Moody National REIT II CEO Discusses Financial Condition in Statement
Moody National REIT II Inc., a publicly registered non-traded real estate investment trust that invests in hospitality real estate, has distributed a video statement to financial advisors from Brett Moody, chief executive officer and president.
Moody National REIT II Inc., a publicly registered non-traded real estate investment trust that invests in hospitality real estate, has distributed a video statement to financial advisors from Brett Moody, chief executive officer and president, regarding the continued impact of the COVID-19 pandemic on its properties and operations, according to a filing with the Securities and Exchange Commission.
Through the first six months of 2022, the REIT’s total revenue increased to $37.7 million, a $13.1 million increase compared to the same period in 2021. The portfolio’s year-to-date revenue per available room, or RevPAR, was $92.76, a year-over-year increase of 54.8 percent, exceeding U.S. national hotel RevPAR growth of 49.4 percent for the same period.
Moody noted that while the growth is encouraging, “to get a better sense of perspective, a comparison to pre-pandemic data provides further illumination.”
Through the first half of 2019, total revenue was $41.9 million and RevPAR for the same period was $107.97. Thus, the year-to-date 2022 RevPAR of $92.76 represents an approximate 15 percent decline when compared to the same period in 2019.
“We remain optimistic as the vast majority of the REIT II portfolio consists of assets located in Austin, Dallas/Fort Worth, Nashville, and Seattle – all of which management believes are well positioned to continue gaining demand from increased business travel, convention, and city-wide events,” said Moody.
From April 2022 to June 2022, Moody National Capital LLC, an affiliate of the REIT’s sponsor and advisor, made a series of cash advances to the REIT for its specific cash flow needs. These advances were memorialized in a promissory note with a total maximum aggregate loan amount of $10 million.
As of June 30, 2022, Moody Capital has loaned REIT more than $30 million to cover deferred mortgage payments, payroll, taxes and insurance, as well as all other operating expenses.
Moody noted that there are “numerous challenges” remaining that the board must consider prior to reinstating distributions and the share redemption program – which is not expected to occur in 2022.
For example, the company said that most of its properties remain in a cash management system where the mortgage lender controls property funds. In order to access extra cash flow should it become available, the REIT must meet certain requirements set forth by the lender.
Moody National REIT II owns a portfolio of 15 hotels purchased for $451.8 million. As of June 30, 2022, the company had raised a total of $234.6 million in investor equity from its initial public offering and follow-on offering, which was terminated on March 25, 2020.
