Investment in Hotel Properties

6 Months Ended

Jun. 30, 2021

Investment in Hotel Properties

Investment in Hotel Properties

3. Investment in Hotel Properties

Investment in hotel properties, net consisted of the following (in thousands):

	June 30,		December 31,
	2021		2020
	(unaudited)
Land	$	611,538	$	571,212
Buildings and improvements		2,725,893		2,523,750
Furniture, fixtures and equipment		452,610		431,918
Intangible assets		34,891		21,192
Franchise fees		743		743
Construction in progress		27,082		15,831
Investment in hotel properties, gross		3,852,757		3,564,646
Accumulated depreciation and amortization		(1,165,362)		(1,103,148)
Investment in hotel properties, net	$	2,687,395	$	2,461,498

In April 2021, the Company purchased the fee simple interest in the newly-developed 130-room Montage Healdsburg, California for $265.0 million, excluding acquisition costs and prorations. The acquisition was funded through the issuance of 2,650,000 shares of Series G Cumulative Redeemable Preferred Stock (the “Series G preferred stock”) with an aggregate liquidation preference of $66.3 million (see Note 9), as well as cash on hand.

As part of the purchase price allocation for the Montage Healdsburg, the Company allocated a total of $13.7 million to intangible assets related to the hotel’s residential rental and social membership programs, whereby future owners of the adjacent separately owned Montage Residences Healdsburg will be eligible to participate in an optional rental program as well as become social members of the Montage Healdsburg to access use of the hotel’s facilities. The $13.7 million will be amortized over the life of the related remaining 25-year resort management agreement once the hotel begins to recognize revenue related to the programs.