Portsmouth Square, Inc. reported a net loss of $1,872,000 for the three months ended September 30, 2024, compared to a net loss of $1,560,000 for the same period in 2023. The increase in net loss is attributed to higher mortgage interest expenses, including a 4% default interest rate on senior and mezzanine loans, and increased related party accrued interest expenses due to a higher balance owed to InterGroup.

For the quarter, the company achieved operating income of $3,028,000 on total operating revenues of $11,820,000, an increase from an operating income of $1,812,000 on revenues of $11,093,000 in Q3 2023. Hotel revenues increased by 6.5% year-over-year, driven by a $549,000 rise in room revenue and a $106,000 increase in food and beverage revenue. The average daily rate (ADR) decreased by $8, while average occupancy rose by 8.0%. Revenue per Available Room (RevPAR) increased by $11 compared to Q3 2023.

As of September 30, 2024, Portsmouth Square reported an accumulated deficit of $118,974,000, which includes a significant adjustment made in December 2013. The company has a total outstanding balance of $100,546,000 in senior mortgage and mezzanine loans, which matured on January 1, 2024. The company entered into forbearance agreements with lenders on April 29, 2024, extending the maturity date to January 1, 2025.

The hotel, which operates under a franchise agreement with HLT Franchise Holding LLC, completed a full renovation of guest rooms and public spaces over the past two years, positively impacting RevPAR growth. The hotel received a Quality Assurance inspection score of 94.45% from Hilton, the highest in the last decade. For the quarter, the hotel achieved a RevPAR index of 145% and an ADR index of 90%, with a year-to-date RevPAR index of 118%.

The company’s cash and cash equivalents increased to $4,839,000 as of September 30, 2024, up from $3,511,000 as of June 30, 2024. Restricted cash also rose to $2,049,000 from $1,264,000 during the same period. The company’s investment portfolio includes marketable securities valued at $207,000, slightly down from $209,000 as of June 30, 2024.

Portsmouth Square operates in two segments: Hotel Operations and Investment Transactions. The company continues to face substantial doubt about its ability to continue as a going concern due to challenges in refinancing its debt.