LEASES

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

LEASES

LEASESe own four hotels (the Gate hotel JFK Airport, the Hilton Garden Inn JFK, the Hotel Milo Santa Barbara, and the Annapolis Waterfront Hotel) within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms with extension options that range from August 2064 to October 2103. We also have two additional office space leases with terms ranging from March 2023 to December 2027. Lease costs for our office spaces are included in General and Administrative expense.

The components of lease costs for the three months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Ground Lease		Office Lease		Total		Ground Lease		Office Lease		Total
Operating lease costs	$	943	$	121	$	1,064	$	1,050	$	121	$	1,171
Variable lease costs	242		47		289		79		59		138
Total lease costs	$	1,185	$	168	$	1,353	$	1,129	$	180	$	1,309

The components of lease costs for the nine months ended September 30, 2022 and 2021 were as follows:

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	Ground Lease		Office Lease		Total		Ground Lease		Office Lease		Total
Operating lease costs	$	3,045	$	363	$	3,408	$	3,176	$	363	$	3,539
Variable lease costs	761		203		964		117		227		344
Total lease costs	$	3,806	$	566	$	4,372	$	3,293	$	590	$	3,883

Other information related to leases as of and for the nine months ended September 30, 2022 and 2021 is as follows:

	September 30, 2022			September 30, 2021
Cash paid from operating cash flow for operating leases	$	4,080		$	3,457
Weighted average remaining lease term (in years)	66.4			63.5
Weighted average discount rate	7.87		%	7.86		%

As noted in Note 2 - Investment in Hotel Properties, on August 4, 2022, we sold the TownePlace Suites Sunnyvale, CA, which was subject to a land lease which was assumed by the buyer. We sold the Hotel Milo Santa Barbara on October 6, 2022 and the ground lease was assumed by the buyer. We expect the sale of the Gate hotel JFK Airport to close in the fourth quarter of 2022, subject to customary closing conditions, at which time the buyer will assume the ground lease.

LEASES

LEASESe own four hotels (the Gate hotel JFK Airport, the Hilton Garden Inn JFK, the Hotel Milo Santa Barbara, and the Annapolis Waterfront Hotel) within our consolidated portfolio of hotels where we do not own the land on which the hotels reside, rather we lease the land from an unrelated third-party lessor. All of our land leases are classified as operating leases and have initial terms with extension options that range from August 2064 to October 2103. We also have two additional office space leases with terms ranging from March 2023 to December 2027. Lease costs for our office spaces are included in General and Administrative expense.

The components of lease costs for the three months ended September 30, 2022 and 2021 were as follows:

	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Ground Lease		Office Lease		Total		Ground Lease		Office Lease		Total
Operating lease costs	$	943	$	121	$	1,064	$	1,050	$	121	$	1,171
Variable lease costs	242		47		289		79		59		138
Total lease costs	$	1,185	$	168	$	1,353	$	1,129	$	180	$	1,309

The components of lease costs for the nine months ended September 30, 2022 and 2021 were as follows:

	Nine months ended September 30, 2022						Nine months ended September 30, 2021
	Ground Lease		Office Lease		Total		Ground Lease		Office Lease		Total
Operating lease costs	$	3,045	$	363	$	3,408	$	3,176	$	363	$	3,539
Variable lease costs	761		203		964		117		227		344
Total lease costs	$	3,806	$	566	$	4,372	$	3,293	$	590	$	3,883

Other information related to leases as of and for the nine months ended September 30, 2022 and 2021 is as follows:

	September 30, 2022			September 30, 2021
Cash paid from operating cash flow for operating leases	$	4,080		$	3,457
Weighted average remaining lease term (in years)	66.4			63.5
Weighted average discount rate	7.87		%	7.86		%

As noted in Note 2 - Investment in Hotel Properties, on August 4, 2022, we sold the TownePlace Suites Sunnyvale, CA, which was subject to a land lease which was assumed by the buyer. We sold the Hotel Milo Santa Barbara on October 6, 2022 and the ground lease was assumed by the buyer. We expect the sale of the Gate hotel JFK Airport to close in the fourth quarter of 2022, subject to customary closing conditions, at which time the buyer will assume the ground lease.