Investment in Hotel Properties

12 Months Ended

Dec. 31, 2019

Investment in hotel properties, net

Investment in hotel properties, net as of December 31, 2019 and 2018 consisted of the following (in thousands):


	December 31, 2019		December 31, 2018
Land and improvements	$	296,884	$	296,253
Building and improvements	1,216,849		1,214,780
Furniture, fixtures and equipment	81,707		73,411
Renovations in progress	31,589		25,370
	1,627,029		1,609,814
Less: accumulated depreciation	(279,913)		(236,041)
Investment in hotel properties, net	$	1,347,116	$	1,373,773

During the year ended December 31, 2017, the Company identified indicators of impairment at its Washington SHS, PA hotel, primarily due to decreased operating performance and continued economic weakness. As such, the Company was required to perform a test of recoverability. This test compared the sum of the estimated future undiscounted cash flows attributable to the hotel over our remaining anticipated holding period and its expected value upon disposition to our carrying value for the hotel. The Company determined that the estimated undiscounted future cash flow attributable to the hotel did not exceed its carrying value and an impairment existed. As a result, the Company recorded a $6.7 million impairment charge in the consolidated statements of operations during the year ended December 31, 2017. Fair value was determined based on a discounted cash flow model using our estimates of future cash flows and third-party market data, considered Level 3 inputs.

Investment in hotel properties under development

We are developing a hotel in Los Angeles, CA on a parcel of land owned by us. We have incurred $20.5 million of costs to date, which included $6.6 million of the land acquisition costs and $13.9 million of other development costs. We expect the total development costs for construction of the hotel to be approximately $65.0 million, which includes the cost of the land. We reclassified the $6.6 million of land acquisition costs from Land to Hotel Properties Under Development during the year ended December 31, 2019 in conjunction with the commencement of our development activities.