Property and Equipment

6 Months Ended

Jun. 30, 2017

Entity Information [Line Items]

Property and Equipment

PROPERTY AND EQUIPMENT

Net investment in property and equipment as of June 30, 2017 and December 31, 2016, consists of the following (in thousands):

	June 30, 2017			December 31, 2016
Hotel properties:
Land and site improvements	$	1,289,952		$	1,303,752
Building and improvements	2,909,502			2,940,615
Furniture, fixtures and equipment	632,155			612,855
Total hotel properties	4,831,609			4,857,222
Corporate furniture, fixtures, equipment, software and other	20,731			20,076
Undeveloped land parcel	1,675			1,675
Total cost	4,854,015			4,878,973
Less accumulated depreciation:
Hotel properties	(1,031,703		)	(962,400		)
Corporate furniture, fixtures, equipment, software and other	(12,765		)	(11,269		)
Total accumulated depreciation	(1,044,468		)	(973,669		)
Property and equipment - net	$	3,809,547		$	3,905,304

During the three and six months ended June 30, 2017 and 2016, the Company, using Level 3 unobservable inputs, assessed property and equipment for potential impairment. The Company recognized impairment charges of approximately $7.9 million and $20.4 million for the three and six months ended June 30, 2017, respectively, and recognized no impairment charges for the three or six months ended June 30, 2016. The impairment charge recorded during the three months ended March 31, 2017, approximately $12.4 million, related to the Canadian hotels that were sold.

Quantitative information with respect to unobservable inputs consists of internally developed cash flow models that include the following assumptions, among others: projections of revenues, expenses and hotel related cash flows based on assumed long-term growth rates, demand trends, expected future capital expenditures and estimated discount rates that range from 6% to 10% and terminal capitalization rates that range from 7% to 11%. These assumptions are based on the Company’s historical data and experience, the Company’s budgets, industry projections and micro and macro general economic condition projections.

ESH REIT

Entity Information [Line Items]

Property and Equipment

PROPERTY AND EQUIPMENT

Net investment in property and equipment as of June 30, 2017 and December 31, 2016, consists of the following (in thousands):

	June 30, 2017			December 31, 2016
Hotel properties:
Land and site improvements	$	1,290,834		$	1,304,503
Building and improvements	2,946,335			2,960,158
Furniture, fixtures and equipment	631,937			607,682
Total hotel properties	4,869,106			4,872,343
Undeveloped land parcel	1,675			1,675
Total cost	4,870,781			4,874,018
Less accumulated depreciation	(1,043,512		)	(959,449		)
Property and equipment - net	$	3,827,269		$	3,914,569

During the three and six months ended June 30, 2017 and 2016, ESH REIT, using Level 3 unobservable inputs, assessed property and equipment for potential impairment. No impairment charges were recognized during the three months ended June 30, 2017. ESH REIT recognized impairment charges of approximately $15.0 million for the six months ended June 30, 2017 related to the Canadian hotels that were sold. ESH REIT recognized no impairment charges during the three or six months ended June 30, 2016.

Quantitative information with respect to unobservable inputs consists of internally developed cash flow models that include the following assumptions, among others: projections of lease revenues and expenses, demand trends, expected future capital expenditures and estimated discount rates. These assumptions are based on ESH REIT’s historical data and experience, budgets, industry projections and micro and macro general economic condition projections.