Moody National REIT II Advances Liquidation

While major property dispositions helped reduce liabilities, the company’s liquidity struggles pose ongoing risks as it seeks stockholder approval to dissolve.

August 14, 2025

Hotel Sales Drive Balance Sheet Changes

In the six months ending June 30, Moody closed five major hotel sales: Residence Inn Austin, Residence Inn Grapevine, Courtyard Marriott Lyndhurst, Embassy Suites Nashville, and Townplace Suites Fort Worth. Together, these deals brought in $138.3 million. One property, Hilton Garden Inn Austin, was foreclosed in May.

The company now holds nine hotel properties across five states, down from fifteen at this time last year. The sales dropped Moody’s total assets from $321 million to $171 million. A sale agreement is also in place for the Residence Inn Houston Medical Center, expected to close at $33 million.

Debt and Liquidity Remain Key Pressure Points

Even after the sales, Moody continues to face high levels of debt and limited liquidity. The company reported $120.3 million in notes payable and $28 million in related-party loans as of June 30. Of this, $71 million is set to mature before the end of the year.

Available cash and restricted cash totaled $16.7 million—down from $29.2 million six months earlier. The company is current on most loan payments or operating under modified terms. However, it flagged concerns about its ability to cover upcoming obligations without further property sales or refinancing.

Preparing to Exit

In April, Moody’s board approved a formal Plan of Liquidation. The plan includes the sale of all remaining assets and full dissolution of the company, pending a stockholder vote on September 30. If approved, proceeds from the asset sales will be used to pay down debt, cover liabilities, and fund any remaining distributions to stockholders.

Importantly, the Residence Inn Houston Medical Center sale will move forward regardless of the vote outcome.

Operating Results Reflect Strategic Shift

Revenue for the six months ended June 30 came in at $26.8 million, down from $40.9 million in the prior year. Operating losses widened to $20.8 million, driven by $21.8 million in impairment charges tied to the unsold portfolio. Net loss for the period was $10.2 million.

While the company did generate gains on property sales—$7.3 million for the period—those proceeds were allocated to debt repayment. No distributions were made to shareholders.

Next Steps

Between maturing debt and reduced cash reserves, Moody is relying on a successful liquidation process to meet its financial obligations. The company has suspended distributions and share repurchases since 2020 and does not anticipate restarting either, outside of potential liquidating distributions.

For now, the company is focused on managing its remaining hotel assets, closing on pending sales, and securing the shareholder vote needed to proceed. The path ahead depends heavily on execution in the months leading up to year-end.