SUPPLEMENTAL BALANCE SHEET INFORMATION

Investment in Real Estate Loans

Investment in real estate loans, net at December 31, 2017 and 2016 includes (in thousands):



	2017		2016
Real estate loans (net of discount of $5.8 million at December 31, 2017)	$	12,356	$	10,085
HIT Loan (net of deferred gain of $15.0 million at December 31, 2016)	—		7,500
	$	12,356	$	17,585

We are a mezzanine lender on three construction loans to fund up to an aggregate of $29.6 million for the development of three hotel properties. The three real estate loans closed in the fourth quarter of 2017 and each has a stated interest rate of 8% and an initial term of approximately three years. As of December 31, 2017, we have funded $17.9 million on the loans. We have separate options related to each loan (each the "Initial Option") to purchase a 90% interest in each joint venture that owns the hotels upon completion of construction. We also have the right to purchase the remaining interests in each joint venture at future dates, generally five years after we exercise our Initial Option. We have recorded the aggregate estimated fair value of the Initial Options totaling $6.1 million in Other assets and as a discount to the related real estate loans. The discount will be amortized as a component of interest income over the term of the real estate loans using the straight-line method, which approximates the interest method. We recorded amortization of the discount of $0.3 million during the year ended December 31, 2017.

At December 31, 2016, we had an outstanding real estate note receivable totaling $10.1 million. The note had an interest rate of 10.0% per annum paid monthly and an initial maturity date of May 31, 2017. On January 12, 2017, the borrower exercised an option to extend the maturity date until May 13, 2018. On August 1, 2017, the borrower repaid our note receivable in full.

On March 31, 2017, HIT repaid the remaining $22.5 million principal balance of the Loan and PIK interest of $1.2 million. As such, we recognized as income during the year ended December 31, 2017 the remaining $15.0 million of the deferred gain related to the sale of six hotels to HIT (See "Note 3 - Investment in Hotel Properties" for further details).

Restricted Cash

Restricted cash at December 31, 2017 and 2016 was as follows (in thousands):



	2017		2016
FF&E reserves	$	25,812	$	22,000
Property taxes	2,726		2,220
Other	924		661
	$	29,462	$	24,881

Prepaid Expenses and Other

Prepaid expenses and other at December 31, 2017 and 2016 included the following (in thousands):



	2017		2016
Prepaid insurance	$	3,020	$	2,218
Other	6,434		4,256
	$	9,454	$	6,474

Deferred Charges

Deferred charges at December 31, 2017 and 2016 were as follows (in thousands):



	2017			2016
Initial franchise fees	$	6,894		$	5,101
Less - accumulated amortization	(1,673		)	(1,374		)
	$	5,221		$	3,727

Amortization expense for the years ended December 31, 2017, 2016, and 2015 was $0.4 million, $0.3 million and $0.4 million, respectively.

Other Assets

Other assets at December 31, 2017 and 2016 included the following (in thousands):



	2017		2016
Purchase options related to real estate loans	$	6,078	$	—
Prepaid land lease	3,228		3,275
Deferred tax asset, net	1,616		2,503
Derivative financial instruments	1,509		—
	$	12,431	$	5,778

Accrued Expenses and Other

Accrued expenses and other at December 31, 2017 and 2016 included the following (in thousands):



	2017		2016
Accrued property, sales and income taxes	$	16,664	$	11,171
Accrued salaries and benefits	8,556		10,802
Other accrued expenses at hotels	15,509		12,356
Acquired unfavorable leases	4,717		4,812
Accrued interest	1,958		1,655
Derivative financial instruments	190		1,118
Other	8,894		6,084
	$	56,488	$	47,998