Acquisition of Hotel Properties

6 Months Ended

Jun. 30, 2013

Business Combinations [Abstract]

Acquisition of Hotel Properties

Acquisition of Hotel Properties

Acquisition of Hotel Properties

On February 5, 2013, the Company acquired the 197-room Houston CY Hotel for a purchase price of $34.8 million, plus customary pro-rated amounts and closing costs. The Company funded the acquisition with available cash and borrowings under the Company’s secured revolving credit facility.

On June 17, 2013, the Company acquired the 178-room Pittsburgh Hotel for a purchase price of $40.0 million, plus customary pro-rated amounts and closing costs. The Company funded the acquisition with a $24.2 million mortgage loan and with borrowings under the Company's secured revolving credit facility.

The Company incurred acquisition costs of $1.1 million and $1.2 million, respectively, during the three and six months ended June 30, 2013 and $44 thousand and $83 thousand, respectively, during the three and six months ended June 30, 2012.

Hotel Purchase Price Allocation

The allocation of the purchase price of each of the hotels, based on the fair value on the date of its acquisition was (in thousands):

	Houston CY, TX Acquisition			Pittsburgh Hotel Acquisition
Acquisition date	2/5/2013			6/17/2013
Land	$	5,600		$	3,000
Building and improvements	27,350			35,576
Furniture, fixtures and equipment	1,800			1,424
Cash	3			6
Accounts receivable	7			5
Prepaid expenses and other assets	10			—
Accounts payable and accrued expenses	(3		)	—
Net assets acquired	$	34,767		$	40,011
Net assets acquired, net of cash	$	34,764		$	40,005

     The amount of revenue and operating income of the Houston CY, TX acquisition included in the consolidated income statement for the three and six months ended June 30, 2013 is $2.1 million and $3.6 million, respectively and $1.1 million and $1.8 million, respectively. The amount of revenue and operating income of the Pittsburgh acquisition included in the consolidated income statement for the three and six months ended June 30, 2013 is $0.3 million and $0.2 million, respectively.

Pro Forma Financial Information

The following condensed pro forma financial information presents the results of operations as if the hotels acquired in the three and six months ended June 30, 2013 and 2012 had taken place on January 1, 2012. The unaudited pro forma results have been prepared for comparative purposes only and are not necessarily indicative of what actual results of operations would have been had the acquisitions taken place on January 1, 2012, nor do they purport to represent the results of operations for future periods (in thousands, except share and per share data).

	For the three months ended				For the For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Pro forma total revenue	$	32,592	$	30,034	$	60,382	$	56,000
Pro forma net income	$	2,427	$	1,067	$	658	$	(951	)
Pro forma income per share:
Basic	$	0.13	$	0.08	$	0.04	$	(0.07	)
Diluted	$	0.13	$	0.08	$	0.04	$	(0.07	)
Weighted average Common Shares Outstanding
Basic	18,147,108		13,810,190		17,682,199		13,802,588
Diluted	18,383,626		13,915,313		17,897,255		13,802,588