3. Investment in Real Estate

The Company’s investment in real estate consisted of the following (in thousands):

	March 31,			December 31,
	2017			2016

Land	$	710,191		$	707,878
Building and Improvements		4,284,509			4,270,095
Furniture, Fixtures and Equipment		398,156			391,421
Franchise Fees		11,702			11,692
		5,404,558			5,381,086
Less Accumulated Depreciation		(601,055	)		(557,597	)
Investment in Real Estate, net	$	4,803,503		$	4,823,489

As of March 31, 2017, the Company owned 236 hotels with an aggregate of 30,203 rooms located in 33 states, including one hotel with 224 rooms classified as held for sale, which was sold in April 2017.

On February 2, 2017, the Company closed on the purchase of a newly constructed 124-room Courtyard by Marriott in Fort Worth, Texas, the same day the hotel opened for business, for a gross purchase price of approximately $18.0 million, excluding capitalized transaction costs. The Company used borrowings under its revolving credit facility to purchase the hotel. The acquisition of this hotel property was accounted for as an acquisition of a group of assets, with costs incurred to effect the acquisition, which were not significant, capitalized as part of the cost of the assets acquired.

There were no acquisitions during the three month period ended March 31, 2016.

The Company leases all of its hotels to its wholly-owned taxable REIT subsidiary (or a subsidiary thereof) under master hotel lease agreements.

As of March 31, 2017, the Company had outstanding contracts for the potential purchase of four additional hotels for a total purchase price of $103.3 million. All four hotels are under construction and are planned to be completed and opened for business over the next six to 18 months from March 31, 2017, at which time closing on these hotels is expected to occur. Although the Company is working towards acquiring these hotels, there are many conditions to closing that have not yet been satisfied and there can be no assurance that a closing on these hotels will occur under the outstanding purchase contracts. The following table summarizes the location, brand, date of purchase contract, expected number of rooms, refundable (if the seller does not meet its obligations under the contract) contract deposits paid, and gross purchase price for each of the contracts outstanding at March 31, 2017. All dollar amounts are in thousands.

Location	Brand	Date of Purchase Contract	Rooms		Refundable Deposits		Gross Purchase Price
Birmingham, AL (a)(b)	Home2 Suites	8/28/2015		105	$	3	$	19,219
Birmingham, AL (a)(b)	Hilton Garden Inn	8/28/2015		105		2		19,219
Phoenix, AZ (a)	Hampton	10/25/2016		210		500		44,100
Orlando, FL (a)	Home2 Suites	1/18/2017		128		3		20,736
				548	$	508	$	103,274

(a) As of March 31, 2017, these hotels were under construction. The table shows the expected number of rooms upon hotel completion and the expected franchise brands. Assuming all conditions to closing are met, the purchases of these hotels are expected to close over the next six to 18 months from March 31, 2017. If the seller meets all of the conditions to closing, the Company is obligated to specifically perform under the contract. As the property is under construction, at this time, the seller has not met all of the conditions to closing.

(b) The Home2 Suites and Hilton Garden Inn hotels in Birmingham, AL are part of an adjoining two-hotel complex located on the same site.

The Company intends to use borrowings under its revolving credit facility to purchase the hotels under contract if a closing occurs.

During the first quarter of 2017, the Company identified two properties for potential sale (the Columbus, Georgia SpringHill Suites and TownePlace Suites hotels). In April 2017, the Company entered into separate contracts with the same unrelated party for the sale of these properties for a total combined gross sales price of approximately $10.0 million. The contracts are subject to a number of conditions to closing and therefore there can be no assurance that closings will occur. If the closings occur, each of these sales are expected to be completed within six months of March 31, 2017. The Company plans to use the net proceeds from the sales to pay down borrowings on its revolving credit facility. Due to the change in the anticipated hold period for each of these hotels, the Company reviewed the estimated undiscounted cash flows generated by each property (including its sale price, net of estimated selling costs) and determined that, for each hotel, the undiscounted cash flows were less than its carrying value; therefore the Company recognized an impairment loss of approximately $7.9 million in the first quarter of 2017 to adjust the bases of these properties to their estimated fair values, which were based on the contracted sale price, net of estimated selling costs, a Level 1 input under the fair value hierarchy. Since the contracts for the sales of these properties had not been finalized as of March 31, 2017, the assets and liabilities related to these properties have not been classified as held for sale in the Company’s consolidated balance sheet at March 31, 2017.