Property and equipment

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

The balance of property and equipment, net is as follows ($ in thousands):



	As of June 30,			As of December 31,
	2020			2019
Property and equipment, gross
Land, buildings and improvements	$	1,909,979		$	1,976,214
Fixtures and machinery	80,909			81,437
Furniture and other fixed assets	229,751			228,533
Construction in progress	14,850			42,083
Total property and equipment, gross	2,235,489			2,328,267
Accumulated depreciation	(430,247		)	(398,353		)
Total property and equipment, net	$	1,805,242		$	1,929,914

Depreciation expense for property and equipment was $46.7 million and $47.7 million for the six months ended June 30, 2020 and 2019, respectively, and $22.0 million and $25.6 million for the three months ended June 30, 2020 and 2019, respectively.

For the six months ended June 30, 2020 and 2019, $0 million and $5.0 million of interest expense was capitalized on qualifying assets, respectively. For the three months ended June 30, 2020 and 2019, $0 million and $2.9 million of interest expense was capitalized on qualifying assets, respectively. Interest expense was capitalized using the weighted-average interest rate of the debt.

Sale of assets

On May 22, 2020, we completed the sale of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were reported within our Jamaica reportable segment, for $60.0 million in cash consideration. Upon classification as held for sale, we recorded an impairment loss of $25.3 million based on the sale price of the properties, which is considered an observable input other than quoted prices (Level 2) in the U.S. GAAP fair value hierarchy. The impairment is recorded within impairment loss in the Condensed Consolidated Statements of Operations. Upon closing, we received total cash consideration of $58.7 million, after customary closing costs, and recognized a $1.8 million loss within loss on sale of assets in the Condensed Consolidated Statements of Operations.

Consistent with terms of our Existing Credit Agreement (as defined in Note 11), a portion of the net proceeds, after deducting incremental expenses and capital expenditures incurred across our portfolio for 18 months following the sale, will be used to prepay our Term Loan in the fourth quarter of 2021.

Lessor contracts

We rent certain real estate to third parties for office and retail space within our hotels. Our lessor contracts are considered operating leases and generally have a contractual term of one to three years. The following table presents our rental income for the three and six months ended June 30, 2020 and 2019 ($ in thousands):



Leases	Financial Statement Classification	Three Months Ended June 30, 2020		Three Months Ended June 30, 2019
Operating lease income ⁽¹⁾	Non-package revenue	$	—	$	1,245



Leases	Financial Statement Classification	Six Months Ended June 30, 2020		Six Months Ended June 30, 2019
Operating lease income ⁽¹⁾	Non-package revenue	$	1,146	$	2,716

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⁽¹⁾ Includes variable lease revenue, which is typically calculated as a percentage of our tenant's net sales.