Investment in Unconsolidated Entities

6 Months Ended

Jun. 30, 2013

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Entities

Investment in Unconsolidated Entities

On April 17, 2013, the Company acquired a 5.0% interest in the Torrance JV with Cerberus. The Torrance JV acquired the 248-room Residence Inn by Marriott in Torrance, CA for $31.0 million. The Company's original investment of $1.7 million in the Torrance JV was funded through borrowings under the Company's secured revolving credit facility and with available cash. The Company accounts for this investment under the equity method. During the three and six months ended June 30, 2013 and 2012, the Company received cash distributions from the Torrance JV as follows (in thousands):

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Cash generated from financing activities	908		—		908		—
Total	$	908	$	—	$	908	$	—

The Company owns a 10.3% interest in the Innkeepers JV. The Company continues to account for this investment under the equity method. During the three and six months ended June 30, 2013 and 2012, the Company received cash distributions from the Innkeepers JV as follows (in thousands):

	For the three months ended				For the six months ended
	June 30,				June 30,
	2013		2012		2013		2012
Cash generated from other activities and excess cash	$	—	$	1,747	$	—	$	3,083
Cash generated from asset sales	—		4,368		—		4,368
Cash generated from financing activities	—		—		—		11,759
Total	$	—	$	6,115	$	—	$	19,210

The Company’s ownership interests in the Innkeepers JV and the Torrance JV are subject to change in the event that either the Company or Cerberus calls for additional capital contributions to the respective JV necessary for the conduct of business, including contributions to fund costs and expenses related to capital expenditures. The Company manages each JV and will receive a promote interest in the applicable JV if it meets certain return thresholds. Cerberus may also approve certain actions by each JV without the Company’s consent, including certain property dispositions conducted at arm’s length, certain actions related to the restructuring of each JV and removal of the Company as managing member in the event the Company fails to fulfill its material obligations under the applicable joint venture agreement.

The Innkeepers JV incurred $12.4 million and $24.5 million in depreciation expense during the three and six months ended June 30, 2013 and $12.3 million and $24.6 million during the three and six months ended June 30, 2012, respectively. The Torrance JV incurred $0.1 million and $0.1 million in depreciation expense during the three and six months ended June 30, 2013 and $0.0 million and $0.0 million three and six months ended June 30, 2012, respectively. The following table sets forth the components of net loss, including the Company’s share, related to both JVs for the three and six months ended June 30, 2013 (in thousands):

	For the three months ended					For the six months ended
	June 30,					June 30,
	2013			2012		2013			2012
Revenue	$	72,873		$	73,019	$	135,064		$	135,991
Total hotel operating expenses	39,555			41,121		76,385			79,848
Operating income	$	33,318		$	31,898	$	58,679		$	56,143
Net income (loss) from continuing operations	$	(648	)	$	6,836	$	(6,784	)	$	1,343
Total income (loss) from unconsolidated real estate entities attributable to Chatham	$	(89	)	$	703	$	(720	)	$	138