Discontinued Operations

9 Months Ended

Sep. 30, 2013

Discontinued Operations [Abstract]

Discontinued Operations

NOTE 12 – DISCONTINUED OPERATIONS

The operating results of certain real estate assets which have been sold or otherwise qualify as held for sale are included in discontinued operations in the statements of operations for all periods presented.

Disposed Assets

On September 17, 2013, the Company closed on the sale of the Holiday Inn Express Camp Springs, MD to an unaffiliated buyer for a total sale price of $8,500 with a gain on sale of approximately $149recognized in the three months ended September 30, 2013. This hotel was acquired by the Company in June 2008. The operating results for this hotel were reclassified to discontinued operations in the statements of operations for the three and nine months ended September 30, 2013 and 2012. We previously recorded an impairment loss of approximately $3,723 during the second quarter of 2013 as the net proceeds were not expected to exceed the carrying value.

On June 12, 2013, the Company closed on the sale of the Comfort Inn Harrisburg, PA to an unaffiliated buyer for a total sale price of $3,700 with a gain on sale of approximately $883 as of June 30, 2013.  This hotel was acquired by the Company in September 1999. The operating results for this hotel were reclassified to discontinued operations in the statements of operations for the three and nine months ended September 30, 2013 and 2012.

On April 30, 2012, we closed on the sale of the land parcel and improvements located at 585 Eighth Avenue, New York, NY, to an unaffiliated buyer for a total sale price of $19,250 with a gain on sale of approximately $5,143. This land parcel was acquired by the Company in June 2006. The operating results were reclassified to discontinued operations in the statement of operations for the three and nine months ended September 30, 2012.

On March 30, 2012, we transferred the title to the Comfort Inn, located in North Dartmouth, to the lender.  Previously, we had ceased operations at this property on March 31, 2011.  The operating results were reclassified to discontinued operations in the statements of operations for the three and nine months ended September 30, 2012.  The transfer of the title resulted in a gain of approximately $1,216 as of September 30, 2012, since the outstanding mortgage loan payable exceeded the net book value of the property.

On August 15, 2011, the Company entered into two purchase and sale agreements to dispose of a portfolio of 18 non-core hotel properties, four of which are owned in part by the Company through an unconsolidated joint venture, for an aggregate purchase price of approximately $155,000.  In May 2011, our Board of Trustees authorized management of the Company to sell this portfolio.   The 18 non-core hotel properties in the portfolio were acquired by the Company between 1998 and 2006.On February 23, 2012, the Company closed on the sale of 14 of these non-core hotel properties, including three hotel properties owned in part by the Company through an unconsolidated joint venture, and closed on the remaining 4 properties on May 8, 2012, including one hotel property owned in part by the Company through an unconsolidated joint venture.  The operating results for the consolidated assets were reclassified to discontinued operations in the statement of operations for the nine months ended September 30, 2012.  The 18 assets were sold for a total sales price of $155,000, reduced the Company’s consolidated mortgage debt by $61,298 and recorded a gain on sale of approximately $4,910 as of September 30, 2012.

Assets Held for Sale

On September 20, 2013, the Company entered into a purchase and sale agreement to dispose of a portfolio of 16 non-core hotel properties, for an aggregate purchase price of approximately $217,000.In September 2013, our Board of Trustees authorized management of the Company to sell this portfolio.   The 16 non-core hotel properties in the portfolio were acquired by the Company between 1999 and 2010.The operating results for the consolidated assets were reclassified to discontinued operations in the statement of operations for the three and nine months ended September 30, 2013 and 2012.  The Company expects to complete the sale of the portfolio by the first quarter of 2014. We recorded an impairment loss of approximately $6,591 for those assets for which the anticipated net proceeds do not exceed the carrying value.

NOTE 12 – DISCONTINUED OPERATIONS (CONTINUED)

Assets held for sale or liabilities related to assets held for sale consisted of the following as of September 30, 2013:

	September 30, 2013
Land	$	26,591
Buildings and Improvements		183,827
Furniture, Fixtures and Equipment		31,341
		241,759
Less Accumulated Depreciation & Amortization		(63,064)
Assets Held for Sale	$	178,695
Liabilities Related to Assets Held for Sale	$	79,291

The following table sets forth the components of discontinued operations for the three and nine months ended September 30, 2013 and 2012:

	Three Months Ended September 30,				Nine Months Ended September 30,
		2013		2012		2013		2012
Revenue:
Hotel Operating Revenues	$	17,583	$	17,456	$	45,797	$	49,185
Other Revenue		-		-		-		11
Total Revenues		17,583		17,456		45,797		49,196
Expenses:
Hotel Operating Expenses		10,123		9,737		27,755		30,400
Hotel Ground Rent		-		-		-		72
Real Estate and Personal Property Taxes and Property Insurance		865		789		2,592		2,753
General and Administrative		67		-		22		16
Depreciation and Amortization		2,238		2,231		7,037		6,719
Interest Expense		1,266		1,762		3,779		6,411
Other Expense		3		(1)		14		1
Loss on Debt Extinguishment		-		-		-		33
Income Tax Expense		(49)		-		167		-
Total Expenses		14,513		14,518		41,366		46,405
Income from Discontinued Operations	$	3,070	$	2,938	$	4,431	$	2,791

We allocate to income or loss from discontinued operations interest expense related to debt that is to be assumed or that is required to be repaid as a result of the disposal transaction.