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INVESTMENT IN HOTEL PROPERTIES, NET (Tables)
 9 Months Ended
Sep. 30, 2022
Real Estate [Abstract]  
Schedule of Investment in Hotel Properties, Net
Investment in hotel properties, net is as follows (in thousands):

September 30, 2022December 31, 2021
Hotel buildings and improvements$2,849,985 $2,127,782 
Land378,105 323,276 
Furniture, fixtures and equipment259,731 167,245 
Construction in progress44,263 18,321 
Intangible assets39,954 10,834 
Real estate development loan (1)
— 27,595 
3,572,038 2,675,053 
Less accumulated depreciation(689,895)(583,080)
$2,882,143 $2,091,973 

(1) During the year ended December 31, 2019, we executed a mezzanine loan to provide financing of $29.9 million for a mixed-use development project that includes the AC/Element Hotel with 264 guestrooms, retail space, and parking. In connection with the mezzanine loan, we had an option to purchase a 90% equity interest in the AC/Element Hotel (the "Initial Purchase Option") upon completion of construction, which occurred in December 2021. The mezzanine loan was classified as Investment in hotel properties, net in our Condensed Consolidated Balance Sheets at December 31, 2021. See "Note 4 - Investment in Real Estate Loans" for further information. In June 2022, the balance of the mezzanine loan was extinguished with the exercise of the Initial Purchase Option to acquire the AC/Element Hotel as part of the Brickell Transaction described below.
Schedule of Hotel Properties Acquired and Allocation of Aggregate Purchase Price
A summary of the hotel properties acquired during the nine months ended September 30, 2022 is as follows (in thousands):

Date AcquiredFranchise/BrandLocationGuestroomsPurchase
Price
January 13, 2022
Portfolio of properties - twenty-six hotel properties and two parking garages (1)
Various3,533$767,056 
March 23, 2022
Canopy Hotels by Hilton (1)
New Orleans, LA17656,000 
June 10, 2022
AC/Element Hotel (2)
Miami (Brickell), FL26494,522 
3,973 $917,578

(1)    On January 13, 2022, we acquired a portfolio of twenty-six hotels and two parking garages for an aggregate purchase price of $767.1 million. The hotels acquired included 21 hotels and two parking garages in Texas, two hotels in Louisiana and three hotels in Oklahoma under the following brands: Marriott (13), Hilton (7), Hyatt (4), and IHG (2). On March 23, 2022, we acquired the Canopy New Orleans upon completion of its construction for a purchase price of $56.0 million.

(2)    The purchase price of the AC/Element Hotel was based on the exercise price of the Initial Purchase Option of $89.0 million. The transaction included the
assumption of $47.0 million of debt resulting in a net consideration payment requirement of $42.0 million. We paid 90% of the required net consideration
with the conversion of our $29.9 million mezzanine loan into equity and a cash payment of $7.9 million. The carrying amount of our Initial Purchase
Option of $2.8 million is also included in the total amount allocated to the assets acquired. The Brickell Joint Venture partner’s non-controlling interest
of $6.9 million represents 10% of the fair value of the net assets on the transaction date, determined by a third-party valuation expert based on discounted
forecasted future cash flows of the net assets acquired. We also incurred $0.6 million of transaction costs. The result is a total amount allocated to the
assets acquired of $95.1 million plus an intangible asset totaling $2.0 million related to the assumption of the franchises for the hotel properties and a
related key money liability.

The allocation of the aggregate purchase prices to the relative fair values of the assets and liabilities acquired for the above asset acquisitions is as follows (in thousands):

Land$67,175 
Hotel buildings and improvements751,720 
Incentives and other intangibles25,642 
Furniture, fixtures and equipment82,353 
Other assets5,318 
Total assets acquired (1)
932,208 
Less debt assumed(382,205)
Less lease liabilities assumed(5,100)
Less other liabilities(6,233)
Net assets acquired$538,670 

(1)    The total consideration paid for the acquisitions of $925.8 million includes capitalized transaction costs $3.6 million and deferred financing costs of $4.6 million. Total assets acquired is based on the purchase price of $917.6 million, transaction costs of $3.6 million and intangible assets totaling $11.0 million acquired outside of escrow.
Schedule of Indefinite-Lived Intangible Assets
Intangible assets, net is as follows (in thousands):
September 30, 2022December 31, 2021
Indefinite-lived Intangible assets:
Air rights$10,754 $10,754 
Other80 80 
10,834 10,834 
Finite-lived intangible assets:
Tax incentives19,750 — 
Key money9,370 — 
29,120 — 
Intangible assets39,954 10,834 
Less accumulated amortization(4,104)— 
Intangible assets, net$35,850 $10,834 
Schedule of Finite-Lived Intangible Assets
Intangible assets, net is as follows (in thousands):
September 30, 2022December 31, 2021
Indefinite-lived Intangible assets:
Air rights$10,754 $10,754 
Other80 80 
10,834 10,834 
Finite-lived intangible assets:
Tax incentives19,750 — 
Key money9,370 — 
29,120 — 
Intangible assets39,954 10,834 
Less accumulated amortization(4,104)— 
Intangible assets, net$35,850 $10,834 
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense
Future amortization expense related to intangible assets is as follows (in thousands):

2022$1,083 
20234,331 
20244,296 
20251,625 
20261,625 
Thereafter12,056 
$25,016