Investment in Hotel Properties

9 Months Ended

Sep. 30, 2022

Investment in Hotel Properties

Investment in Hotel Properties

3. Investment in Hotel Properties

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

	September 30,		December 31,
	2022		2021
	(unaudited)
Land	$	672,531	$	604,692
Buildings and improvements		2,780,117		2,729,461
Furniture, fixtures and equipment		423,546		431,780
Intangible assets		42,408		43,117
Construction in progress		65,121		41,260
Investment in hotel properties, gross		3,983,723		3,850,310
Accumulated depreciation and amortization		(1,133,498)		(1,130,294)
Investment in hotel properties, net	$	2,850,225	$	2,720,016

In June 2022, the Company purchased the fee-simple interest in the 339-room The Confidante Miami Beach, Florida for a contractual purchase price of $232.0 million. The acquisition was funded from available cash and with $140.0 million of proceeds received from the Company’s revolving credit facility (see Note 7). As part of the purchase price allocation for The Confidante Miami Beach, the Company allocated $0.5 million to intangible assets related to an in-place lease agreement. The $0.5 million will be amortized over the remaining five-year life of the lease.

In June 2022, the Company acquired the 25.0% noncontrolling partner’s ownership interest in the Hilton San Diego Bayfront for a contractual purchase price of $102.0 million plus 25.0% of closing date working capital and cash. The Company paid a preliminary purchase price of $101.3 million on the closing date based on estimated working capital and cash amounts, with the actual amounts to be determined in the fourth quarter of 2022. Following this acquisition, the Company owns 100% of the hotel. The acquisition was funded from available cash and with $90.0 million of proceeds received from the Company’s revolving credit facility (see Note 7). The transaction was accounted for as an equity transaction. The acquisition date noncontrolling interest balance of $38.8 million was reclassified to additional paid in capital. In addition, the $62.5 million of excess cash paid to acquire the 25.0% noncontrolling partner’s ownership interest was classified as additional paid in capital. No gain or loss was recognized in the accompanying consolidated statements of operations for either the three or nine months ended September 30, 2022 related to the acquisition.