Favorable Lease Assets

9 Months Ended

Sep. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

In connection with the acquisition of certain hotels, we have recognized intangible assets for favorable ground leases and tenant leases. Our favorable lease assets, net of accumulated amortization of $2.5 million and $3.0 million as of September 30, 2015 and December 31, 2014, respectively, consist of the following (in thousands):



	September 30, 2015		December 31, 2014
Westin Boston Waterfront Hotel Ground Lease	$	18,131	$	18,293
Westin Boston Waterfront Hotel Lease Right	—		9,045
Hilton Minneapolis Ground Lease	5,704		5,760
Lexington Hotel New York Tenant Leases	193		1,031
Hilton Boston Downtown Tenant Leases	29		145
	$	24,057	$	34,274

Favorable lease assets are recorded at the acquisition date and are generally amortized using the straight-line method over the remaining non-cancelable term of the lease agreement. Amortization expense for the three months and nine months ended September 30, 2015 was approximately $0.1 million and $0.4 million, respectively.

We own a favorable lease asset related to the right to acquire a leasehold interest in a parcel of land adjacent to the Westin Boston Waterfront Hotel for the development of a 320 to 350 room hotel (the “lease right”). During the second quarter of 2015, we decided not to exercise the option to acquire the leasehold interest and recorded an impairment loss of $9.6 million, which includes the write-off of $0.6 million of other assets related to the lease right included within prepaid and other assets on the accompanying condensed consolidated balance sheets.

During the first quarter of 2015, we evaluated the Lexington Hotel New York favorable tenant leases for recoverability of the carrying value. The lease with one of the retail tenants at the Lexington Hotel New York was expected to terminate prior to the end of the lease term. We reviewed the favorable lease asset for impairment and concluded that the asset was not realizable and recorded an impairment loss of $0.8 million during the first quarter of 2015. The lease terminated in June 2015.