Real Estate Properties

As of December 31, 2016, we owned 306 hotels and 198 travel centers.

Our real estate properties, at cost after impairments, consisted of land of $1,563,263, buildings and improvements of $6,538,169 and furniture, fixtures and equipment of $614,289, as of December 31, 2016; and land of $1,525,637, buildings and improvements of $6,151,690 and furniture, fixtures and equipment of $584,445, as of December 31, 2015.

During 2016, 2015 and 2014, we funded $191,401, $188,002 and $230,531, respectively, of improvements to certain of our properties which pursuant to the terms of our management agreements and leases with our managers and tenants resulted in increases in our contractual annual minimum returns and rents of $14,740, $14,691 and $17,670 in 2016, 2015 and 2014, respectively.

At December 31, 2016, 14 of our hotels were on land we leased partially or entirely from unrelated third parties. The average remaining term of the ground leases (including renewal options) is approximately37 years (range of 22 to 70 years). Ground rent payable under nine of the ground leases is generally calculated as a percentage of hotel revenues. Twelve of the 14 ground leases require annual minimum rents averaging $248 per year; future rents under two ground leases have been pre-paid. Sixteen (16) of our travel centers are on land we leased partially or entirely from unrelated third parties. The remaining terms on the leases range from 2 to 34 years with rents averaging $481 per year. Generally, payments of ground lease obligations are made by our managers or tenants. However, if a manager or tenant did not perform obligations under a ground lease or did not renew any ground lease, we might have to perform obligations under the ground lease or renew the ground lease in order to protect our investment in the affected property. Any pledge, sale or transfer of our interests in a ground lease may require the consent of the applicable ground lessor and its lenders.

Acquisitions

During the year ended December 31, 2016, we acquired four hotels, five travel centers and a land parcel adjacent to a travel center that we own.



					Purchase Price Allocation
Acquisition Date	Location	Type	Purchase Price ⁽¹⁾		Land		Land Improvements		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets
2/1/2016	Various ^{(2) (3)}	Hotels	$	12,000	$	1,953	$	654	$	8,153	$	1,240	$	—
3/16/2016	Portland, OR ^{(2) (4)}	Hotel	114,000		5,657		3		100,535		7,805		—
3/31/2016	Hillsboro, TX ⁽⁵⁾	Travel Center	19,683		4,834		4,196		10,653		—		—
6/22/2016	Various ⁽⁵⁾	Travel Centers	23,876		3,170		9,280		11,426		—		—
6/30/2016	Wilmington, IL ⁽⁵⁾	Travel Center	22,297		6,523		3,364		12,410		—		—
9/14/2016	Holbrook, AZ ⁽⁶⁾	Land	325		325		—		—		—		—
9/30/2016	Caryville, TN ⁽⁵⁾	Travel Center	16,557		2,068		6,082		8,407		—		—
12/5/2016	Milpitas, CA ⁽²⁾⁽⁷⁾	Hotel	46,000		$	13,089	$	823	$	29,748	$	2,340	—
			$	254,738	$	37,619	$	24,402	$	181,332	$	11,385	$	—

During the year ended December 31, 2015, we acquired 11 hotels, a land parcel adjacent to one of our hotels, 14 travel centers and certain assets at 11 travel centers we lease to TA, and land and certain improvements at a travel center we leased from a third party and subleased to TA.



Acquisition Date	Location	Type	Purchase Price ⁽¹⁾		Land		Land Improvements		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets
3/16/2015	Rosemont, IL ⁽²⁾⁽⁸⁾	Hotel	$	35,500	$	2,375	$	219	$	31,182	$	1,463	$	261
4/28/2015	Ft. Lauderdale, FL ⁽⁹⁾	Land	750		165		—		585		—		—
5/15/2015	Denver, CO ^(2)(10)	Hotel	77,250		8,193		181		61,005		7,871		—
6/1/2015	Various ⁽⁵⁾	Travel Centers	227,877		26,286		67,161		134,388		42		—
7/23/2015	Various ^(2)(11)	Hotels	85,000		13,165		—		64,338		7,497		—
9/23/2015	Various ⁽⁵⁾	Travel Centers	51,506		9,165		21,266		21,075		—		—
10/30/2015	Waterloo, NY ⁽¹²⁾	Land	15,000		1,500		4,500		9,000		—		—
			$	492,883	$	60,849	$	93,327	$	321,573	$	16,873	$	261

During the year ended December 31, 2014, we acquired one hotel.



Acquisition Date	Location	Type	Purchase Price ⁽¹⁾		Land		Land Improvements		Building and Improvements		Furniture, Fixtures and Equipment		Intangible Assets
5/30/2014	Ft. Lauderdale, FL ^(2)(13)	Hotel	$	65,000	$	14,592	$	—	$	40,525	$	9,883	$	—
			$	65,000	$	14,592	$	—	$	40,525	$	9,883	$	—


(1)	Excludes acquisition related costs.


(2)	We accounted for these transactions as business combinations. The pro forma impact of including the results of operations of these acquisitions from the beginning of the year is not material to our consolidated financial statements.


(3)	On February 1, 2016, we acquired two extended stay hotels with 262 suites located in Cleveland and Westlake, OH for an aggregate purchase price of $12,000. We converted these hotels to the Sonesta ES Suites^® brand and entered management agreements for these hotels with Sonesta. See Notes 6 and 10 for further information regarding our Sonesta agreement.


(4)	On March 16, 2016, we acquired the Kimpton Hotel Monaco, a full service hotel with 221 rooms located in Portland, OR for a purchase price of $114,000. We added this hotel to our management agreement with InterContinental. See Note 6 for further information regarding our InterContinental agreement.

(5)

On June 1, 2015, we entered into a transaction agreement with TA pursuant to which, among other things, we agreed to acquire from, and lease back to, TA 14 travel centers owned by TA and certain assets owned by TA at 11 properties we own and lease to TA for $279,383, in aggregate, excluding acquisition related costs. Pursuant to this transaction agreement, during June 2015, we acquired 12 of these travel centers from TA and assets owned by TA at 10 properties we own and lease to TA for $227,887, in aggregate, excluding acquisition related costs; and on September 23, 2015, we acquired from TA the remaining two of these travel centers and assets owned by TA at one property we own and lease to TA for $51,506, in aggregate, excluding acquisition related costs. Simultaneously with these acquisitions, we leased these travel centers and assets back to TA under leases that we and TA entered into pursuant to the transaction agreement, which replaced our previously existing leases with TA.

Also pursuant to the transaction agreement, we agreed to acquire from, and lease back to, TA five travel centers owned by TA and under development for purchase prices equal to TA’s development costs, which were estimated to be not more than $118,000, in aggregate. On March 31, 2016, we acquired one of these development properties from TA for $19,683. On June 22, 2016, we and TA amended the transaction agreement to, among other things, replace one development property with two alternative travel centers owned by TA. Pursuant to the amended transaction agreement: on June 22, 2016, we acquired the two alternative travel centers from TA for $23,876, in aggregate; on June 30, 2016, we acquired from TA one of the development properties for $22,297; and on September 30, 2016, we acquired from TA another of the development properties for $16,557. Simultaneously with these acquisitions, we leased these travel centers and development properties back to TA under our TA leases. We currently expect to acquire the remaining development property from TA before June 30, 2017 at a purchase price equal to its development cost not to exceed $29,000, and to lease it back to TA under one of our TA leases. We accounted for all of our TA transactions as asset acquisitions.


(6)	On September 14, 2016, we acquired land adjacent to a travel center that we own in Holbrook, AZ for $325. We added this property to our TA No. 4 lease. See Notes 6 and 10 for further information regarding this transaction and our TA leases. We capitalized acquisition related costs of $7 related to this transaction.

(7)

On December 5, 2016, we acquired a full service hotel with 236 rooms located in Milpitas, CA for a purchase price of $46,000. We converted this hotel to the Sonesta^® brand and entered a management agreement for this hotel with Sonesta. See Notes 6 and 10 for further information regarding our Sonesta agreement. The allocation of purchase price is based on preliminary estimates and may change upon completion of third party appraisals.


(8)	On March 16, 2015, we acquired a 300 room hotel located in Rosemont, IL for a purchase price of $35,500. We added this Holiday Inn and Suites^® branded hotel to our management agreement with InterContinental. See Note 6 for further information regarding our InterContinental agreement.


(9)	On April 28, 2015, we acquired land and improvements adjacent to the Sonesta hotel in Fort Lauderdale, FL, referenced in footnote 13 to this table, for $750. This land and improvements are included with the Fort Lauderdale hotel under our Sonesta agreement. We capitalized acquisition related costs of $41 related to this transaction.


(10)	On May 15, 2015, we acquired a 364 room full service hotel located in Denver, CO for a purchase price of $77,250. We added this Crowne Plaza^® branded hotel to our management agreement with InterContinental. See Note 6 for further information regarding our InterContinental agreement.


(11)	On July 23, 2015, we acquired a portfolio of nine extended stay hotels with 1,095 suites located in eight states for an aggregate purchase price of $85,000. We converted these hotels to Sonesta ES Suites^® branded hotels and added them to our management agreement with Sonesta. See Notes 6 and 10 for further information regarding this transaction and our Sonesta agreement.


(12)	On October 30, 2015, we acquired the land and certain improvements at a travel center located in Waterloo, NY that we leased from a third party and subleased to TA for an aggregate purchase price of $15,000. These assets were added to one of our leases with TA and TA is now directly leasing these assets from us with rent for these assets now directly paid to us.


(13)	On May 30, 2014, we acquired a 240 room full service hotel located in Fort Lauderdale, FL for a price of $65,000. We converted this hotel to a Sonesta^® branded hotel and added it to our Sonesta agreement. See Notes 6 and 10 for further information regarding this transaction and our Sonesta agreement.

In November 2016, we agreed to acquire a full service hotel with 121 rooms located in Seattle, WA for a purchase price of $71,625, excluding acquisition related costs. We expect to add this hotel to our management agreement with InterContinental. See Note 6 for further information regarding our InterContinental agreement.

In December 2016, we entered into an agreement to acquire land adjacent to our Crowne Plaza hotel in Atlanta, GA for a purchase price of $900, excluding acquisition related costs.

Also in December 2016, we terminated a previously announced agreement to acquire a full service hotel with 101 rooms located in Addison, TX for a purchase price of $9,000, excluding acquisition costs.

On February 1, 2017, we acquired a full service hotel with 483 rooms located in Chicago, IL for a purchase price of $85,494, excluding acquisition related costs. We added this Kimpton^® branded hotel to our management agreement with InterContinental. See Note 6 for further information regarding our InterContinental agreement.

See Notes 6 and 10 for further information regarding our relationship, agreements and transactions with Sonesta and TA.

Dispositions

At December 31, 2016, our TA branded travel center in Nashville, TN with a carrying value of $6,128 was held for sale. This amount is included in other assets, net in our consolidated balance sheets. See Note 6 for further information relating to our travel center held for sale.

On June 9, 2015, pursuant to our June 2015 transaction agreement with TA, we sold to TA five TA branded travel centers that we owned and leased to TA for $45,042. As a result of this sale, we recorded an $11,015 gain on sale of real estate in 2015.

On April 29, 2014, we sold our Sonesta ES Suites located in Myrtle Beach, SC for net proceeds of $4,288. As a result of this sale, our management agreement with Sonesta for this hotel was terminated and the hotel was removed from our Sonesta agreement.

On August 13, 2013, a travel center located in Roanoke, VA that we leased to TA was taken by eminent domain proceedings brought by the Virginia Department of Transportation, or VDOT, in connection with certain highway construction. In January 2014, we received proceeds from the VDOT of $6,178, which is a substantial portion of the VDOT’s estimate of the value of the property, and as a result the annual minimum rent payable by TA to us under the then applicable lease decreased by $525, effective January 6, 2014. In November 2014, this property was surrendered to the VDOT. We and TA are challenging the VDOT’s estimate of this property’s value and we expect that the final resolution of this matter will take considerable time.