Investment in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2011

Investment in Unconsolidated Joint Ventures [Abstract]

Investment in Unconsolidated Joint Ventures

NOTE 5. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

On July 29, 2011, the Company acquired a 49% interest in a joint venture (the "Manhattan Collection joint venture"), which owns six properties in New York, New York, for $152.6 million plus working capital. The transaction values the six hotels at approximately $908.0 million (subject to working capital and similar adjustments). The Company accounts for this investment using the equity method. The joint venture has approximately $549.0 million in total assets. The joint venture's total liabilities and members' deficit include approximately $581.0 million in existing first mortgage and mezzanine debt which matures in February 2013 and approximately $76.6 million of preferred capital which may be distributed after the later of 27 months from July 29, 2011 or the date on which the joint venture refinances, modifies, or extends its debt. The Company is not a guarantor of any existing debt of the joint venture except for limited customary carve-outs related to fraud or misapplication of funds.

At the time of the Company's investment, the estimated fair value of the hotel properties owned by the Manhattan Collection joint venture exceeded the carrying value. This basis difference between the Company's investment in the joint ventures and the Company's proportionate 49% interest in these depreciable assets held by the joint venture is amortized over the estimated life of the underlying assets and recognized as a component of equity in earnings of unconsolidated joint ventures (referred to as the basis adjustment in the table below).

The summarized results of operations of our investment in the Manhattan Collection joint venture from the acquisition date to December 31, 2011 are presented below (in thousands):


	For the Period from July 29, 2011 (date of investment) through December 31, 2011
Revenues	$	82,124
Total expenses		75,992

Net income		6,132
Company's 49% interest of net income		3,005
Basis adjustment		(669	)

Equity in earnings in unconsolidated joint ventures	$	2,336

- Definition

The entire disclosure for equity investment, or group of investments, for which combined disclosure is appropriate, including: (a) the name of each investee and percentage of ownership of common stock, (b) accounting policies for investments in common stock, (c) difference between the amount at which the investment is carried and the amount of underlying equity in net assets and the accounting treatment of the difference, (d) the total fair value of each identified investment for which a market value is available, (e) summarized information as to assets, liabilities, and results of operations of the investees (for investments in unconsolidated subsidiaries, common stock of joint ventures, or other investments using the equity method), and (f) material effects of possible conversions, exercises, or contingent issuances of the investee. Other disclosures include (a) the names of any investee in which the investor owns 20 percent or more of the voting stock and investment is not accounted for using the equity method, and the reasons why not, and (b) the names of any investee in which the investor owns less than 20 percent of the voting stock and the investment is accounted for using the equity method, and the reasons why it is.

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