Discontinued Operations

12 Months Ended

Dec. 31, 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.

Assets Held for Sale

Assets held for sale or liabilities related to assets held for sale consisted of the following as of December 31, 2013:

	December 31, 2013
Land	$	9,517
Buildings and Improvements		58,129
Furniture, Fixtures and Equipment		9,198
		76,844
Less Accumulated Depreciation & Amortization		(20,261)
Assets Held for Sale	$	56,583
Liabilities Related to Assets Held for Sale	$	45,835

The following table sets forth the components of discontinued operations for the years ended December 31, 2013, 2012, and 2011:

	Year Ended December 31,
		2013		2012		2011
Revenue:
Hotel Operating Revenues	$	58,045	$	63,465	$	96,901
Other Revenue		-		11		55
Total Revenues		58,045		63,476		96,956
Expenses:
Hotel Operating Expenses		35,158		39,046		60,288
Hotel Ground Rent		-		72		433
Real Estate and Personal Property Taxes and Property Insurance		3,316		3,636		5,460
General and Administrative		36		27		597
Acquisition and Termination Transaction Costs		-		8		(17)
Depreciation and Amortization		7,050		9,148		15,142
Interest Expense		4,863		7,872		12,817
Other Expense		44		10		4
Loss on Debt Extinguishment		-		168		43
Income Tax Expense		190		-		-
Total Expenses		50,657		59,987		94,767
Income from Discontinued Operations	$	7,388	$	3,489	$	2,189

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.

NOTE 12 – DISCONTINUED OPERATIONS (CONTINUED)

Disposed Assets

Hotel	Acquisition Date	Disposition Date		Consideration		Gain on Disposition
Non-Core Portfolio II (12)	January 1999 - July 2010	December 2013	$	158,600	$	31,559	(1)
Holiday Inn Express, Camp Springs, MD	June 2008	September 2013		8,500		120
Comfort Inn, Harrisburg, PA	January 1999	June 2013		3,700		442
2013 Total						32,121
Non-Core Hotel Portfolio (18)	January 1999 - July 2007	February 2012 & May 2012	$	155,000	$	4,978	(2)
Land Parcel, Eighth Ave, Manhattan, NY	June 2006	April 2012		19,250		5,037
Comfort Inn, North Dartmouth, MA	May 2006	March 2012		-		1,216	(3)
2012 Total					$	11,231
Comfort Inn, West Hanover, PA	May 1998	July 2011	$	5,250	$	949
Land Parcel,  Nevins Street, Brooklyn, NY	June 2007	December 2011		4,500		42
2011 Total					$	991

(1) In September 2013, our Board of Trustees authorized management of the Company to sell this portfolio. 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.  The 16 non-core hotel properties in the portfolio were acquired by the Company between 1999 and 2010. We recorded an impairment loss of approximately $6,591 for those assets for which the anticipated net proceeds do not exceed the carrying value.

On December 20, 2013, the Company closed on the sale of 12 of these non-core hotel properties.  As a result of entering into these purchase and sale agreements for the 16 non-core assets mentioned above, the operating results for the consolidated assets were reclassified to discontinued operations in the statement of operations for the years ended December 31, 2013, 2012, and 2011.  The 12 assets were sold for a total sales price of $158,600, reduced the Company’s consolidated mortgage debt by $33,044 and generated a gain on sale of approximately $31,559.   In February 2014, the remaining 4 assets were sold for a total sales price of $58,400 and reduced the Company’s consolidated mortgage debt by $45,710.

(2) In May 2011, our Board of Trustees authorized management of the Company to sell this portfolio.  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.  The 18 non-core hotel properties in the portfolio were acquired by the Company between 1998 and 2006.  As a result of entering into these purchase and sale agreements for the 18 non-core assets mentioned above, we recorded an impairment loss in 2011 of approximately $30,248 for those consolidated assets for which the anticipated net proceeds did not exceed the carrying value.

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 years ended December 31, 2012 and 2011.  The 18 assets were sold for a total sales price of $155,000, reduced the Company’s consolidated mortgage debt by $61,298 and generated a gain on sale of approximately $4,910.   

NOTE 12 – DISCONTINUED OPERATIONS (CONTINUED)

(3) 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 years ended December 31, 2012 and 2011.  The transfer of the title resulted in a gain of approximately $1,216, since the outstanding mortgage loan payable exceeded the net book value of the property.