Acquisition of Hotel Properties

3 Months Ended

Mar. 31, 2013

Business Combinations [Abstract]

ACQUISITION OF HOTEL PROPERTIES

Acquisition of Hotel Properties

On January 29, 2013, the Company acquired the 337-suite Embassy Suites San Diego Bay-Downtown located in San Diego, California for $112.5 million. The acquisition was funded with $45.8 million of available cash and the assumption of a $66.7 million first mortgage loan. The fixed rate mortgage loan that was assumed was determined to have an interest rate that is above the current market interest rate. The Company recorded a $4.8 million mortgage loan premium for the above market interest that is amortized as a reduction in interest expense through the maturity of the loan.

The allocation of fair value to the acquired assets and liabilities is as follows (in thousands).

	Embassy Suites San Diego Bay-Downtown
Land	$	20,103
Buildings and improvements	90,162
Furniture, fixtures and equipment	6,881
Above market rate contracts	(4,751		)
Mortgage debt	(66,732		)
In place lease assets	66
Net working capital	39
Net assets acquired	$	45,768

The following unaudited pro forma financial information presents the results of operations of the Company for the three months endedMarch 31, 2013 and 2012 as if the hotels acquired in 2013 and 2012 were acquired on January 1, 2012 and 2011, respectively. The following hotels' pro forma results are included in the pro forma table below: Hotel Zetta (formerly Hotel Milano), Hotel Vintage Park Seattle, Hotel Vintage Plaza Portland, W Los Angeles - Westwood, Hotel Palomar San Francisco and Embassy Suites San Diego Bay-Downtown. The pro forma results below excluded acquisition costs of $0.9 million and $0.2 million for the three months endedMarch 31, 2013 and 2012, respectively. The unaudited pro forma results have been prepared for comparative purposes only and do not purport to be indicative of either the results of operations that would have actually occurred had these transactions occurred on January 1, 2012 and 2011 or the future results of operations (in thousands, except per-share data).

	For the three months ended March 31,
	2013			2012
	(Unaudited)
Total revenues	$	106,550		$	100,455
Operating income (loss)	5,106			3,728
Net income (loss) attributable to common shareholders	(5,344		)	(5,136		)
Net income (loss) per share available to common shareholders — basic and diluted	$	(0.09	)	$	(0.09	)

For the three months endedMarch 31, 2013, the Company's consolidated statements of operations included $4.2 million of revenues and $2.1 million of hotel operating expenses related to the operations of the Embassy Suites San Diego Bay - Downtown hotel acquired in 2013.