Investment In Hotel Properties And Acquisition Of Hotel Properties

9 Months Ended

Sep. 30, 2016

Investment In Hotel Properties And Acquisition Of Hotel Properties [Abstract]

Investment In Hotel Properties And Acquisition Of Hotel Properties

NOTE 2.  INVESTMENT IN HOTEL PROPERTIES AND ACQUISITION OF HOTEL PROPERTIES

Investments in hotel properties consisted of the following at September 30, 2016 and December 31, 2015:

	As of
	September 30, 2016						December 31, 2015
	Held for sale		Held for use		Total		Held for sale		Held for use		Total
Land	$	2,797	$	12,787	$	15,584	$	6,078	$	12,789	$	18,867
Acquired below market lease intangibles		-		883		883		-		883		883
Buildings, improvements, vehicle		24,865		88,052		112,917		50,571		87,535		138,106
Furniture and equipment		6,833		14,931		21,764		14,656		15,932		30,588
Construction-in-progress		46		625		671		171		284		455
Investment in hotel properties		34,541		117,278		151,819		71,476		117,423		188,899
Less accumulated depreciation		(15,452)		(25,244)		(40,696)		(34,571)		(23,629)		(58,200)
Investment in hotel properties, net	$	19,089	$	92,034	$	111,123	$	36,905	$	93,794	$	130,699

The Company had no acquisitions of wholly owned properties during the three or nine months ended September 30, 2016 or 2015.  On August 1, 2016, the Company entered into the 80% owned Atlanta JV, which then acquired one hotel (see Note 3).

On August 29, 2016, the Company entered into a hotel purchase agreement to purchase an Aloft hotel in Leawood, Kansas, for $22,500.  As of September 30, 2016, $225 of restricted cash has been deposited into an escrow account as earnest money against the purchase price.  The closing of the acquisition is subject to customary closing conditions including accuracy of representations and warranties and compliance with covenants and obligations and is expected to occur in the fourth quarter of 2016.

Pro Forma Results

The Company acquired three hotel properties with a combined purchase price of $42,500 on October 1 and 2, 2015 and entered into the Atlanta JV which then acquired one hotel in August of 2016 (see Note 3).  The following condensed pro forma financial data is presented as if all acquisitions completed in 2015 had been completed on January 1, 2014 and as if the JV entered into in August 2016 had been entered into as of January 1, 2015.  Supplemental pro forma earnings were adjusted to exclude all acquisition expense recognized in the periods presented as if these acquisition costs had been incurred in prior periods, including acquisition expenses totaling $280 incurred by the Atlanta JV during the three months ended September 30, 2016.  Results for periods prior to the Company’s ownership are based on information provided by the prior owners, adjusted for differences in interest expense, depreciation expense, and management fees following the Company’s ownership.  The condensed pro forma financial data is not necessarily indicative of what actual results of operations of the Company would have been assuming the acquisitions had been consummated on January 1, 2014, nor do they purport to represent the results of operations for future periods.

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Total revenue	$	13,519	$	18,775	$	40,177	$	54,007
Operating income	$	1,302	$	2,520	$	2,937	$	5,586
Net earnings (loss)  attributable to common shareholders	$	2,342	$	10,766	$	(215)	$	7,481
Net earnings (loss) per share attributable to common shareholders - Basic	$	0.47	$	2.18	$	(0.04)	$	1.54
Net earnings (loss) per share attributable to common shareholders - Diluted	$	0.08	$	0.15	$	(0.04)	$	0.04