DISCONTINUED OPERATIONS

9 Months Ended

Sep. 30, 2011

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.

In September 2009, our Board of Trustees authorized management of the Company to sell the Holiday Inn Express, New Columbia, PA.  The operating results for this hotel were reclassified to discontinued operations in the statements of operations for the three and nine months ended September 30, 2010.  The hotel was acquired by the Company in January 1999 and was sold to an unrelated buyer in July 2010 for consideration of $3,000 with a gain on sale of $345.

Our Board of Trustees authorized management of the Company to sell the Comfort Inn, West Hanover, PA in May 2011.  The operating results for this hotel were reclassified to discontinued operations in the statements of operations for the three and nine months ended September 30, 2011 and 2010.  The hotel was acquired by the Company in May 1998 and was sold to an unrelated buyer in July 2011 for consideration of $5,250 with a gain on sale of approximately $967.

On August 15, 2011, the company entered into two purchase and sale agreements to dispose of a portfolio of 18 non-core hotel properties for an aggregate purchase price of approximately $155,000. Four of the properties included in the purchase and sale agreements are owned in part by the Company through an unconsolidated joint venture.  See “Note 3 – Investment in Unconsolidated Joint Ventures” for information on these four properties. On May 2011, our Board of Trustees authorized management of the Company to sell this portfolio.  The operating results of this portfolio were reclassified to discontinued operations in the statement of operations for the three and nine months ended September 30, 2011 and 2010.  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, we have recorded an impairment loss of approximately $30,248 for those consolidated assets for which the anticipated net proceeds do not exceed the carrying value.  These purchase and sale agreements provide that sales of the individual properties may close at different times, and ultimately not all properties may transfer.  However, management believes all sales of all such properties will close and anticipate recording a gain of approximately $4,900 for those consolidated hotel properties in which the carrying value exceeds the purchase price, which will be recorded upon their disposition.

Assets held for sale and liabilities related to assets held for sale consisted of the following as of September 30, 2011:

	September 30, 2011
Land	$	12,313
Buildings and Improvements		100,399
Furniture, Fixtures and Equipment		28,459
		141,171
Less Accumulated Depreciation		(47,341	)
Assets Held for Sale	$	93,830
Liabilities Related to Assets Held for Sale	$	62,160

The following table sets forth the components of discontinued operations for the three and nine months ended September 30, 2011 and 2010:

	Three Months Ended						Nine Months Ended
	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
Revenue:
Hotel Operating Revenues	$	12,647		$	12,110		$	33,222		$	32,453
Other Revenues		10			12			35			38
Total Revenues		12,657			12,122			33,257			32,491
Expenses:
Hotel Operating Expenses	$	7,645		$	8,076		$	21,340		$	21,822
Hotel Ground Rent		112			108			329			325
Real Estate and Personal Property Taxes and Property Insurance		510			568			1,527			1,669
General and Administrative		(5	)		1			14			11
Acquisition and Termination Transaction Costs		-			-			(25	)		20
Interest Expense		1,042			1,143			3,113			3,607
Depreciation and Amortization		1,229			1,946			4,855			5,997
Other Expense		2			(3	)		2			(3	)
Loss on Debt Extinguishment		22			-			22			3
Total Expenses		10,557			11,839			31,177			33,451
Income (Loss) from Discontinued Operations	$	2,100		$	283		$	2,080		$	(960	)