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Investment In Unconsolidated Joint Ventures
 6 Months Ended
Jun. 30, 2019
Equity Method Investments and Joint Ventures [Abstract]  
Investment In Unconsolidated Joint Ventures
As of June 30, 2019 and December 31, 2018, our investment in unconsolidated joint ventures consisted of the following:
 
 
 

 
 
 
Percent
 
 
 
 
Joint Venture
 
Hotel Properties
 
Owned
 
June 30, 2019
 
December 31, 2018

 
 
 
 
 
 
 
 
Cindat Hersha Owner JV, LLC
 
Hilton and IHG branded hotels in NYC
 
31.2
%
 
—

 
—

Hiren Boston, LLC
 
Courtyard by Marriott, South Boston, MA
 
50.0
%
 
2,017

 
1,879

SB Partners, LLC
 
Holiday Inn Express, South Boston, MA
 
50.0
%
 
$
—

 
$
1,125

SB Partners Three, LLC
 
Home2 Suites, South Boston, MA
 
50.0
%
 
4,967

 
1,000


 
 
 
 
 
$
6,984

 
$
4,004


 
On September 27, 2018, we entered into a joint venture agreement with JHM SB Three Member, LLC which will own a Home2 Suites located in South Boston, MA. Each partner will have a 50% interest of this asset, which is currently under development and is expected to open in 2020. At the onset of the agreement, each partner contributed $1,000 and any additional contributions will be made equally by each party.

During the six months ended June 30, 2019, we received a distribution of $1,500 from SB Partners, LLC. This distribution exceeded our accounting basis in this joint venture resulting in a $0 investment balance as of June 30, 2019.

Income/Loss Allocation

Cindat Hersha Owner JV, LLC cash available for distribution will be distributed to (1) Cindat until they receive a return on their contributed $142,000 senior common equity interest, currently at 9.0%, and (2) then to us until we receive an 8% return on our contributed $64,357 junior common equity interest. Any cash available for distribution remaining will be split 31.2% to us and 68.8% to Cindat. Cindat’s senior common equity return is reduced by 0.5% annually for 4 years following the closing until it is set at a rate of 8% for the remainder of the life of the joint venture.  As of June 30, 2019, based on the income allocation methodology described above, the Company has absorbed cumulative losses equal to our accounting basis in the joint venture resulting in a $0 investment balance in the table above, however, we currently maintain a positive equity balance within the venture. This difference is due to difference in our basis inside the venture versus our basis outside of the venture, which is explained later in this note.
 
For SB Partners, LLC, Hiren Boston, LLC, and SB Partners Three, LLC, income or loss is allocated to us and our joint venture partners consistent with the allocation of cash distributions in accordance with the joint venture agreements. This results in an income allocation consistent with our percentage of ownership interests.
 
Any difference between the carrying amount of any of our investments noted above and the underlying equity in net assets is amortized over the expected useful lives of the properties and other intangible assets. 

Income (loss) recognized during the three and six months ended June 30, 2019 and 2018, for our investments in unconsolidated joint ventures is as follows:
 

 
Three Months Ended June 30,
 
Six Months Ended June 30,

 
2019
 
2018
 
2019
 
2018
Cindat Hersha Owner JV, LLC
 
—

 
—

 
—

 
—

Hiren Boston, LLC
 
315

 
356

 
138

 
249

SB Partners, LLC
 
$
—

 
$
181

 
$
375

 
$
87

SB Partners Three, LLC
 
(16
)
 
—

 
(33
)
 
—

Income from Unconsolidated Joint Venture Investments
 
$
299

 
$
537

 
$
480

 
$
336



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 June 30, 2019 and December 31, 2018 and for the three and six months ended June 30, 2019 and 2018.

Balance Sheets
 
 

 
June 30, 2019
 
December 31, 2018
Assets
 
 
 
 
Investment in Hotel Properties, Net
 
$
566,800

 
$
569,609

Other Assets
 
39,787

 
30,088

Total Assets
 
$
606,587

 
$
599,697


 
 
 
 
Liabilities and Equity
 
 
 
 
Mortgages and Notes Payable
 
$
422,860

 
$
422,205

Other Liabilities
 
18,740

 
7,478

Equity:
 
 
 
 
Hersha Hospitality Trust
 
9,068

 
15,554

Joint Venture Partner(s)
 
156,909

 
155,053

Accumulated Other Comprehensive Loss
 
(990
)
 
(593
)
Total Equity
 
164,987

 
170,014


 
 
 
 
Total Liabilities and Equity
 
$
606,587

 
$
599,697

Statements of Operations
 

 
Three Months Ended June 30,
 
Six Months Ended June 30,

 
2019
 
2018
 
2019
 
2018
Room Revenue
 
$
26,995

 
$
26,682

 
$
43,346

 
$
43,414

Other Revenue
 
622

 
505

 
1,243

 
964

Operating Expenses
 
(11,890
)
 
(11,572
)
 
(21,921
)
 
(21,728
)
Lease Expense
 
(164
)
 
(164
)
 
(365
)
 
(329
)
Property Taxes and Insurance
 
(3,051
)
 
(2,906
)
 
(6,103
)
 
(5,816
)
General and Administrative
 
(1,505
)
 
(1,477
)
 
(2,711
)
 
(2,601
)
Depreciation and Amortization
 
(3,694
)
 
(3,190
)
 
(7,354
)
 
(6,368
)
Interest Expense
 
(7,196
)
 
(6,326
)
 
(14,343
)
 
(12,064
)
Loss on Debt Extinguishment
 
—

 
—

 
—

 
(7,284
)
Net Income (Loss)
 
$
117

 
$
1,552

 
$
(8,208
)
 
$
(11,812
)


The following table is a reconciliation of our share in the unconsolidated joint ventures’ equity to our investment in the unconsolidated joint ventures as presented on our balance sheets as of June 30, 2019 and December 31, 2018.
 

 
June 30, 2019
 
December 31, 2018
Our share of equity recorded on the joint ventures' financial statements
 
$
9,068

 
$
15,554

Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures(1)
 
(2,084
)
 
(11,550
)
Investment in Unconsolidated Joint Ventures
 
$
6,984

 
$
4,004

 

(1)  Adjustment to reconcile our share of equity recorded on the joint ventures' financial statements to our investment in unconsolidated joint ventures consists of the following:
 
•
the difference between our basis in the investment in joint ventures and the equity recorded on the joint ventures' financial statements;
•
accumulated amortization of our equity in joint ventures that reflects the difference in our portion of the fair value of joint ventures' assets on the date of our investment when compared to the carrying value of the assets recorded on the joint ventures’ financial statements (this excess or deficit investment is amortized over the life of the properties, and the amortization is included in Income (Loss) from Unconsolidated Joint Venture Investments on our consolidated statement of operations); and
•
cumulative impairment of our investment in joint ventures not reflected on the joint ventures' financial statements, if any.