Acquisition and Disposition of Hotel Properties

6 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisition and Disposition of Hotel Properties

Acquisition and Disposition of Hotel Properties

Acquisitions

On May 11, 2022, the Company acquired the 119-room Inn on Fifth in Naples, Florida for $156.0 million, excluding prorations and transactions costs. This transaction was funded with cash on hand, the issuance of 16,291 common units of limited partnership interest in the Operating Partnership and 3,104,400 preferred units of the Operating Partnership designated as 6.0% Series Z Preferred Units.

On June 23, 2022, the Company acquired the 257-room Gurney's Newport Resort & Marina in Newport, Rhode Island for $174.0 million, using cash on hand and proceeds from its senior unsecured revolving credit facility. The property was acquired as part of a reverse 1031 Exchange in which the Company engaged a qualified intermediary to establish a trust to hold the property pending completion of the sale of the subject property or properties related to the reverse 1031 Exchange. The trust was deemed to be a variable interest entity (VIE) for which the Company is the primary beneficiary, and therefore, the Company has consolidated the trust and property.

Dispositions

The following table summarizes disposition transactions during 2022 and 2021 (in thousands):

Hotel Property Name	Location	Sale Date	Sale Price
The Marker San Francisco	San Francisco, CA	June 28, 2022	$	77,000
2022 Total			$	77,000
Sir Francis Drake	San Francisco, CA	April 1, 2021	$	157,625
The Roger New York	New York, NY	June 10, 2021	19,000
Villa Florence San Francisco on Union Square	San Francisco, CA	September 9, 2021	87,500
2021 Total			$	264,125

For the three and six months ended June 30, 2022, the accompanying consolidated statements of operations and comprehensive income included operating income (loss) of $(0.2) million and $(1.4) million, respectively, excluding impairment loss and (gain) loss on sale of hotel properties related to the hotel property sold.

For the three and six months ended June 30, 2021, the accompanying consolidated statements of operations and comprehensive income included operating income (loss) of $(3.0) million and $(9.1) million, respectively, excluding impairment loss and (gain) loss on sale of hotel properties related to the hotel properties sold.

The sales of the hotel properties described above did not represent a strategic shift that had a major effect on the Company’s operations and financial results and, therefore, did not qualify as discontinued operations.

Held for Sale

As of June 30, 2022, the Company had entered into agreements to sell two hotel properties in separate transactions for an aggregate sales price of approximately $151.0 million. These hotels were designated as held for sale as they met all of the Company's held for sale criteria. Accordingly, the Company classified all of the assets and liabilities related to these hotels as assets and liabilities held for sale in the accompanying consolidated balance sheets and ceased depreciating the assets. The Company expects to complete the sales of these properties in the third quarter of 2022.