NOTE 3 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

As of March 31, 2016 and December 31, 2015, our investment in unconsolidated joint ventures consisted of the following:



		Percent	Preferred		March 31,		December 31,
Joint Venture	Hotel Properties	Owned	Return		2016		2015

SB Partners, LLC	Holiday Inn Express, South Boston, MA	50.0%	N/A	$	656	$	795
Hiren Boston, LLC	Courtyard by Marriott, South Boston, MA	50.0%	N/A		4,256		4,499
Mystic Partners, LLC	Hilton and Marriott branded hotels in CT	8.8%-66.7%	8.5% non-cumulative		4,941		5,022
				$	9,853	$	10,316

Income or loss from our unconsolidated joint ventures is allocated to us and our joint venture partners consistent with the allocation of cash distributions in accordance with the joint venture agreements. Any difference between the carrying amount of these investments and the underlying equity in net assets is amortized over the expected useful lives of the properties and other intangible assets.

Income recognized during the three months ended March 31, 2016 and 2015, for our investments in unconsolidated joint ventures is as follows:




		Three Months Ended March 31,
		2016		2015
SB Partners, LLC	$	(39)	$	(90)
Hiren Boston, LLC		(93)		(109)
Mystic Partners, LLC		(82)		(75)
Loss from Unconsolidated Joint Venture Investments	$	(214)	$	(274)

NOTE 3 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (CONTINUED)

The following tables set forth the total assets, liabilities, equity and components of net income or loss, including the Company’s share, related to the unconsolidated joint ventures discussed above as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015.



Balance Sheets
		March 31,		December 31,
		2016		2015
Assets
Investment in Hotel Properties, Net	$	105,229	$	105,354
Other Assets		14,723		15,558
Total Assets	$	119,952	$	120,912

Liabilities and Equity
Mortgages and Notes Payable	$	112,612	$	113,532
Other Liabilities		32,413		30,575
Equity:
Hersha Hospitality Trust		22,354		22,698
Joint Venture Partner(s)		(47,427)		(45,893)
Total Equity		(25,073)		(23,195)

Total Liabilities and Equity	$	119,952	$	120,912



Statements of Operations

		Three Months Ended March 31,
		2016		2015
Room Revenue	$	12,380	$	12,682
Other Revenue		4,702		5,069
Operating Expenses		(12,884)		(13,193)
Lease Expense		(305)		(276)
Property Taxes and Insurance		(761)		(755)
General and Administrative		(1,232)		(1,406)
Depreciation and Amortization		(1,673)		(1,566)
Interest Expense		(1,606)		(1,622)
Gain/(Loss) allocated to Noncontrolling Interests		33		(24)
Net Loss	$	(1,346)	$	(1,091)

NOTE 3 – INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (CONTINUED)

The following table is a reconciliation of the Company’s share in the unconsolidated joint ventures’ equity to the Company’s investment in the unconsolidated joint ventures as presented on the Company’s balance sheets as of March 31, 2016 and December 31, 2015.



		March 31,		December 31,
		2016		2015
Company's share of equity recorded on the joint ventures' financial statements	$	22,354	$	22,698
Adjustment to reconcile the Company's share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures(1)		(12,501)		(12,382)
Investment in Unconsolidated Joint Ventures	$	9,853	$	10,316

(1) Adjustment to reconcile the Company's share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following:

cumulative impairment of the Company’s investment in joint ventures not reflected on the joint ventures' financial statements;

the Company’s basis in the investment in joint ventures not recorded on the joint ventures' financial statements; and

accumulated amortization of the Company’s equity in joint ventures that reflects the Company’s portion of the excess of the fair value of joint ventures' assets on the date of our investment over the carrying value of the assets recorded on the joint ventures financial statements (this excess investment is amortized over the life of the properties, and the amortization is included in Income (Loss) from Unconsolidated Joint Venture Investments on the Company’s consolidated statement of operations).