Investment in Unconsolidated Joint Ventures

12 Months Ended

Dec. 31, 2020

Investment in Unconsolidated Joint Ventures [Abstract]

Investment in Unconsolidated Joint Ventures

As of December 31, 2020 and 2019, the Company owned 50% interests in joint ventures that owned two hotel properties. During the year ended December 31, 2020, one of the unconsolidated joint ventures did not exercise its right to extend the term of the ground lease. Accordingly the ground lease will terminate on October 31, 2021 and the property will revert to the ground lessor at that time. As a result, the Company recorded an impairment loss of $6.5 million to write down the Company's investment in this joint venture, which is included in equity in (loss) income of unconsolidated entities in the accompanying consolidated statements of operations.

During the year ended December 31, 2019, the Company sold two hotels located in Myrtle Beach, South Carolina. In addition, the joint ventures that were associated with these two hotels sold their assets. The Company had owned 50% interests in these joint ventures. The Company recorded a loss of $2.1 million as a result of the joint ventures' sale of their assets, which is included in equity in (loss) income of unconsolidated entities in the accompanying consolidated statements of operations. Refer to Note 5, Sale of Hotel Properties, for more information regarding the sale of the hotels.

The Company accounts for the investments in these unconsolidated joint ventures under the equity method of accounting. The Company makes adjustments to the equity in (loss) income from unconsolidated joint ventures related to the difference between the Company's basis in the investment in the unconsolidated joint ventures as compared to the historical basis of the assets and liabilities of the joint ventures. As of December 31, 2020 and 2019, the unconsolidated joint ventures' debt consisted entirely of non-recourse mortgage debt.

The following table summarizes the components of the Company's investments in unconsolidated joint ventures (in thousands):


	December 31, 2020		December 31, 2019
Equity basis of the joint venture investments	$	(6,687)	$	(4,236)
Cost of the joint venture investments in excess of the joint venture book value	13,485		19,407
Investment in unconsolidated joint ventures	$	6,798	$	15,171

The following table summarizes the components of the Company's equity in income from unconsolidated joint ventures (in thousands):


	For the year ended December 31,
	2020		2019		2018
Operating (loss) income	$	(913)	$	1,667	$	2,105
Depreciation of cost in excess of book value	(995)		(1,265)		(1,469)
Impairment loss	(6,546)		—		—
Loss on sale	—		(2,075)		—
Equity in (loss) income from unconsolidated joint ventures	$	(8,454)	$	(1,673)	$	636