LEASES

12 Months Ended

Dec. 31, 2022

We own two hotels 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. Based on the nature of these leases, the Company assumed that all extension options would be fully executed in the measurement of the right of use assets and lease liabilities. Some of our land leases include variable payments, which are tied to an index such as the consumer price index or include rental payments based partially on the hotel revenues. Lease costs for our land leases are presented as Hotel Ground Rent in the Consolidated Statements of Operations.

We disposed of the following hotels during the year ended December 31, 2022 which had ground leases that were assumed by the buyers: the Courtyard Brookline, the Gate JFK Airport, Hotel Milo, and Towneplace Suites Sunnyvale. Right of Use Assets totaling $24,094 and Lease Liabilities totaling $33,829 were written off upon disposition.

Two additional office space leases are also factored into the lease liability and are classified as operating leases with terms ranging from March 2023 to December 2027. Our office space leases include variable payments for the Company's proportionate share of the building's property taxes, insurance, and common area maintenance. Lease costs for our office spaces are included in General and Administrative Expense in the Consolidated Statements of Operations.

The components of lease costs for the years ended December 31, 2022, 2021, and 2020 were as follows:


	For the Year Ended December 31, 2022
	Ground Lease		Office Lease		Total
Operating lease costs	$	3,391	$	483	$	3,874
Variable lease costs	962		260		1,222
Total lease costs	$	4,353	$	743	$	5,096


	For the Year Ended December 31, 2021
	Ground Lease		Office Lease		Total
Operating lease costs	$	4,228	$	483	$	4,711
Variable lease costs	172		298		470
Total lease costs	$	4,400	$	781	$	5,181


	For the Year Ended December 31, 2020
	Ground Lease		Office Lease		Total
Operating lease costs	$	4,153	$	483	$	4,636
Variable lease costs	139		253		392
Total lease costs	$	4,292	$	736	$	5,028

NOTE 6 – LEASES (CONTINUED)

Other information related to leases as of and for the years ended December 31, 2022 and 2021 is as follows:


	December 31, 2022			December 31, 2021
Cash paid from operating cash flows for operating leases	$	4,834		$	4,657
Weighted average remaining lease term in years	50.3			63.5
Weighted average discount rate	7.83		%	7.86		%

Maturities of lease liabilities as of December 31, 2022 are as follows:


	Amount
2023	$	2,140
2024	1,991
2025	2,011
2026	2,030
2027	2,051
Thereafter	70,676
Total undiscounted lease payments	80,899
Less imputed interest	(61,896)
Total lease liability	$	19,003

LEASES

The components of lease costs for the years ended December 31, 2022, 2021, and 2020 were as follows:


	For the Year Ended December 31, 2022
	Ground Lease		Office Lease		Total
Operating lease costs	$	3,391	$	483	$	3,874
Variable lease costs	962		260		1,222
Total lease costs	$	4,353	$	743	$	5,096


	For the Year Ended December 31, 2021
	Ground Lease		Office Lease		Total
Operating lease costs	$	4,228	$	483	$	4,711
Variable lease costs	172		298		470
Total lease costs	$	4,400	$	781	$	5,181


	For the Year Ended December 31, 2020
	Ground Lease		Office Lease		Total
Operating lease costs	$	4,153	$	483	$	4,636
Variable lease costs	139		253		392
Total lease costs	$	4,292	$	736	$	5,028

NOTE 6 – LEASES (CONTINUED)

Other information related to leases as of and for the years ended December 31, 2022 and 2021 is as follows:


	December 31, 2022			December 31, 2021
Cash paid from operating cash flows for operating leases	$	4,834		$	4,657
Weighted average remaining lease term in years	50.3			63.5
Weighted average discount rate	7.83		%	7.86		%

Maturities of lease liabilities as of December 31, 2022 are as follows:


	Amount
2023	$	2,140
2024	1,991
2025	2,011
2026	2,030
2027	2,051
Thereafter	70,676
Total undiscounted lease payments	80,899
Less imputed interest	(61,896)
Total lease liability	$	19,003