2016
|
|
|
|
|
|
|
10.16
|
|
|
First Amendment to Contribution Agreement by and among WPPI Bellevue MFS, LLC, CWI 2 Bellevue
Hotel, LLC (formerly known as CWI Bellevue Hotel, LLC), CWI OP, LP and CWI 2 OP, LP, dated as of January 22, 2016 |
|
Incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed on January 28, 2016
|
|
|
|
|
|
|
21.1
|
|
|
List of Registrant Subsidiaries
|
|
Filed herewith
|
|
|
|
|
|
|
31.1
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
31.2
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
32
|
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Filed herewith
|
|
|
|
|
|
|
101
|
|
|
The following materials from Carey Watermark Investors 2 Incorporated’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at December 31, 2015 and 2014, (ii) Consolidated Statements of Operations for the year ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (iii) Consolidated Statements of Comprehensive Loss for the year ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (iv) Consolidated Statements of Equity for the years ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (v) Consolidated Statements of Cash Flows for the year ended December 31, 2015 and Inception (May 22, 2014) through December 31, 2014, (vi) Notes to Consolidated Financial Statements, (vii) Schedule II - Valuation and Qualifying Accounts, (viii) Schedule III — Real Estate and Accumulated Depreciation, and (ix) Notes to Schedule III.
|
|
Filed herewith
|
|
|
|
|
2
|
|
Name of Subsidiary
|
|
Ownership
|
|
State or Country of Incorporation
|
|
CWI 2 Denver Downtown Hotel, LLC
|
|
100
|
%
|
|
Delaware
|
CWI 2 Hotel Operator, Inc.
|
|
100
|
%
|
|
Delaware
|
CWI 2 OP, LP
|
|
100
|
%
|
|
Delaware
|
CWI Key Biscayne Hotel, LLC
|
|
29
|
%
|
|
Delaware
|
CWI Nashville Downtown Hotel, LLC
|
|
100
|
%
|
|
Delaware
|
CWI Sawgrass Holdings, LLC
|
|
50
|
%
|
|
Delaware
|
CWI Sawgrass Hotel, LLC
|
|
50
|
%
|
|
Delaware
|
Denver Downtown 2 Hotel Operator, LLC
|
|
100
|
%
|
|
Delaware
|
GB Key Biscayne Holdings, LLC
|
|
19
|
%
|
|
Delaware
|
GB/JT Hotel Partners, L.P.
|
|
19
|
%
|
|
Delaware
|
GB/JT Management, LLC
|
|
19
|
%
|
|
Delaware
|
Key Biscayne Hotel Operator, Inc.
|
|
19
|
%
|
|
Delaware
|
Nashville Downtown 2 Hotel Operator, LLC
|
|
100
|
%
|
|
Delaware
|
Sawgrass Hotel Operator, Inc.
|
|
50
|
%
|
|
Delaware
|
1.
|
I have reviewed this Annual Report on Form 10-K of Carey Watermark Investors 2 Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this Annual Report on Form 10-K of Carey Watermark Investors 2 Incorporated;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Carey Watermark Investors 2 Incorporated.
|