3. INVESTMENT IN HOTEL PROPERTIES

Investment in hotel properties as of March 31, 2020 and December 31, 2019 consisted of the following:


	March 31,		December 31,
	2020		2019
Land and land improvements	$	10,314,661	$	7,738,495
Building and building improvements		84,575,847		53,238,276
Furniture, fixtures, and equipment		8,708,360		5,687,249
Construction in progress		451,091		—
Investment in hotel properties, at cost		104,049,959		66,664,020
Less: accumulated depreciation		(2,074,113)		(1,255,712)
Investment in hotel properties, net	$	101,975,846	$	65,408,308

As of March 31, 2020, the Company owned seven hotel properties with an aggregate of 706 rooms located in six states.

Acquisitions of Hotel Properties

The Company acquired two properties during the three months ended March 31, 2020 and four properties during the year ended December 31, 2019. Each of the Company’s hotel acquisitions to date have been determined to be asset acquisitions. The table below outlines the details of the properties acquired during the three months ended March 31, 2020.


2020 Acquisitions

				Number
			Date	of Guest	Purchase		Transaction				%
Hotel	Property Type	Location	Acquired	Rooms	Price		Costs		Total		Interest
Fairfield Inn & Suites (the "Lubbock Fairfield Inn Property")	Limited Service	Lubbock, TX	January 8, 2020	101	$	15,150,000	$	496,431	$	15,646,431	100	%
Homewood Suites (the "Southaven Property")	Extended Stay	Southaven, MS	February 21, 2020	99		20,500,000		445,090		20,945,090	100	%
				200	$	35,650,000	$	941,521	$	36,591,521

The table below outlines the details of the properties acquired during the year ended December 31, 2019.


2019 Acquisitions

				Number
			Date	of Guest	Purchase		Transaction				%
Hotel	Property Type	Location	Acquired	Rooms	Price		Costs		Total		Interest
Hampton Inn & Suites (the "Pineville Property")	Limited Service	Pineville, NC	March 19, 2019	111	$	13,897,358	$	303,744	$	14,201,102	100	%
Hampton Inn (the "Eagan Property")	Limited Service	Eagan, MN	June 19, 2019	122		13,950,000		278,333		14,228,333	100	%
Home2 Suites (the "Prattville Property")	Extended Stay	Prattville, AL	July 11, 2019	90		14,750,000		356,014		15,106,014	100	%
Home2 Suites (the “Lubbock Home2 Property”)	Extended Stay	Lubbock, TX	December 30, 2019	100		14,150,000		284,776		14,434,776	100	%
				423	$	56,747,358	$	1,222,867	$	57,970,225

Each of the hotel properties listed above, except one, is subject to a property management agreement with NHS, LLC dba National Hospitality Services (“NHS”) with an initial term expiring on December 31st of the fifth full calendar year following the effective date of the agreement, which will automatically renew for successive 5‑year periods unless terminated earlier in accordance with its terms. The Pineville Property is currently being managed on a day-to-day basis by Beacon IMG, Inc. (“Beacon”), an affiliate of the seller of the Pineville Property, pursuant to a sub-management agreement. The Southaven Property is currently being managed on a day-to-day basis by Vista Host, Inc. pursuant to a property management agreement with an initial term expiring on February 21, 2025, which will automatically renew for two successive 5-year periods unless terminated earlier in accordance with its terms.

The seller of the Pineville Property, an affiliate of Beacon, may be entitled to additional cash consideration if the property exceeds certain performance criteria based on increases in the property’s net operating income (“NOI”) for a selected 12‑month period of time. At any time during the period beginning April 1, 2021 through the date of the final NOI determination (on or about April 30, 2023), the seller of the property may make a one-time election to receive the additional consideration. The variable amount of the additional consideration, if any, is based on the excess of the property’s actual NOI over a base NOI for the applicable 12‑month calculation period divided by the stated cap rate for such calculation period. Further, if the Company sells the Pineville Property or terminates the Beacon sub-management agreement without cause prior to March 31, 2021, the Company will be required to pay liquidated damages of at least $1.0 million unless the seller elects to receive the additional consideration described above. As of March 31, 2020, no amounts were paid to the seller of the Pineville Property, and no election to receive the additional consideration had been made.

The aggregate purchase price for the hotel properties acquired during the three months ended March 31, 2020 and the year ended December 31, 2019 were allocated as follows:


	March 31,		December 31,
	2020		2019
Land and land improvements	$	2,576,166	$	6,201,529
Building and building improvements		31,605,174		47,412,115
Furniture, fixtures, and equipment		3,007,846		4,772,707
Total assets acquired		37,189,186		58,386,351

Premium on assumed debt		(597,665)		(416,126)
Total liabilities assumed		(597,665)		(416,126)
Total purchase price(1)		36,591,521		57,970,225

Assumed mortgage debt		9,400,772		17,283,415

Net purchase price	$	27,190,749	$	40,686,810

(1)

Total purchase price includes purchase price plus all transaction costs.