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INVESTMENTS IN LODGING PROPERTY, NET (Tables)
 12 Months Ended
Dec. 31, 2022
Real Estate [Abstract]  
Schedule of Investments in Lodging Property, net
We generally depreciate our lodging properties and related assets using the straight-line method over their estimated useful lives as follows:
 
Classification Estimated Useful Lives
Buildings and improvements 
6 to 40 years
Furniture, fixtures and equipment 
2 to 15 years
Investments in lodging property, net at December 31, 2022 and 2021 include (in thousands):

 
 20222021
Land$365,770 $323,276 
Lodging buildings and improvements2,764,355 2,127,782 
Intangible assets39,954 10,834 
Construction in progress62,471 18,321 
Furniture, fixtures and equipment250,575 167,245 
Real estate development loan (1)
— 27,595 
 3,483,125 2,675,053 
Less - accumulated depreciation and amortization(690,573)(583,080)
 $2,792,552 $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 Investments in Lodging Property, net in our Consolidated Balance Sheet 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 as described below.
Schedule of Finite-Lived Intangible Assets
Intangible assets included in Investments in Lodging Property, net in our Consolidated Balance Sheets include the following (in thousands):
Weighted Average Amortization Period (in Years)20222021
Indefinite-lived Intangible assets:
Air rightsN/A$10,754 $10,754 
OtherN/A80 80 
10,834 10,834 
Finite-lived intangible assets:
Tax incentives(1)
9.219,750 — 
Key money(1)
17.89,370 — 
29,120 — 
Total intangible assets39,954 10,834 
    Less - accumulated amortization(5,110)— 
Intangible assets, net$34,844 $10,834 

(1)    Finite-lived intangible assets were primarily acquired in the NCI Transaction.
Schedule of Indefinite-lived Intangible Assets
Intangible assets included in Investments in Lodging Property, net in our Consolidated Balance Sheets include the following (in thousands):
Weighted Average Amortization Period (in Years)20222021
Indefinite-lived Intangible assets:
Air rightsN/A$10,754 $10,754 
OtherN/A80 80 
10,834 10,834 
Finite-lived intangible assets:
Tax incentives(1)
9.219,750 — 
Key money(1)
17.89,370 — 
29,120 — 
Total intangible assets39,954 10,834 
    Less - accumulated amortization(5,110)— 
Intangible assets, net$34,844 $10,834 

(1)    Finite-lived intangible assets were primarily acquired in the NCI Transaction.
Schedule of Future Amortization Expenses
Future amortization expense related to intangible assets is as follows (in thousands):

For the Year Ended
December 31,		Amount
2023$4,331 
20244,296 
20251,625 
20261,625 
20271,625 
Thereafter10,508 
$24,010 
Schedule of Hotel Property Acquisitions
Lodging property acquisitions in 2022 and 2021 were as follows (in thousands):
Date AcquiredFranchise/BrandLocationGuestroomsPurchase 
Price
Year Ended December 31, 2022
January 13, 2022
Portfolio of properties - twenty-six hotel properties and two parking garages (1)
Various3,533 $766,000 
March 23, 2022
Canopy Hotel by Hilton (1)
New Orleans, LA176 56,000 
June 10, 2022
AC/Element Hotel (2)
Miami (Brickell), FL264 80,100 
October 26, 2022
Independent (3)
Fredericksburg, TX11 5,193 
3,984 $907,293 
Year Ended December 31, 2021   
July 9, 2021
Residence Inn by Marriott (4)
Steamboat Springs, CO110 $33,000 
December 21, 2021
Embassy Suites (4)
Tucson, AZ120 25,500 
 230 $58,500 
  

(1)       On January 13, 2022, we acquired a portfolio of twenty-six hotels and two parking garages for an aggregate purchase price of 766.0 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)    We acquired a 90% equity interest in the AC/Element Hotel for $80.1 million 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.

(3)       On October 26, 2022, we completed the acquisition of a 90% equity interest in Onera Joint Venture which owns a high-end glamping property for $5.2 million based on aggregate purchase price of $5.8 million. We paid for our 90% in cash, plus $0.5 million of transaction costs. Additionally, the transaction includes additional contingent consideration (based on performance of the property for the 12-month period ending July 31, 2023) that is limited to a maximum of $1.8 million, payable to the seller. The Onera Joint Venture has a 100% fee simple interest in real property and improvements consisting of 11 glamping lodging units and a 6.4-acre parcel of undeveloped land that will be developed as phase two of the lodging site in the future.

(4)       The net assets acquired in 2021 were purchased by our GIC Joint Venture for $58.5 million plus the purchase of $0.2 million of net working capital assets, capitalized transaction costs of $0.4 million, and restricted cash reserves of $5.1 million. Additionally, the Company assumed debt of $13.3 million and paid deferred financing costs totaling $0.2 million. We own a 51% controlling interest in these hotel properties through our GIC Joint Venture.

The allocation of the aggregate purchase prices to the fair value of assets and liabilities acquired for the above acquisitions is as follows (in thousands):
 
 20222021
Land$68,426 $3,673 
Lodging buildings and improvements756,551 52,226 
Intangible assets25,642 — 
Furniture, fixtures and equipment82,730 2,946 
Restricted cash reserves— 5,118 
Other assets5,318 405 
Total assets acquired938,667 64,368 
Debt assumed(382,205)(13,267)
Deferred financing costs— 236 
Lease liability assumed(5,441)— 
Key Money and other liabilities(5,892)(214)
Net assets acquired (1)
$545,129 $51,123 

(1)       Total assets acquired is based on an aggregate purchase price of $907.3 million plus the following items related to the NCI Transaction: interest swap breakage fees and debt defeasance costs related to the NCI Transaction of $3.5 million, a reduction to the value of the Common Units issued related to the NCI Transaction on the closing date of $2.5 million, plus transaction costs of $3.0 million, and intangible assets totaling $9.0 million acquired outside of escrow; the following items related to the Brickell Transaction: Brickell Joint Venture partner’s non-controlling interest of $6.9 million; Brickell Joint Venture partner’s non-controlling interest share of the debt assumed as part of the transaction of $4.7 million, the assumption of intangible assets totaling $2.0 million, the carrying amount of our Initial Purchase Option of $2.9 million, and transactions costs of $0.6 million; and the following items related to the Onera Transaction: Onera Joint Venture partner's non-controlling interest of $0.8 million and $0.5 million of transaction costs.

The net assets acquired in 2021 were purchased for $58.5 million plus the purchase of $0.2 million of net working capital assets, capitalized transaction costs of $0.4 million, and restricted cash reserves of $5.1 million. Additionally, the Company assumed debt of $13.3 million and paid deferred financing costs totaling $0.2 million.
Schedule of Assets Held for Sale
Assets held for sale, net at December 31, 2022 include a parcel of undeveloped land in Flagstaff, AZ and certain properties as described above that are under contract for sale and expected to close during the first half of 2023 as follows (in thousands):

Net Carrying Amount
Portfolio of four lodging properties$27,516 
Portfolio of two lodging properties49,410 
Parcel of undeveloped land - San Antonio, TX1,225 
Parcel of undeveloped land - Flagstaff, AZ425 
$78,576