Investments In Real Estate

6 Months Ended

Jun. 30, 2020

Real Estate Investments, Net [Abstract]

Investments In Real Estate

Investments in Real EstateDuring the six months ended June 30, 2020, 30 hotels were sold for gross proceeds of $129 million resulting in a gain on sale of $32 million. In addition, during the six months ended June 30, 2020, one hotel was disposed by returning the property to the ground lessor at the end of the lease term.          For the three and six months ended June 30, 2020 we recorded an impairment loss of $52 million and $54 million, respectively, primarily due to lower valuation of certain of our properties related to the ongoing and updated impact of the COVID-19 pandemic on the lodging industry. We will continue to monitor events and changes in circumstances related to our real estate assets, including updated COVID-19 pandemic data and effects, analysis related to our operations, fair value, our holding periods and cash flow assumptions, that may indicate that the carrying amounts of our real estate assets may not be recoverable. Such changes in

circumstances and analysis may result in impairment losses in future periods. We had no impairment loss for the three or six months ended June 30, 2019.

        We have experienced hurricane and fire related damages to certain of our hotels. We carry comprehensive property, casualty, flood and business interruption insurance that we anticipate will cover our losses at these hotels, subject to deductibles. For the three and six months ended June 30, 2020 we had no involuntary conversion write-off of net book value of damaged assets. Certain of our hotels had closures and disruptions to business primarily due to hurricanes and fires that occurred in previous years. We had no business interruption proceeds for the three months ended June 30, 2020. For the three months ended June 30, 2019, we recorded business interruption insurance proceeds of $6 million. For the six months ended June 30, 2020 and 2019, we recorded business interruption insurance proceeds of $2 million, and $7 million, respectively. These business interruption insurance proceeds are included in “other income (expense), net” on our condensed consolidated statements of operations.

As of June 30, 2020, we have not recognized any potential insurance claims related to COVID-19 pandemic losses. Given the contractual uncertainty of those claims, we cannot provide any assessment of whether such claims are realizable.

        Construction in progress primarily includes capitalized costs for ongoing projects that have not yet been put into service. We have pledged substantially all of our investments in real estate as collateral for our CMBS Facility (as defined below).