|
þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
|
|
For the quarterly period ended September 30, 2017
|
|
|
|
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)
|
|
|
|
Page No.
|
PART I — FINANCIAL INFORMATION
|
|
|
Item 1. Financial Statements (Unaudited)
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
Item 4.
Controls and Procedures
|
||
|
|
|
PART II — OTHER INFORMATION
|
|
|
Item 6.
Exhibits
|
||
|
September 30, 2017
|
|
December 31, 2016
|
||||
Assets
|
|
|
|
||||
Investments in real estate:
|
|
|
|
||||
Hotels, at cost
|
$
|
1,447,455
|
|
|
$
|
1,274,747
|
|
Accumulated depreciation
|
(59,600
|
)
|
|
(28,335
|
)
|
||
Net investments in hotels
|
1,387,855
|
|
|
1,246,412
|
|
||
Equity investment in real estate
|
135,276
|
|
|
35,712
|
|
||
Cash
|
66,809
|
|
|
63,245
|
|
||
Restricted cash
|
34,023
|
|
|
36,548
|
|
||
Accounts receivable
|
22,869
|
|
|
12,627
|
|
||
Other assets
|
9,822
|
|
|
13,173
|
|
||
Total assets
|
$
|
1,656,654
|
|
|
$
|
1,407,717
|
|
Liabilities and Equity
|
|
|
|
||||
Non-recourse and limited-recourse debt, net
|
$
|
830,965
|
|
|
$
|
571,935
|
|
Due to related parties and affiliates
|
1,919
|
|
|
231,258
|
|
||
Accounts payable, accrued expenses and other liabilities
|
72,038
|
|
|
47,223
|
|
||
Distributions payable
|
10,604
|
|
|
7,192
|
|
||
Total liabilities
|
915,526
|
|
|
857,608
|
|
||
Commitments and contingencies (
Note 9
)
|
|
|
|
||||
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; 29,183,510 and 22,414,128 shares, respectively, issued and outstanding
|
29
|
|
|
22
|
|
||
Class T common stock, $0.001 par value; 80,000,000 shares authorized; 57,359,586 and 40,447,362 shares, respectively, issued and outstanding
|
57
|
|
|
40
|
|
||
Additional paid-in capital
|
801,355
|
|
|
573,135
|
|
||
Distributions and accumulated losses
|
(88,535
|
)
|
|
(59,115
|
)
|
||
Accumulated other comprehensive income
|
888
|
|
|
896
|
|
||
Total stockholders’ equity
|
713,794
|
|
|
514,978
|
|
||
Noncontrolling interests
|
27,334
|
|
|
35,131
|
|
||
Total equity
|
741,128
|
|
|
550,109
|
|
||
Total liabilities and equity
|
$
|
1,656,654
|
|
|
$
|
1,407,717
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Hotel Revenues
|
|
|
|
|
|
|
|
||||||||
Rooms
|
$
|
61,322
|
|
|
$
|
37,844
|
|
|
$
|
172,102
|
|
|
$
|
79,545
|
|
Food and beverage
|
19,155
|
|
|
13,219
|
|
|
67,797
|
|
|
33,571
|
|
||||
Other operating revenue
|
4,930
|
|
|
3,300
|
|
|
14,373
|
|
|
9,060
|
|
||||
Total Hotel Revenues
|
85,407
|
|
|
54,363
|
|
|
254,272
|
|
|
122,176
|
|
||||
Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Hotel Expenses
|
|
|
|
|
|
|
|
||||||||
Rooms
|
14,306
|
|
|
7,585
|
|
|
39,706
|
|
|
14,970
|
|
||||
Food and beverage
|
15,671
|
|
|
8,893
|
|
|
48,696
|
|
|
20,877
|
|
||||
Other hotel operating expenses
|
1,308
|
|
|
1,202
|
|
|
4,322
|
|
|
3,925
|
|
||||
Sales and marketing
|
8,099
|
|
|
5,367
|
|
|
22,635
|
|
|
11,368
|
|
||||
General and administrative
|
7,688
|
|
|
4,341
|
|
|
22,091
|
|
|
9,439
|
|
||||
Property taxes, insurance, rent and other
|
5,077
|
|
|
2,464
|
|
|
14,190
|
|
|
5,599
|
|
||||
Management fees
|
2,931
|
|
|
1,749
|
|
|
9,005
|
|
|
4,415
|
|
||||
Repairs and maintenance
|
3,020
|
|
|
1,678
|
|
|
8,288
|
|
|
3,639
|
|
||||
Utilities
|
2,410
|
|
|
1,656
|
|
|
6,326
|
|
|
3,556
|
|
||||
Depreciation and amortization
|
11,647
|
|
|
6,824
|
|
|
32,133
|
|
|
14,781
|
|
||||
Total Hotel Expenses
|
72,157
|
|
|
41,759
|
|
|
207,392
|
|
|
92,569
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other Operating Expenses
|
|
|
|
|
|
|
|
||||||||
Asset management fees to affiliate and other expenses
|
2,305
|
|
|
1,452
|
|
|
6,426
|
|
|
3,300
|
|
||||
Acquisition-related expenses
|
—
|
|
|
11,399
|
|
|
4,979
|
|
|
18,936
|
|
||||
Corporate general and administrative expenses
|
1,483
|
|
|
1,257
|
|
|
4,778
|
|
|
3,616
|
|
||||
Hurricane loss
|
3,845
|
|
|
—
|
|
|
3,845
|
|
|
—
|
|
||||
Total Other Operating Expenses
|
7,633
|
|
|
14,108
|
|
|
20,028
|
|
|
25,852
|
|
||||
Operating Income (Loss)
|
5,617
|
|
|
(1,504
|
)
|
|
26,852
|
|
|
3,755
|
|
||||
Other Income and (Expenses)
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(9,522
|
)
|
|
(5,255
|
)
|
|
(25,826
|
)
|
|
(11,468
|
)
|
||||
Equity in (losses) earnings of equity method investments in real estate
|
(36
|
)
|
|
709
|
|
|
1,461
|
|
|
2,324
|
|
||||
Loss on extinguishment of debt (
Note 8
)
|
(256
|
)
|
|
—
|
|
|
(256
|
)
|
|
—
|
|
||||
Other income
|
58
|
|
|
6
|
|
|
135
|
|
|
28
|
|
||||
Total Other Income and (Expenses)
|
(9,756
|
)
|
|
(4,540
|
)
|
|
(24,486
|
)
|
|
(9,116
|
)
|
||||
(Loss) Income from Operations Before Income Taxes
|
(4,139
|
)
|
|
(6,044
|
)
|
|
2,366
|
|
|
(5,361
|
)
|
||||
Provision for income taxes
|
(1,122
|
)
|
|
(1,403
|
)
|
|
(3,518
|
)
|
|
(2,149
|
)
|
||||
Net Loss
|
(5,261
|
)
|
|
(7,447
|
)
|
|
(1,152
|
)
|
|
(7,510
|
)
|
||||
Loss (income) attributable to noncontrolling interests (inclusive of Available Cash Distributions to a related party of $1,894, $1,100, $3,528 and $1,965, respectively)
|
3,776
|
|
|
31
|
|
|
983
|
|
|
(3,156
|
)
|
||||
Net Loss Attributable to CWI 2 Stockholders
|
$
|
(1,485
|
)
|
|
$
|
(7,416
|
)
|
|
$
|
(169
|
)
|
|
$
|
(10,666
|
)
|
|
|
|
|
|
|
|
|
||||||||
Class A Common Stock
|
|
|
|
|
|
|
|
||||||||
Net (loss) income attributable to CWI 2 Stockholders
|
$
|
(472
|
)
|
|
$
|
(2,788
|
)
|
|
$
|
34
|
|
|
$
|
(4,099
|
)
|
Basic and diluted weighted-average shares outstanding
|
28,889,131
|
|
|
20,126,076
|
|
|
27,131,807
|
|
|
17,810,819
|
|
||||
Basic and diluted (loss) income per share
|
$
|
(0.02
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
—
|
|
|
$
|
(0.23
|
)
|
Distributions Declared Per Share
|
$
|
0.1749
|
|
|
$
|
0.1713
|
|
|
$
|
0.5206
|
|
|
$
|
0.4857
|
|
|
|
|
|
|
|
|
|
||||||||
Class T Common Stock
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to CWI 2 Stockholders
|
$
|
(1,013
|
)
|
|
$
|
(4,628
|
)
|
|
$
|
(203
|
)
|
|
$
|
(6,567
|
)
|
Basic and diluted weighted-average shares outstanding
|
57,603,278
|
|
|
32,984,735
|
|
|
53,364,957
|
|
|
27,782,685
|
|
||||
Basic and diluted loss per share
|
$
|
(0.02
|
)
|
|
$
|
(0.14
|
)
|
|
$
|
—
|
|
|
$
|
(0.24
|
)
|
Distributions Declared Per Share
|
$
|
0.1480
|
|
|
$
|
0.1450
|
|
|
$
|
0.4406
|
|
|
$
|
0.4095
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net Loss
|
$
|
(5,261
|
)
|
|
$
|
(7,447
|
)
|
|
$
|
(1,152
|
)
|
|
$
|
(7,510
|
)
|
Other Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Unrealized income (loss) on derivative instruments
|
60
|
|
|
688
|
|
|
—
|
|
|
(1,107
|
)
|
||||
Comprehensive Loss
|
(5,201
|
)
|
|
(6,759
|
)
|
|
(1,152
|
)
|
|
(8,617
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Amounts Attributable to Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||||
Net loss (income)
|
3,776
|
|
|
31
|
|
|
983
|
|
|
(3,156
|
)
|
||||
Unrealized (gain) loss on derivative instruments
|
(3
|
)
|
|
(1
|
)
|
|
(8
|
)
|
|
2
|
|
||||
Comprehensive loss (income) attributable to noncontrolling interests
|
3,773
|
|
|
30
|
|
|
975
|
|
|
(3,154
|
)
|
||||
Comprehensive Loss Attributable to CWI 2 Stockholders
|
$
|
(1,428
|
)
|
|
$
|
(6,729
|
)
|
|
$
|
(177
|
)
|
|
$
|
(11,771
|
)
|
|
CWI 2 Stockholders
|
|
|
|
|
||||||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Distributions
and Accumulated Losses |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total CWI 2
Stockholders’ Equity |
|
Noncontrolling
Interests |
|
Total
Stockholders’ Equity |
||||||||||||||||||||||||
|
Class A
|
|
Class T
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
||||||||||||||||||||||||
Balance at January 1, 2017
|
22,414,128
|
|
|
$
|
22
|
|
|
40,447,362
|
|
|
$
|
40
|
|
|
$
|
573,135
|
|
|
$
|
(59,115
|
)
|
|
$
|
896
|
|
|
$
|
514,978
|
|
|
$
|
35,131
|
|
|
$
|
550,109
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
(169
|
)
|
|
|
|
(169
|
)
|
|
(983
|
)
|
|
(1,152
|
)
|
||||||||||||||
Shares issued, net of offering costs
|
5,826,566
|
|
|
6
|
|
|
16,709,647
|
|
|
17
|
|
|
226,392
|
|
|
|
|
|
|
226,415
|
|
|
|
|
226,415
|
|
|||||||||||
Shares issued to affiliates
|
839,720
|
|
|
1
|
|
|
|
|
|
|
8,984
|
|
|
|
|
|
|
8,985
|
|
|
|
|
8,985
|
|
|||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(6,822
|
)
|
|
(6,822
|
)
|
|||||||||||||||
Purchase of membership interest from noncontrolling interest
|
|
|
|
|
|
|
|
|
(3,524
|
)
|
|
|
|
|
|
(3,524
|
)
|
|
|
|
(3,524
|
)
|
|||||||||||||||
Shares issued under share incentive plans
|
14,071
|
|
|
—
|
|
|
|
|
|
|
172
|
|
|
|
|
|
|
172
|
|
|
|
|
172
|
|
|||||||||||||
Stock-based compensation to directors
|
15,384
|
|
|
—
|
|
|
|
|
|
|
165
|
|
|
|
|
|
|
165
|
|
|
|
|
165
|
|
|||||||||||||
Stock dividends issued
|
230,038
|
|
|
—
|
|
|
434,259
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Distributions declared ($0.5206 and $0.4406 per share to Class A and Class T, respectively)
|
|
|
|
|
|
|
|
|
|
|
(29,251
|
)
|
|
|
|
(29,251
|
)
|
|
|
|
(29,251
|
)
|
|||||||||||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net unrealized (loss) income on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
(8
|
)
|
|
8
|
|
|
—
|
|
||||||||||||||
Repurchase of shares
|
(156,397
|
)
|
|
—
|
|
|
(231,682
|
)
|
|
—
|
|
|
(3,969
|
)
|
|
|
|
|
|
(3,969
|
)
|
|
|
|
(3,969
|
)
|
|||||||||||
Balance at September 30, 2017
|
29,183,510
|
|
|
$
|
29
|
|
|
57,359,586
|
|
|
$
|
57
|
|
|
$
|
801,355
|
|
|
$
|
(88,535
|
)
|
|
$
|
888
|
|
|
$
|
713,794
|
|
|
$
|
27,334
|
|
|
$
|
741,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Balance at January 1, 2016
|
10,792,296
|
|
|
$
|
11
|
|
|
14,983,012
|
|
|
$
|
15
|
|
|
$
|
228,401
|
|
|
$
|
(15,109
|
)
|
|
$
|
(94
|
)
|
|
$
|
213,224
|
|
|
$
|
32,968
|
|
|
$
|
246,192
|
|
Net (loss) income
|
|
|
|
|
|
|
|
|
|
|
(10,666
|
)
|
|
|
|
(10,666
|
)
|
|
3,156
|
|
|
(7,510
|
)
|
||||||||||||||
Shares issued, net of offering costs
|
9,438,322
|
|
|
9
|
|
|
19,358,017
|
|
|
19
|
|
|
265,321
|
|
|
|
|
|
|
265,349
|
|
|
|
|
265,349
|
|
|||||||||||
Shares issued to affiliates
|
248,682
|
|
|
1
|
|
|
|
|
|
|
2,609
|
|
|
|
|
|
|
2,610
|
|
|
|
|
2,610
|
|
|||||||||||||
Contributions from noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
4,000
|
|
|
4,000
|
|
|||||||||||||||
Distributions to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
(3,262
|
)
|
|
(3,262
|
)
|
|||||||||||||||
Shares issued under share incentive plans
|
6,656
|
|
|
—
|
|
|
|
|
|
|
106
|
|
|
|
|
|
|
106
|
|
|
|
|
106
|
|
|||||||||||||
Stock-based compensation to directors
|
10,000
|
|
|
—
|
|
|
|
|
|
|
105
|
|
|
|
|
|
|
105
|
|
|
|
|
105
|
|
|||||||||||||
Stock dividends issued
|
96,288
|
|
|
—
|
|
|
138,922
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|
|
|
—
|
|
||||||||||||
Distributions declared ($0.4857 and $0.4095 per share to Class A and Class T, respectively)
|
|
|
|
|
|
|
|
|
|
|
(15,788
|
)
|
|
|
|
(15,788
|
)
|
|
|
|
(15,788
|
)
|
|||||||||||||||
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Net unrealized loss on derivative instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,105
|
)
|
|
(1,105
|
)
|
|
(2
|
)
|
|
(1,107
|
)
|
||||||||||||||
Repurchase of shares
|
(28,744
|
)
|
|
—
|
|
|
(37,328
|
)
|
|
—
|
|
|
(661
|
)
|
|
|
|
|
|
(661
|
)
|
|
|
|
(661
|
)
|
|||||||||||
Balance at September 30, 2016
|
20,563,500
|
|
|
$
|
21
|
|
|
34,442,623
|
|
|
$
|
34
|
|
|
$
|
495,881
|
|
|
$
|
(41,563
|
)
|
|
$
|
(1,199
|
)
|
|
$
|
453,174
|
|
|
$
|
36,860
|
|
|
$
|
490,034
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash Flows — Operating Activities
|
|
|
|
||||
Net loss
|
$
|
(1,152
|
)
|
|
$
|
(7,510
|
)
|
Adjustments to net loss:
|
|
|
|
||||
Depreciation and amortization
|
32,133
|
|
|
14,781
|
|
||
Asset management fees to affiliates settled in shares
|
6,157
|
|
|
2,914
|
|
||
Hurricane loss
|
3,845
|
|
|
—
|
|
||
Acquisition fees to affiliates settled in shares
|
3,097
|
|
|
—
|
|
||
Amortization of deferred key money, deferred financing costs and other
|
582
|
|
|
266
|
|
||
Amortization of stock-based compensation
|
418
|
|
|
247
|
|
||
Loss on extinguishment of debt (
Note 8
)
|
254
|
|
|
—
|
|
||
Equity in (earnings) losses of equity method investment in real estate in excess of distributions received
|
(152
|
)
|
|
36
|
|
||
(Decrease) increase in due to related parties and affiliates
|
(7,231
|
)
|
|
612
|
|
||
Receipt of key money and other deferred incentive payments
|
2,688
|
|
|
3,063
|
|
||
Net changes in other assets and liabilities
|
170
|
|
|
3,475
|
|
||
Net Cash Provided by Operating Activities
|
40,809
|
|
|
17,884
|
|
||
|
|
|
|
||||
Cash Flows — Investing Activities
|
|
|
|
||||
Acquisitions of hotels
|
(168,884
|
)
|
|
(604,190
|
)
|
||
Purchase of equity interest (
Note 5
)
|
(99,386
|
)
|
|
—
|
|
||
Funds released from escrow
|
58,925
|
|
|
39,280
|
|
||
Funds placed in escrow
|
(57,332
|
)
|
|
(57,886
|
)
|
||
Capital expenditures
|
(14,568
|
)
|
|
(14,944
|
)
|
||
Deposits released for hotel investments
|
1,521
|
|
|
16,701
|
|
||
Deposits for hotel investments
|
—
|
|
|
(12,681
|
)
|
||
Distributions received from equity investment in excess of equity income
|
—
|
|
|
1,945
|
|
||
Capital contributions to equity investment in real estate
|
—
|
|
|
(125
|
)
|
||
Net Cash Used in Investing Activities
|
(279,724
|
)
|
|
(631,900
|
)
|
||
|
|
|
|
||||
Cash Flows — Financing Activities
|
|
|
|
||||
Proceeds from mortgage financing
|
301,900
|
|
|
366,800
|
|
||
Proceeds from issuance of shares, net of offering costs
|
233,410
|
|
|
275,500
|
|
||
Repayment of notes payable to affiliate
|
(210,000
|
)
|
|
(20,000
|
)
|
||
Scheduled payments and prepayments of mortgage principal
|
(42,000
|
)
|
|
—
|
|
||
Distributions paid
|
(25,839
|
)
|
|
(11,320
|
)
|
||
Distributions to noncontrolling interests
|
(6,822
|
)
|
|
(3,262
|
)
|
||
Repurchase of shares
|
(3,969
|
)
|
|
(661
|
)
|
||
Purchase of membership interest from noncontrolling interest (
Note 10
)
|
(3,524
|
)
|
|
—
|
|
||
Deposits released for mortgage financing
|
2,235
|
|
|
1,835
|
|
||
Deferred financing costs
|
(2,090
|
)
|
|
(3,502
|
)
|
||
Deposits for mortgage financing
|
(725
|
)
|
|
(1,835
|
)
|
||
Withholding on restricted stock units
|
(81
|
)
|
|
(36
|
)
|
||
Purchase of interest rate cap
|
(16
|
)
|
|
(92
|
)
|
||
Proceeds from notes payable to affiliate
|
—
|
|
|
20,000
|
|
||
Contributions from noncontrolling interests
|
—
|
|
|
4,000
|
|
||
Net Cash Provided by Financing Activities
|
242,479
|
|
|
627,427
|
|
||
|
|
|
|
||||
Change in Cash During the Period
|
|
|
|
||||
Net increase in cash
|
3,564
|
|
|
13,411
|
|
||
Cash, beginning of period
|
63,245
|
|
|
51,081
|
|
||
Cash, end of period
|
$
|
66,809
|
|
|
$
|
64,492
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Net investments in hotels
|
$
|
581,348
|
|
|
$
|
657,517
|
|
Total assets
|
624,520
|
|
|
706,115
|
|
||
|
|
|
|
||||
Non-recourse and limited-recourse debt, net
|
$
|
320,228
|
|
|
$
|
218,843
|
|
Total liabilities
|
352,022
|
|
|
249,637
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Amounts Included in the Consolidated Statements of Operations
|
|
|
|
|
|
|
|
||||||||
Asset management fees
|
$
|
2,188
|
|
|
$
|
1,302
|
|
|
$
|
6,157
|
|
|
$
|
2,914
|
|
Acquisition fees
|
—
|
|
|
9,995
|
|
|
4,415
|
|
|
16,156
|
|
||||
Available Cash Distributions
|
1,894
|
|
|
1,100
|
|
|
3,528
|
|
|
1,965
|
|
||||
Personnel and overhead reimbursements
|
872
|
|
|
574
|
|
|
2,628
|
|
|
1,763
|
|
||||
Interest expense
|
—
|
|
|
—
|
|
|
332
|
|
|
18
|
|
||||
Accretion of interest on annual distribution and shareholder servicing fee
|
—
|
|
|
60
|
|
|
198
|
|
|
172
|
|
||||
|
$
|
4,954
|
|
|
$
|
13,031
|
|
|
$
|
17,258
|
|
|
$
|
22,988
|
|
|
|
|
|
|
|
|
|
||||||||
Other Transaction Fees Incurred
|
|
|
|
|
|
|
|
||||||||
Selling commissions and dealer manager fees
|
$
|
367
|
|
|
$
|
3,886
|
|
|
$
|
13,199
|
|
|
$
|
17,747
|
|
Annual distribution and shareholder servicing fee
(a)
|
—
|
|
|
2,013
|
|
|
8,439
|
|
|
8,799
|
|
||||
Capitalized acquisition fees for equity method investment
(b)
(
Note 5
)
|
6,195
|
|
|
—
|
|
|
6,195
|
|
|
—
|
|
||||
Organization and offering costs
|
224
|
|
|
554
|
|
|
1,422
|
|
|
2,461
|
|
||||
Capitalized loan refinancing fees
|
280
|
|
|
—
|
|
|
280
|
|
|
—
|
|
||||
Capitalized refinancing fees for equity method investment
|
—
|
|
|
125
|
|
|
—
|
|
|
125
|
|
||||
|
$
|
7,066
|
|
|
$
|
6,578
|
|
|
$
|
29,535
|
|
|
$
|
29,132
|
|
(a)
|
Beginning with the payment by us for the third quarter of 2017, which was paid in October 2017, the distribution and shareholder servicing fee will be paid directly to selected dealers rather than through Carey Financial, LLC, or Carey Financial, a subsidiary of WPC and the former dealer manager of our offering. There is no change in the amount of distribution and shareholder servicing fees that we incur.
|
(b)
|
Our Advisor elected to receive
50%
of the acquisition fee related to our investment in the Ritz-Carlton Bacara, Santa Barbara Venture in shares of our Class A common stock and
50%
in cash.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Amounts Due to Related Parties and Affiliates
|
|
|
|
||||
To our Advisor:
|
|
|
|
||||
Reimbursable costs
|
$
|
869
|
|
|
$
|
676
|
|
Asset management fees
|
759
|
|
|
489
|
|
||
Organization and offering costs
|
51
|
|
|
463
|
|
||
Note payable to WPC
|
—
|
|
|
210,033
|
|
||
Acquisition fee payable
|
—
|
|
|
7,243
|
|
||
To Others:
|
|
|
|
||||
Due to CWI 1
|
240
|
|
|
389
|
|
||
Due to Carey Financial (Annual distribution and shareholder servicing fee)
(a)
|
—
|
|
|
11,919
|
|
||
Due to Carey Financial (Selling commissions and dealer manager fees)
|
—
|
|
|
46
|
|
||
|
$
|
1,919
|
|
|
$
|
231,258
|
|
(a)
|
Beginning with the payment for the third quarter of 2017, which was paid in October 2017, the distribution and shareholder servicing fee is paid directly to selected dealers rather than through Carey Financial. Accordingly, at September 30, 2017, the accrual for the distribution and shareholder servicing fee is included in Accounts payable, accrued expenses and other liabilities in the consolidated financial statements.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Buildings
|
$
|
1,091,522
|
|
|
$
|
969,661
|
|
Land
|
236,078
|
|
|
211,278
|
|
||
Furniture, fixtures and equipment
|
89,431
|
|
|
67,541
|
|
||
Building and site improvements
|
27,213
|
|
|
10,279
|
|
||
Construction in progress
|
3,211
|
|
|
15,988
|
|
||
Hotels, at cost
|
1,447,455
|
|
|
1,274,747
|
|
||
Less: Accumulated depreciation
|
(59,600
|
)
|
|
(28,335
|
)
|
||
Net investments in hotels
|
$
|
1,387,855
|
|
|
$
|
1,246,412
|
|
|
Charlotte Marriott City Center
(a)
|
||
Acquisition Date
|
June 1, 2017
|
||
Cash consideration
|
$
|
168,884
|
|
Assets acquired at fair value:
|
|
||
Building
|
$
|
127,286
|
|
Land
|
24,800
|
|
|
Furniture, fixtures and equipment
|
17,380
|
|
|
Accounts receivable
|
541
|
|
|
Other assets
|
368
|
|
|
Liabilities assumed at fair value:
|
|
||
Accounts payable, accrued expenses and other liabilities
|
(1,491
|
)
|
|
Net assets acquired at fair value
|
$
|
168,884
|
|
|
From Acquisition Date Through September 30, 2017
|
||
Revenues
|
$
|
12,445
|
|
Income from operations before income taxes
|
$
|
2,803
|
|
(a)
|
The purchase price was allocated to the assets acquired and liabilities assumed based upon their preliminary fair values. The information in this table is based on the current best estimates of management. We are in the process of finalizing our assessment of the fair value of the assets acquired and liabilities assumed. Accordingly, the fair value of these assets acquired and liabilities assumed is subject to change.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Pro forma total revenues
|
$
|
85,407
|
|
|
$
|
66,685
|
|
|
$
|
270,096
|
|
|
$
|
205,377
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma net (loss) income
|
$
|
(5,261
|
)
|
|
$
|
908
|
|
|
$
|
4,733
|
|
|
$
|
6,401
|
|
Pro forma loss (income) attributable to noncontrolling interests
|
3,776
|
|
|
31
|
|
|
983
|
|
|
(3,156
|
)
|
||||
Pro forma net (loss) income attributable to CWI 2 stockholders
|
$
|
(1,485
|
)
|
|
$
|
939
|
|
|
$
|
5,716
|
|
|
$
|
3,245
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma (loss) income per Class A share:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income attributable to CWI 2 stockholders
|
$
|
(472
|
)
|
|
$
|
490
|
|
|
$
|
2,189
|
|
|
$
|
2,017
|
|
Basic and diluted pro forma weighted-average shares outstanding
|
28,889,131
|
|
|
31,802,914
|
|
|
30,761,196
|
|
|
40,003,488
|
|
||||
Basic and diluted pro forma (loss) income per share
|
$
|
(0.02
|
)
|
|
$
|
0.02
|
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
||||||||
Pro forma (loss) income per Class T share:
|
|
|
|
|
|
|
|
||||||||
Net (loss) income attributable to CWI 2 stockholders
|
$
|
(1,013
|
)
|
|
$
|
449
|
|
|
$
|
3,527
|
|
|
$
|
1,228
|
|
Basic and diluted pro forma weighted-average shares outstanding
|
57,603,278
|
|
|
32,984,735
|
|
|
53,364,957
|
|
|
27,782,685
|
|
||||
Basic and diluted pro forma (loss) income per share
|
$
|
(0.02
|
)
|
|
$
|
0.01
|
|
|
$
|
0.07
|
|
|
$
|
0.04
|
|
Unconsolidated Hotels
|
|
State
|
|
Number
of Rooms
|
|
% Owned
|
|
Our Initial
Investment
(a)
|
|
Acquisition Date
|
|
Hotel Type
|
|
Carrying Value at
|
||||||||||
|
|
|
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||||||||||||
Ritz-Carlton Key Biscayne Venture
(b) (c)
|
|
FL
|
|
458
|
|
|
19.3
|
%
|
|
$
|
37,559
|
|
|
5/29/2015
|
|
Resort
|
|
$
|
36,662
|
|
|
$
|
35,712
|
|
Ritz-Carlton Bacara, Santa Barbara Venture
(d) (e)
|
|
CA
|
|
358
|
|
|
60.0
|
%
|
|
99,386
|
|
|
9/28/2017
|
|
Resort
|
|
98,614
|
|
|
—
|
|
|||
|
|
|
|
816
|
|
|
|
|
$
|
136,945
|
|
|
|
|
|
|
$
|
135,276
|
|
|
$
|
35,712
|
|
(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. The number of rooms presented includes
156
condo-hotel units that participate in the resort rental program. This investment is considered a VIE (
Note 2
). We do not consolidate this entity because we are not the primary beneficiary and the nature of our involvement in the activities of the entity allows us to exercise significant influence but does not give us power over decisions that significantly affect the economic performance of the entity.
|
(c)
|
We received cash distributions of
$1.3 million
from this investment during the
nine months ended September 30, 2017
.
No
cash distributions were received from this investment during the three months ended September 30, 2017.
|
(d)
|
This investment represents a tenancy-in-common interest; the remaining
40%
interest is owned by CWI 1.
|
(e)
|
No
cash distributions were received from this investment during the three or
nine months ended September 30, 2017
.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Unconsolidated Hotels
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Ritz-Carlton Key Biscayne Venture
|
|
$
|
763
|
|
|
$
|
709
|
|
|
$
|
2,260
|
|
|
$
|
2,324
|
|
Ritz-Carlton Bacara, Santa Barbara Venture
|
|
(799
|
)
|
|
—
|
|
|
(799
|
)
|
|
—
|
|
||||
Total equity in (losses) earnings of equity method investments in real estate
|
|
$
|
(36
|
)
|
|
$
|
709
|
|
|
$
|
1,461
|
|
|
$
|
2,324
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Real estate, net
|
$
|
654,025
|
|
|
$
|
291,015
|
|
Other assets
|
61,893
|
|
|
47,642
|
|
||
Total assets
|
715,918
|
|
|
338,657
|
|
||
Debt
|
416,646
|
|
|
190,039
|
|
||
Other liabilities
|
24,622
|
|
|
20,004
|
|
||
Total liabilities
|
441,268
|
|
|
210,043
|
|
||
Members’ equity
|
$
|
274,650
|
|
|
$
|
128,614
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues
|
$
|
13,612
|
|
|
$
|
12,559
|
|
|
$
|
62,014
|
|
|
$
|
63,834
|
|
Expenses
|
(18,326
|
)
|
|
(16,578
|
)
|
|
(63,037
|
)
|
|
(63,462
|
)
|
||||
Hurricane loss
|
(3,333
|
)
|
|
—
|
|
|
(3,333
|
)
|
|
—
|
|
||||
Net (loss) income attributable to equity method investments
|
$
|
(8,047
|
)
|
|
$
|
(4,019
|
)
|
|
$
|
(4,356
|
)
|
|
$
|
372
|
|
Derivatives Designated as Hedging Instruments
|
|
|
|
Asset Derivatives Fair Value at
|
||||||
|
Balance Sheet Location
|
|
September 30, 2017
|
|
December 31, 2016
|
|||||
Interest rate swap
|
|
Other assets
|
|
$
|
983
|
|
|
$
|
816
|
|
Interest rate caps
|
|
Other assets
|
|
46
|
|
|
279
|
|
||
|
|
|
|
$
|
1,029
|
|
|
$
|
1,095
|
|
|
|
Number of
|
|
Notional
|
|
Fair Value at
|
|||||
Interest Rate Derivatives
|
|
Instruments
|
|
Amount
|
|
September 30, 2017
|
|||||
Interest rate swap
|
|
1
|
|
|
$
|
100,000
|
|
|
$
|
983
|
|
Interest rate caps
|
|
7
|
|
|
290,100
|
|
|
46
|
|
||
|
|
|
|
|
|
$
|
1,029
|
|
|
|
|
|
|
|
|
|
Carrying Amount at
|
||||||
Consolidated Hotels
|
|
Interest Rate
|
|
Rate Type
|
|
Current Maturity Date
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
San Jose Marriott
(a) (b)
|
|
3.98%
|
|
Variable
|
|
7/2019
|
|
$
|
87,598
|
|
|
$
|
87,429
|
|
Renaissance Atlanta Midtown Hotel
(a) (b) (c)
|
|
4.24%, 11.24%
|
|
Variable
|
|
8/2019
|
|
46,862
|
|
|
46,611
|
|
||
Marriott Sawgrass Golf Resort & Spa
(a)
|
|
5.09%
|
|
Variable
|
|
11/2019
|
|
78,000
|
|
|
78,000
|
|
||
Seattle Marriott Bellevue
(a) (d) (e)
|
|
3.88%
|
|
Variable
|
|
1/2020
|
|
99,386
|
|
|
99,188
|
|
||
Le Méridien Arlington
(a) (d)
|
|
3.98%
|
|
Variable
|
|
6/2020
|
|
34,609
|
|
|
34,502
|
|
||
Ritz-Carlton San Francisco
|
|
4.59%
|
|
Fixed
|
|
2/2022
|
|
142,842
|
|
|
—
|
|
||
Charlotte Marriott City Center
(f)
|
|
4.53%
|
|
Fixed
|
|
6/2022
|
|
102,301
|
|
|
—
|
|
||
Courtyard Nashville Downtown
|
|
4.15%
|
|
Fixed
|
|
9/2022
|
|
54,763
|
|
|
41,656
|
|
||
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
|
3.90%
|
|
Fixed
|
|
12/2022
|
|
99,760
|
|
|
99,725
|
|
||
San Diego Marriott La Jolla
|
|
4.13%
|
|
Fixed
|
|
8/2023
|
|
84,844
|
|
|
84,824
|
|
||
|
|
|
|
|
|
|
|
$
|
830,965
|
|
|
$
|
571,935
|
|
(a)
|
These mortgage loans have variable interest rates, which have effectively been capped or converted to fixed rates through the use of interest rate caps or swaps (
Note 7
). The interest rates presented for these mortgage loans reflect the rates in effect at
September 30, 2017
through the use of an interest rate cap or swap, as applicable.
|
(b)
|
These mortgage loans have
two
one-year extension options, which are subject to certain conditions. The maturity dates in the table do not reflect the extension options.
|
(c)
|
The debt is comprised of a
$34.0 million
senior mortgage loan with a floating annual interest rate of LIBOR plus
3.0%
and a
$13.5 million
mezzanine loan with a floating annual interest rate of LIBOR plus
10.0%
, both subject to interest rate caps. Both loans have a maturity date of August 30, 2019.
|
(d)
|
These mortgage loans each have a one-year extension option, which are subject to certain conditions. The maturity dates in the table do not reflect the extension option.
|
(e)
|
At December 31, 2016, this loan was limited-recourse up to a maximum of
$15.0 million
, which would terminate upon satisfaction of certain conditions as described in the loan agreement. During the first quarter of 2017, these conditions were met so that the limited-recourse provisions no longer apply, and as a result, this loan was considered to be a non-recourse loan at
September 30, 2017
.
|
(f)
|
At closing, we deposited
$10.0 million
of the
$103.0 million
mortgage loan proceeds with the lender to be held as additional collateral for the loan, which was classified as Restricted cash on our consolidated balance sheet. During the third quarter of 2017, upon reaching a certain NOI, as further described in the loan agreement, the
$10.0 million
was released back to us and reclassified out of Restricted cash on our consolidated balance sheet.
|
Years Ending December 31,
|
|
Total
|
||
2017 (remainder)
|
|
$
|
—
|
|
2018
|
|
—
|
|
|
2019
|
|
218,395
|
|
|
2020
|
|
137,056
|
|
|
2021
|
|
4,498
|
|
|
Thereafter through 2023
|
|
475,451
|
|
|
|
|
835,400
|
|
|
Unamortized deferred financing costs
|
|
(4,435
|
)
|
|
Total
|
|
$
|
830,965
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Capital commitments
|
|
$
|
42,776
|
|
|
$
|
48,327
|
|
Less: amounts paid
|
|
(29,959
|
)
|
|
(22,981
|
)
|
||
Unpaid commitments
|
|
12,817
|
|
|
25,346
|
|
||
Less: amounts in restricted cash designated for renovations
|
|
(10,247
|
)
|
|
(17,582
|
)
|
||
Unfunded commitments
(a)
|
|
$
|
2,570
|
|
|
$
|
7,764
|
|
(a)
|
Of our unfunded commitments at
September 30, 2017
and
December 31, 2016
, approximately
$2.4 million
and
$6.2 million
, respectively, of unrestricted cash on our balance sheet was designated for renovations.
|
|
Three Months Ended September 30, 2017
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||
|
Basic and Diluted Weighted-Average
Shares Outstanding |
|
Allocation of Loss
|
|
Basic and Diluted Loss
Per Share |
|
Basic and Diluted Weighted-Average
Shares Outstanding |
|
Allocation of Loss
|
|
Basic and Diluted Loss Per Share
|
||||||||||
Class A common stock
|
28,889,131
|
|
|
$
|
(472
|
)
|
|
$
|
(0.02
|
)
|
|
20,126,076
|
|
|
$
|
(2,788
|
)
|
|
$
|
(0.14
|
)
|
Class T common stock
|
57,603,278
|
|
|
(1,013
|
)
|
|
(0.02
|
)
|
|
32,984,735
|
|
|
(4,628
|
)
|
|
(0.14
|
)
|
||||
Net loss attributable to CWI 2 stockholders
|
|
|
$
|
(1,485
|
)
|
|
|
|
|
|
$
|
(7,416
|
)
|
|
|
|
Nine Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||
|
Basic and Diluted Weighted-Average
Shares Outstanding |
|
Allocation of Income (Loss)
|
|
Basic and Diluted Income (Loss)
Per Share |
|
Basic and Diluted Weighted-Average
Shares Outstanding |
|
Allocation of Loss
|
|
Basic and Diluted Loss Per Share
|
||||||||||
Class A common stock
|
27,131,807
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
17,810,819
|
|
|
$
|
(4,099
|
)
|
|
$
|
(0.23
|
)
|
Class T common stock
|
53,364,957
|
|
|
(203
|
)
|
|
—
|
|
|
27,782,685
|
|
|
(6,567
|
)
|
|
(0.24
|
)
|
||||
Net loss attributable to CWI 2 stockholders
|
|
|
$
|
(169
|
)
|
|
|
|
|
|
$
|
(10,666
|
)
|
|
|
|
|
Three Months Ended September 30,
|
||||||
Gains and Losses on Derivative Instruments
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
831
|
|
|
$
|
(1,886
|
)
|
Other comprehensive income before reclassifications
|
|
38
|
|
|
498
|
|
||
Amounts reclassified from accumulated other comprehensive income to:
|
|
|
|
|
||||
Interest expense
|
|
22
|
|
|
190
|
|
||
Total
|
|
22
|
|
|
190
|
|
||
Net current period other comprehensive income
|
|
60
|
|
|
688
|
|
||
Net current period other comprehensive gain attributable to noncontrolling interests
|
|
(3
|
)
|
|
(1
|
)
|
||
Ending balance
|
|
$
|
888
|
|
|
$
|
(1,199
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
Gains and Losses on Derivative Instruments
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
896
|
|
|
$
|
(94
|
)
|
Other comprehensive loss before reclassifications
|
|
(210
|
)
|
|
(1,651
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss to:
|
|
|
|
|
||||
Interest expense
|
|
210
|
|
|
544
|
|
||
Total
|
|
210
|
|
|
544
|
|
||
Net current period other comprehensive loss
|
|
—
|
|
|
(1,107
|
)
|
||
Net current period other comprehensive (gain) loss attributable to noncontrolling interests
|
|
(8
|
)
|
|
2
|
|
||
Ending balance
|
|
$
|
888
|
|
|
$
|
(1,199
|
)
|
|
|
Class A common stock
|
|
Class T common stock
|
||||||||||||||||||||
Record dates
|
|
Cash
|
|
Shares
|
|
Total
|
|
Cash
|
|
Shares
|
|
Total
|
||||||||||||
July 1, 2017 to September 30, 2017
|
|
$
|
0.0015323
|
|
|
$
|
0.0003687
|
|
|
$
|
0.0019010
|
|
|
$
|
0.0012405
|
|
|
$
|
0.0003687
|
|
|
$
|
0.0016092
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Hotel revenues
|
$
|
85,407
|
|
|
$
|
54,363
|
|
|
$
|
254,272
|
|
|
$
|
122,176
|
|
Hurricane loss
|
3,845
|
|
|
—
|
|
|
3,845
|
|
|
|
|||||
Acquisition-related expenses
|
—
|
|
|
11,399
|
|
|
4,979
|
|
|
18,936
|
|
||||
Net loss attributable to CWI 2 stockholders
|
(1,485
|
)
|
|
(7,416
|
)
|
|
(169
|
)
|
|
(10,666
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Cash distributions paid
|
10,202
|
|
|
5,566
|
|
|
25,839
|
|
|
11,320
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net cash provided by operating activities
|
|
|
|
|
40,809
|
|
|
17,884
|
|
||||||
Net cash used in investing activities
|
|
|
|
|
(279,724
|
)
|
|
(631,900
|
)
|
||||||
Net cash provided by financing activities
|
|
|
|
|
242,479
|
|
|
627,427
|
|
||||||
|
|
|
|
|
|
|
|
||||||||
Supplemental Financial Measures:
(a)
|
|
|
|
|
|
|
|
||||||||
FFO attributable to CWI 2 stockholders
|
9,342
|
|
|
(1,358
|
)
|
|
29,397
|
|
|
2,597
|
|
||||
MFFO attributable to CWI 2 stockholders
|
11,504
|
|
|
9,645
|
|
|
36,346
|
|
|
21,078
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated Hotel Operating Statistics
|
|
|
|
|
|
|
|
||||||||
Occupancy
|
79.5
|
%
|
|
81.0
|
%
|
|
79.8
|
%
|
|
79.4
|
%
|
||||
ADR
|
$
|
231.99
|
|
|
$
|
204.31
|
|
|
$
|
234.49
|
|
|
$
|
203.58
|
|
RevPAR
|
184.38
|
|
|
165.57
|
|
|
187.16
|
|
|
161.63
|
|
(a)
|
We consider the performance metrics listed above, including funds from (used in) operations, or FFO, and modified funds from operations, or MFFO, which are supplemental measures that are not defined by GAAP, or non-GAAP measures, to be important measures in the evaluation of our results of operations 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 September 30, 2017
(a)
|
||
Consolidated Hotels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
2015 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Marriott Sawgrass Golf Resort & Spa
(b)
|
|
FL
|
|
514
|
|
50%
|
|
$
|
24,764
|
|
|
4/1/2015
|
|
Resort
|
|
Completed
|
Courtyard Nashville Downtown
|
|
TN
|
|
192
|
|
100%
|
|
58,498
|
|
|
5/1/2015
|
|
Select-Service
|
|
Completed
|
|
Embassy Suites by Hilton Denver-Downtown/Convention Center
|
|
CO
|
|
403
|
|
100%
|
|
168,809
|
|
|
11/4/2015
|
|
Full-Service
|
|
Completed
|
|
2016 Acquisitions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Seattle Marriott Bellevue
|
|
WA
|
|
384
|
|
95.4%
|
|
175,921
|
|
|
1/22/2016
|
|
Full-Service
|
|
None planned
|
|
Le Méridien Arlington
|
|
VA
|
|
154
|
|
100%
|
|
54,891
|
|
|
6/28/2016
|
|
Full-Service
|
|
Completed
|
|
San Jose Marriott
|
|
CA
|
|
510
|
|
100%
|
|
153,814
|
|
|
7/13/2016
|
|
Full-Service
|
|
Planned future
|
|
San Diego Marriott La Jolla
|
|
CA
|
|
372
|
|
100%
|
|
136,782
|
|
|
7/21/2016
|
|
Full-Service
|
|
Planned future
|
|
Renaissance Atlanta Midtown Hotel
|
|
GA
|
|
304
|
|
100%
|
|
78,782
|
|
|
8/30/2016
|
|
Full-Service
|
|
Planned future
|
|
Ritz-Carlton San Francisco
|
|
CA
|
|
336
|
|
100%
|
|
272,207
|
|
|
12/30/2016
|
|
Full-Service
|
|
None planned
|
|
2017 Acquisition
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Charlotte Marriott City Center
|
|
NC
|
|
446
|
|
100%
|
|
168,884
|
|
|
6/1/2017
|
|
Full-Service
|
|
None planned
|
|
|
|
|
|
3,615
|
|
|
|
$
|
1,293,352
|
|
|
|
|
|
|
|
Unconsolidated Hotels
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Ritz-Carlton Key Biscayne
(a) (c)
|
|
FL
|
|
458
|
|
19.3%
|
|
$
|
37,559
|
|
|
5/29/2015
|
|
Resort
|
|
Completed
|
Ritz-Carlton Bacara, Santa Barbara
(d)
|
|
CA
|
|
358
|
|
60%
|
|
99,386
|
|
|
9/28/2017
|
|
Resort
|
|
Planned future
|
|
|
|
|
|
816
|
|
|
|
$
|
136,945
|
|
|
|
|
|
|
|
(a)
|
Status excludes any renovation work to be undertaken as a result of Hurricane Irma.
|
(b)
|
The remaining 50% interest in this venture is owned by CWI 1.
|
(c)
|
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
156
condo-hotel units that participate in the resort rental program.
|
(d)
|
This investment represents a tenancy-in-common interest; the remaining 40% interest is owned by CWI 1.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
|
2017
|
|
2016
|
|
Change
|
|
2017
|
|
2016
|
|
Change
|
||||||||||||
Hotel Revenues
|
|
$
|
85,407
|
|
|
$
|
54,363
|
|
|
$
|
31,044
|
|
|
$
|
254,272
|
|
|
$
|
122,176
|
|
|
$
|
132,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Hotel Expenses
|
|
72,157
|
|
|
41,759
|
|
|
30,398
|
|
|
207,392
|
|
|
92,569
|
|
|
114,823
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asset management fees to affiliate and other expenses
|
|
2,305
|
|
|
1,452
|
|
|
853
|
|
|
6,426
|
|
|
3,300
|
|
|
3,126
|
|
||||||
Acquisition-related expenses
|
|
—
|
|
|
11,399
|
|
|
(11,399
|
)
|
|
4,979
|
|
|
18,936
|
|
|
(13,957
|
)
|
||||||
Corporate general and administrative expenses
|
|
1,483
|
|
|
1,257
|
|
|
226
|
|
|
4,778
|
|
|
3,616
|
|
|
1,162
|
|
||||||
Hurricane loss
|
|
3,845
|
|
|
—
|
|
|
3,845
|
|
|
3,845
|
|
|
—
|
|
|
3,845
|
|
||||||
Total Other Operating Expenses
|
|
7,633
|
|
|
14,108
|
|
|
(6,475
|
)
|
|
20,028
|
|
|
25,852
|
|
|
(5,824
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Income (Loss)
|
|
5,617
|
|
|
(1,504
|
)
|
|
7,121
|
|
|
26,852
|
|
|
3,755
|
|
|
23,097
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other Income and (Expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
|
(9,522
|
)
|
|
(5,255
|
)
|
|
(4,267
|
)
|
|
(25,826
|
)
|
|
(11,468
|
)
|
|
(14,358
|
)
|
||||||
Equity in (losses) earnings of equity method investment in real estate
|
|
(36
|
)
|
|
709
|
|
|
(745
|
)
|
|
1,461
|
|
|
2,324
|
|
|
(863
|
)
|
||||||
Loss on extinguishment of debt (
Note 8
)
|
|
(256
|
)
|
|
—
|
|
|
(256
|
)
|
|
(256
|
)
|
|
—
|
|
|
(256
|
)
|
||||||
Other income
|
|
58
|
|
|
6
|
|
|
52
|
|
|
135
|
|
|
28
|
|
|
107
|
|
||||||
Total Other Income and (Expenses)
|
|
(9,756
|
)
|
|
(4,540
|
)
|
|
(5,216
|
)
|
|
(24,486
|
)
|
|
(9,116
|
)
|
|
(15,370
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) Income from Operations Before Income Taxes
|
|
(4,139
|
)
|
|
(6,044
|
)
|
|
1,905
|
|
|
2,366
|
|
|
(5,361
|
)
|
|
7,727
|
|
||||||
Provision for income taxes
|
|
(1,122
|
)
|
|
(1,403
|
)
|
|
281
|
|
|
(3,518
|
)
|
|
(2,149
|
)
|
|
(1,369
|
)
|
||||||
Net Loss
|
|
(5,261
|
)
|
|
(7,447
|
)
|
|
2,186
|
|
|
(1,152
|
)
|
|
(7,510
|
)
|
|
6,358
|
|
||||||
Loss (income) attributable to noncontrolling interests
|
|
3,776
|
|
|
31
|
|
|
3,745
|
|
|
983
|
|
|
(3,156
|
)
|
|
4,139
|
|
||||||
Net Loss Attributable to CWI 2 Stockholders
|
|
$
|
(1,485
|
)
|
|
$
|
(7,416
|
)
|
|
$
|
5,931
|
|
|
$
|
(169
|
)
|
|
$
|
(10,666
|
)
|
|
$
|
10,497
|
|
Supplemental financial measure:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
MFFO Attributable to CWI 2 Stockholders
|
|
$
|
11,504
|
|
|
$
|
9,645
|
|
|
$
|
1,859
|
|
|
$
|
36,346
|
|
|
$
|
21,078
|
|
|
$
|
15,268
|
|
(a)
|
We consider MFFO, a non-GAAP measure, to be an important metric in the evaluation of our results of operations 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 definition of non-GAAP measures and reconciliations to their most directly comparable GAAP measures.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Same Store Hotels
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Occupancy Rate
|
|
78.0
|
%
|
|
74.5
|
%
|
|
77.4
|
%
|
|
76.6
|
%
|
||||
ADR
|
|
$
|
189.74
|
|
|
$
|
190.29
|
|
|
$
|
197.53
|
|
|
$
|
197.54
|
|
RevPAR
|
|
147.99
|
|
|
141.69
|
|
|
152.81
|
|
|
151.33
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Recently Acquired Hotels
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Occupancy Rate
|
|
80.1
|
%
|
|
86.3
|
%
|
|
81.0
|
%
|
|
83.9
|
%
|
||||
ADR
|
|
$
|
250.19
|
|
|
$
|
214.02
|
|
|
$
|
251.82
|
|
|
$
|
212.41
|
|
RevPAR
|
|
200.49
|
|
|
184.74
|
|
|
204.02
|
|
|
178.14
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Unconsolidated Hotels
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Ritz-Carlton Key Biscayne Venture
|
|
$
|
763
|
|
|
$
|
709
|
|
|
$
|
2,260
|
|
|
$
|
2,324
|
|
Ritz-Carlton Bacara, Santa Barbara Venture
(a)
|
|
(799
|
)
|
|
—
|
|
|
(799
|
)
|
|
—
|
|
||||
Total equity in (losses) earnings of equity method investments in real estate
|
|
$
|
(36
|
)
|
|
$
|
709
|
|
|
$
|
1,461
|
|
|
$
|
2,324
|
|
(a)
|
We acquired our 60.0% tenancy-in-common interest in this venture on September 28, 2017. The results for the three and nine months ended September 30, 2017 above represent data from its acquisition date through September 30, 2017 and included pre-opening expenses.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Venture
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Seattle Marriott Bellevue
(a)
|
|
$
|
2,415
|
|
|
$
|
420
|
|
|
$
|
2,962
|
|
|
$
|
321
|
|
Marriott Sawgrass Golf Resort & Spa Venture
(b)
|
|
3,255
|
|
|
711
|
|
|
1,549
|
|
|
(1,512
|
)
|
||||
Operating Partnership — Available Cash Distribution (
Note 3
)
|
|
(1,894
|
)
|
|
(1,100
|
)
|
|
(3,528
|
)
|
|
(1,965
|
)
|
||||
|
|
$
|
3,776
|
|
|
$
|
31
|
|
|
$
|
983
|
|
|
$
|
(3,156
|
)
|
(a)
|
We acquired our 95.4% interest in this venture on January 22, 2016. The results for the
nine months ended September 30, 2016
above represent data from its acquisition date through
September 30, 2016
.
|
(b)
|
The losses attributable to noncontrolling interests during both the three and
nine months ended September 30, 2017
were largely attributable to the impact of Hurricane Irma.
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Carrying Value
|
|
|
|
||||
Fixed rate
(a)
|
$
|
484,510
|
|
|
$
|
184,549
|
|
Variable rate
(a)
:
|
|
|
|
||||
Amount subject to interest rate cap, if applicable
|
247,069
|
|
|
288,199
|
|
||
Amount subject to interest rate swap
|
99,386
|
|
|
99,187
|
|
||
|
346,455
|
|
|
387,386
|
|
||
|
$
|
830,965
|
|
|
$
|
571,935
|
|
Percent of Total Debt
|
|
|
|
||||
Fixed rate
|
58
|
%
|
|
32
|
%
|
||
Variable rate
|
42
|
%
|
|
68
|
%
|
||
|
100
|
%
|
|
100
|
%
|
||
Weighted-Average Interest Rate at End of Period
|
|
|
|
||||
Fixed rate
|
4.3
|
%
|
|
4.0
|
%
|
||
Variable rate
(b)
|
4.5
|
%
|
|
4.0
|
%
|
(a)
|
Aggregate debt balance includes deferred financing costs totaling
$4.4 million
and
$3.6 million
as of
September 30, 2017
and
December 31, 2016
, respectively.
|
(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
(a)
|
$
|
835,400
|
|
|
$
|
—
|
|
|
$
|
354,355
|
|
|
$
|
307,989
|
|
|
$
|
173,056
|
|
Interest on borrowings
(b)
|
137,731
|
|
|
36,972
|
|
|
60,635
|
|
|
36,212
|
|
|
3,912
|
|
|||||
Annual distribution and shareholder servicing fee
(c)
|
17,400
|
|
|
5,905
|
|
|
10,999
|
|
|
496
|
|
|
—
|
|
|||||
Contractual capital commitments
(d)
|
12,817
|
|
|
12,817
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Lease commitments
(e)
|
1,970
|
|
|
591
|
|
|
1,182
|
|
|
197
|
|
|
—
|
|
|||||
Asset retirement obligation, net
(f)
|
95
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
95
|
|
|||||
Due to our Advisor
(g)
|
51
|
|
|
51
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
1,005,464
|
|
|
$
|
56,336
|
|
|
$
|
427,171
|
|
|
$
|
344,894
|
|
|
$
|
177,063
|
|
(a)
|
Excludes deferred financing costs totaling
$4.4 million
.
|
(b)
|
For variable-rate debt, interest on borrowings is calculated using the capped or swapped interest rate, when in effect.
|
(c)
|
Represents the estimated liability for the present value of the future distribution and shareholder servicing fees in connection with our Class T common stock (
Note 3
).
|
(d)
|
Capital commitments represent our remaining contractual renovation commitments at our Consolidated Hotels, which does not reflect any renovation work to be undertaken as a result of Hurricane Irma (
Note 9
).
|
(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.
|
(f)
|
Represents the estimated future obligation for the removal of asbestos and environmental waste in connection with two of our hotels upon the retirement of the asset.
|
(g)
|
Represents amounts advanced by our Advisor for organization and offering costs subject to limitations under the advisory agreement (
Note 3
).
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss attributable to CWI 2 stockholders
|
$
|
(1,485
|
)
|
|
$
|
(7,416
|
)
|
|
$
|
(169
|
)
|
|
$
|
(10,666
|
)
|
Adjustments:
|
|
|
|
|
|
|
|
||||||||
Depreciation and amortization of real property
|
11,665
|
|
|
6,841
|
|
|
32,187
|
|
|
14,821
|
|
||||
Proportionate share of adjustments for partially-owned entities — FFO adjustments
|
(838
|
)
|
|
(783
|
)
|
|
(2,621
|
)
|
|
(1,558
|
)
|
||||
Total adjustments
|
10,827
|
|
|
6,058
|
|
|
29,566
|
|
|
13,263
|
|
||||
FFO attributable to CWI 2 stockholders (as defined by NAREIT)
|
9,342
|
|
|
(1,358
|
)
|
|
29,397
|
|
|
2,597
|
|
||||
Acquisition expenses
(a)
|
—
|
|
|
11,399
|
|
|
4,979
|
|
|
18,936
|
|
||||
Hurricane loss
(b)
|
3,845
|
|
|
—
|
|
|
3,845
|
|
|
—
|
|
||||
Proportionate share of adjustments for partially owned entities — MFFO adjustments
|
(1,922
|
)
|
|
(374
|
)
|
|
(1,922
|
)
|
|
(374
|
)
|
||||
Loss on extinguishment of debt
|
256
|
|
|
—
|
|
|
256
|
|
|
—
|
|
||||
Other rent adjustments
|
(17
|
)
|
|
(22
|
)
|
|
(209
|
)
|
|
(81
|
)
|
||||
Total adjustments
|
2,162
|
|
|
11,003
|
|
|
6,949
|
|
|
18,481
|
|
||||
MFFO attributable to CWI 2 stockholders
|
$
|
11,504
|
|
|
$
|
9,645
|
|
|
$
|
36,346
|
|
|
$
|
21,078
|
|
(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.
|
(b)
|
We excluded the hurricane loss because of the non-recurring nature of the charge.
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
||||||||||||||||
Fixed-rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,630
|
|
|
$
|
4,321
|
|
|
$
|
4,498
|
|
|
$
|
475,451
|
|
|
$
|
486,900
|
|
|
$
|
482,652
|
|
Variable-rate debt
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
215,765
|
|
|
$
|
132,735
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
348,500
|
|
|
$
|
351,077
|
|
|
Common Stock
|
|
|
||||||||
|
Class A
|
|
Class T
|
|
Total
|
||||||
Shares registered
(a)
|
41,072,925
|
|
|
80,673,759
|
|
|
121,746,684
|
|
|||
Aggregate price of offering amount registered
(a)
|
$
|
490,000
|
|
|
$
|
910,000
|
|
|
$
|
1,400,000
|
|
Shares sold
(b)
|
26,657,229
|
|
|
55,284,524
|
|
|
81,941,753
|
|
|||
Aggregated offering price of amount sold
|
$
|
280,354
|
|
|
$
|
570,965
|
|
|
$
|
851,319
|
|
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
|
(19,703
|
)
|
|
(22,602
|
)
|
|
(42,305
|
)
|
|||
Direct or indirect payments to broker-dealers
|
(8,318
|
)
|
|
(15,702
|
)
|
|
(24,020
|
)
|
|||
Net offering proceeds to the issuer after deducting expenses
|
$
|
252,333
|
|
|
$
|
532,661
|
|
|
784,994
|
|
|
Purchases of real estate related assets, net of financing and distributions to/contributions from noncontrolling interests
|
|
|
|
|
(547,851
|
)
|
|||||
Proceeds from note payable to affiliate
|
|
|
|
|
332,447
|
|
|||||
Repayment of note payable to affiliate
|
|
|
|
|
(332,447
|
)
|
|||||
Purchase of equity interest
|
|
|
|
|
(136,945
|
)
|
|||||
Acquisition costs expensed
|
|
|
|
|
(44,943
|
)
|
|||||
Net funds placed in escrow
|
|
|
|
|
(34,023
|
)
|
|||||
Cash distributions paid to stockholders
|
|
|
|
|
(8,553
|
)
|
|||||
Working capital
|
|
|
|
|
(12,679
|
)
|
|||||
Temporary investments in cash and cash equivalents
|
|
|
|
|
$
|
—
|
|
(a)
|
These amounts are based on the actual shares sold in our initial public offering, which were composed of 35% Class A common stock and 65% Class T common stock and the assumption that the shares were being sold at our final offering prices of $11.93 and $11.28 per share, respectively.
|
(b)
|
Excludes Class A shares issued to affiliates, including our Advisor, and Class A and Class T shares issued pursuant to our DRIP.
|
|
|
Class A
|
|
Class T
|
|
|
|
|
||||||||||
2017 Period
|
|
Total number of shares purchased
(a)
|
|
Average price paid per share
|
|
Total number of shares purchased
(a)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number (or approximate dollar value) of shares that may yet be purchased under the plans or programs
|
||||||
July
|
|
170
|
|
|
$
|
10.20
|
|
|
196
|
|
|
$
|
10.25
|
|
|
N/A
|
|
N/A
|
August
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
N/A
|
|
N/A
|
||
September
|
|
38,133
|
|
|
10.21
|
|
|
139,361
|
|
|
10.22
|
|
|
N/A
|
|
N/A
|
||
Total
|
|
38,303
|
|
|
|
|
139,557
|
|
|
|
|
|
|
|
(a)
|
Represents shares of our Class A and Class T common stock repurchased under our redemption plan, pursuant to which we may elect to redeem shares at the request of our stockholders who have held their shares for at least one year from the date of their issuance, subject to certain exceptions, conditions and limitations. The maximum amount of shares purchasable by us in any period depends on a number of factors and is at the discretion of our board of directors. We generally receive fees in connection with share redemptions. The average price paid per share will vary depending on the number of redemption requests that were made during the period, the number of redemption requests that qualify for special circumstances and the most recently published NAV.
|
Exhibit No.
|
|
|
Description
|
|
Method of Filing
|
|
|
|
|
|
|
10.1
|
|
|
Loan Agreement, between W.P. Carey Inc. as Lender, and CWI 2 OP, LP as Borrower, dated as of October 19, 2017
|
|
Filed herewith
|
|
|
|
|
|
|
10.2
|
|
|
Payment Guaranty, between W.P. Carey Inc. as Lender, and Carey Watermark Investors 2 Inc. as Guarantor, dated as of October 19, 2017
|
|
Filed herewith
|
|
|
|
|
|
|
10.3
|
|
|
Pledge and Security Agreement between W.P. Carey Inc. as Lender, and CWI 2 OP, LP as Pledgor, dated October 19, 2017
|
|
Filed herewith
|
|
|
|
|
|
|
10.4
|
|
|
Promissory Note, between W.P. Carey Inc. as Lender, and CWI 2 OP, LP as Borrower, dated as of October 19, 2017
|
|
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 Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2017 and 2016, (iv) Consolidated Statements of Equity for the nine months ended September 30, 2017 and 2016, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (vi) Notes to Consolidated Financial Statements.
|
|
Filed herewith
|
|
|
|
Carey Watermark Investors 2 Incorporated
|
Date:
|
November 13, 2017
|
|
|
|
|
By:
|
/s/ Mallika Sinha
|
|
|
|
Mallika Sinha
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
Date:
|
November 13, 2017
|
|
|
|
|
By:
|
/s/ Noah K. Carter
|
|
|
|
Noah K. Carter
|
|
|
|
Chief Accounting Officer
|
|
|
|
(Principal Accounting Officer)
|
Exhibit No.
|
|
|
Description
|
|
Method of Filing
|
|
|
|
|
|
|
10.1
|
|
|
Loan Agreement, between W.P. Carey Inc. as Lender, and CWI 2 OP, LP as Borrower, dated as of October 19, 2017
|
|
|
|
|
|
|
|
|
10.2
|
|
|
Payment Guaranty, between W.P. Carey Inc. as Lender, and Carey Watermark Investors 2 Inc. as Guarantor, dated as of October 19, 2017
|
|
|
|
|
|
|
|
|
10.3
|
|
|
Pledge and Security Agreement between W.P. Carey Inc. as Lender, and CWI 2 OP, LP as Pledgor, dated October 19, 2017
|
|
|
|
|
|
|
|
|
10.4
|
|
|
Promissory Note, between W.P. Carey Inc. as Lender, and CWI 2 OP, LP as Borrower, dated as of October 19, 2017
|
|
|
|
|
|
|
|
|
31.1
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
31.2
|
|
|
Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
32
|
|
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
|
|
|
|
|
101
|
|
|
The following materials from Carey Watermark Investors 2 Incorporated’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016, (iii) Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2017 and 2016, (iv) Consolidated Statements of Equity for the nine months ended September 30, 2017 and 2016, (v) Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016, and (vi) Notes to Consolidated Financial Statements.
|
|
Filed herewith
|
|
|
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|
1
|
|
|||||
|
Section 1.1
|
Certain Defined Terms
|
1
|
|
||
|
Section 1.2
|
Computation of Time Periods
|
4
|
|
||
|
Section 1.3
|
Accounting Terms
|
5
|
|
||
|
|
|
|
|
|
|
5
|
|
|||||
|
Section 2.1
|
The Commitment
|
|
|
5
|
|
|
Section 2.2
|
Advances
|
|
|
5
|
|
|
Section 2.3
|
Interest Rate
|
|
|
5
|
|
|
Section 2.4
|
Payment of Interest
|
|
|
6
|
|
|
Section 2.5
|
Default Rate
|
|
|
6
|
|
|
Section 2.6
|
Maximum Legal Rate of Interest
|
6
|
|
||
|
Section 2.7
|
Prepayments
|
|
|
6
|
|
|
Section 2.8
|
Maturity
|
6
|
|
||
|
Section 2.9
|
Evidence of Indebtedness
|
6
|
|
||
|
Section 2.10
|
Illegality
|
6
|
|
||
|
|
|
|
|
|
|
ARTICLE III CONDITIONS OF BORROWING
|
7
|
|
||||
|
Section 3.1
|
Conditions Precedent to Initial Advance
|
7
|
|
||
|
Section 3.2
|
Conditions Precedent to Each Advance
|
7
|
|
||
|
|
|
|
|
|
|
8
|
|
|||||
|
Section 4.1
|
Organization
|
8
|
|
||
|
Section 4.2
|
Authorization; No Breach
|
8
|
|
||
|
Section 4.3
|
Legal Effect
|
8
|
|
||
|
Section 4.4
|
Information
|
8
|
|
||
|
Section 4.5
|
Survival of Representations and Warranties
|
8
|
|
||
|
|
|
|
|
|
|
9
|
|
|||||
|
Additional Covenants
|
9
|
|
|||
|
|
|
|
|
|
|
9
|
|
|||||
|
Events of Default
|
9
|
|
|||
|
Remedies
|
11
|
|
|||
|
Right of Offset
|
11
|
|
|
Cumulative Remedies
|
11
|
|
|||
|
Application of Payments
|
12
|
|
|||
|
|
|
|
|
|
|
ARTICLE VII Transfers
|
12
|
|
||||
|
Section 7.1
|
Assignment by Lender
|
|
12
|
|
|
|
|
|
|
|
|
|
12
|
|
|||||
|
Section 8.1
|
Amendments
|
12
|
|
||
|
Section 8.2
|
Notices
|
12
|
|
||
|
Section 8.3
|
No Waiver; Remedies
|
12
|
|
||
|
Section 8.4
|
Costs and Expenses; Indemnification
|
13
|
|
||
|
Section 8.5
|
Binding Effect; Assignments and Participations
|
13
|
|
||
|
Section 8.6
|
Execution in Counterparts
|
14
|
|
||
|
Section 8.7
|
Governing Law
|
14
|
|
||
|
Section 8.8
|
Service of Process
|
14
|
|
||
|
Section 8.9
|
Consent to Jurisdiction
|
14
|
|
||
|
Section 8.10
|
Waiver of Jury Trial
|
14
|
|
||
|
Section 8.11
|
No Fiduciary Duty
|
14
|
|
||
|
Section 8.12
|
Severability
|
15
|
|
||
|
Section 8.13
|
Entire Agreement
|
15
|
|
||
|
Section 8.14
|
Descriptive Headings
|
15
|
|
||
|
Section 8.15
|
Gender and Number
|
15
|
|
||
|
|
|
|
|||
SCHEDULE 1
|
Notice Addresses
|
|
||||
|
|
|
||||
EXHIBIT A
|
Form of Advance Request
|
|
LENDER
:
|
|
|
|
W. P. Carey Inc
., a Maryland corporation
|
|
|
|
|
|
By:
|
/s/ ToniAnn Sanzone
|
|
Name: ToniAnn Sanzone
|
|
Title: Managing Director and Chief Financial Officer
|
BORROWER
:
|
|
|
|
CWI 2 OP, LP,
a Delaware limited partnership
|
|
|
|
By:
|
Carey Watermark Investors 2 Incorporated
,
|
|
a Maryland Corporation, its general partner
|
|
|
By:
|
/s/ Michael G. Medzigian
|
|
Name: Michael G. Medzigian
|
|
Title: President & Chief Executive Officer
|
A.
|
The representations and warranties contained in Article IV of the Loan Agreement are true and correct as though made on and as of such dates, unless such representations and warranties are expressly stated to be made as of an earlier date;
|
B.
|
Borrower is in full compliance with all covenants contained in Articles V and VI of the Loan Agreement; and
|
C.
|
No event has occurred and is continuing, or would result from such Requested Borrowing, that constitutes or would constitute an Event of Default or a Default under the Loan Agreement.
|
D.
|
The representations, warranties and covenants contained in Section 5 of the Guaranty are and will be true and correct in all material respects as though made on and as of such date,
|
E.
|
Guarantor is and will be in compliance with all covenants contained in Section 6 of the Guaranty.
|
Very truly yours,
|
|
|
|
CWI 2 OP, LP
|
|
|
|
By: Carey Watermark Investors Incorporated,
|
|
its general partner
|
|
|
|
By:
|
|
|
|
Name:
|
|
Title:
|
Carey Watermark Investors 2 Incorporated,
a Maryland corporation
|
|
|
|
|
|
By:
|
/s/ Michael G. Medzigian
|
|
Name: Michael G. Medzigian
|
|
Title: President & Chief Executive Officer
|
/s/ Christine M. Isfan
|
Notary Public
|
(i)
|
all of Pledgor’s Equity Interests in each Subsidiary, together with the certificates evidencing the same (the “
Pledged Interests
”), and all of the Subordinated Rights;
|
(ii)
|
all ownership interests, membership interests, partnership interests, shares, securities, moneys, instruments or property representing a dividend, a distribution or return of capital upon or in respect of the Pledged Interests or Subordinated Rights, or otherwise received in exchange therefor, and any warrants, rights, options, or
|
(iii)
|
all rights, powers, privileges, remedies, interests and security entitlements of Pledgor under the Relevant Documents or any other agreement or instrument relating to any of the Pledged Interests or Subordinated Rights, including, without limitation, (i) all rights of Pledgor to receive moneys or distributions under or with respect to any of the Pledged Interests or Subordinated Rights due and to become due under or pursuant to the Relevant Documents, (ii) all rights of Pledgor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to any of the Pledged Interests or Subordinated Rights, (iii) all claims of Pledgor for damages arising out of or for breach of or default under a Relevant Document, and (iv) any right of Pledgor to perform thereunder and to compel performance and otherwise exercise all rights and remedies thereunder;
|
(iv)
|
any accounts, as-extracted collateral, chattel paper, commercial tort claims, consumer goods,
deposit accounts, documents and trust receipts (and the goods covered thereby, wherever located), equipment, financial assets, fixtures, general intangibles, goods, instruments, inventory, investment properties, letter-of-credit rights, letters-of-credit, money, payment intangibles, proceeds, products, securities, securities accounts, security entitlements and software (as each such term is defined in the UCC), or any other contract right, indemnity, warranty, casualty or other insurance policy or right, or litigation claim or right, to the extent arising from or related to any asset, property, right, power, privilege, remedy, interest or entitlement listed in clause (i), (ii) or (iii) of this
Section 2(a)
; and
|
(v)
|
any and all products of, proceeds from and other collections, payments and other distributions and realizations respecting any asset, property, right, power, privilege, remedy, interest or entitlement described in clauses (i) through (iv) of this
Section 2(a)
and, any and all books, correspondence, credit files, records, invoices and other papers and documents evidencing, governing or related to any such asset, property, right, power, privilege, remedy, interest or entitlement;
|
(i)
|
at any time or from time to time, without notice to Pledgor, the time for any performance of or compliance with any of the Pledgor’s Obligations shall be extended, or such performance or compliance shall be waived;
|
(ii)
|
any of the acts mentioned in any of the provisions of the Guaranty, the Loan Agreement, the Note, or any other Loan Documents, or any other agreement or instrument referred to herein or therein shall be done or omitted;
|
(iii)
|
the maturity of any of the Pledgor’s Obligations shall be accelerated, or any of the Pledgor’s Obligations shall be modified, supplemented or amended in any respect, or any right under the Guaranty, the Loan Agreement, the Note, or any other Loan Documents, or any other agreement or instrument referred to herein or therein shall be waived or any other guarantee of any of the Pledgor’s Obligations or any security or collateral therefor shall be terminated, released or exchanged in whole or in part or otherwise dealt with; or
|
(iv)
|
any lien or security interest granted to, or in favor of Lender as security for any of the Pledgor’s Obligations shall fail to be perfected or shall be released.
|
Pledgor:
|
||
|
|
|
CWI 2 OP, LP
|
||
|
|
|
|
By:
|
Carey Watermark Investors 2 Incorporated, its general partner
|
|
|
|
|
|
|
|
By:
|
/s/ Michael Medzigian
|
|
|
Name: Michael Medzigian
|
|
|
Title: President & Chief Executive Officer
|
/s/ Christine M. Isfan
|
Notary Public
|
Lender:
|
||
|
|
|
|
W. P. Carey Inc.,
a Maryland corporation
|
|
|
|
|
|
|
|
|
By:
|
/s/ ToniAnn Sanzone
|
|
|
Name: ToniAnn Sanzone
|
|
|
Title: Managing Director and Chief Financial Officer
|
/s/ Leah Speckhard
|
Notary Public
|
Assignor:
|
|
|
|
[Name of Pledgor]
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
Title:
|
$25,000,000.00
|
New York, New York
October 19, 2017
|
BORROWER:
|
||
|
|
|
CWI 2 OP, LP
|
||
|
|
|
|
By:
|
Carey Watermark Investors 2 Incorporated,
|
|
|
a Maryland Corporation, its general partner
|
|
|
|
|
By:
|
/s/ Michael G. Medzigian
|
|
|
Name: Michael G. Medzigian
|
|
|
Title: President & Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Carey Watermark Investors 2 Incorporated;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Carey Watermark Investors 2 Incorporated;
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2.
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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;
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3.
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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;
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4.
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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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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1.
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The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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2.
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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.
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