Investments in Hotel Properties, net

12 Months Ended

Dec. 31, 2022

Property, Plant and Equipment [Abstract]

Investments in hotel properties, net consisted of the following (in thousands):


	December 31, 2022		December 31, 2021
Land	$	622,759	$	626,917
Buildings and improvements	3,650,464		3,711,006
Furniture, fixtures and equipment	222,665		298,121
Construction in progress	21,609		16,370
Condominium properties	9,889		10,739
Hilton Marietta finance lease	18,998		—
Total cost	4,546,384		4,663,153
Accumulated depreciation	(1,428,053)		(1,432,443)
Investments in hotel properties, net	$	3,118,331	$	3,230,710

For the years ended December 31, 2022, 2021 and 2020, we recognized depreciation expense of $201.4 million, $218.5 million and $252.4 million, respectively.

Acquisition

On December 16, 2022, in exchange for satisfying the full outstanding ERFP balance, which is discussed in note 17, Ashford Inc. transferred to the Company 100% ownership of Marietta Leasehold LP and Marietta Leasehold GP, which holds a lease for the Hilton Atlanta/Marietta Hotel and Conference Center (the “Hilton Marietta”). The finance lease asset had an estimated value of approximately $18.8 million and is included in “investments in hotel properties, net” and a corresponding finance lease liability was recorded in “finance lease liabilities”. The lease expires on December 31, 2054 and was classified as a finance lease. See note 19.

We accounted for this transaction as an asset acquisition because substantially all of the fair value of the gross assets acquired was concentrated in a group of similar identifiable assets. We allocated the cost of the acquisition including transaction costs of $151,000 to the finance lease asset, increasing the finance lease asset value to approximately $19.0 million.

The following table summarizes the assets and liabilities included in Marietta Leasehold LP (in thousands):


Finance lease asset	$	18,998
Cash and cash equivalents	1,282
Restricted cash	800
Inventories	48
Prepaid expenses	221
Other assets	1
Finance lease liability	(18,847)
Due to related parties, net	(10)
Accounts payable and accrued expenses	(2,321)

The results of operations of the hotel property have been included in our results of operations from the acquisition date. The table below summarizes the total revenue and net income (loss) in our condensed consolidated statements of operations for the year ended December 31, 2022:


	Year ended December 31, 2022
Total revenue	$	338
Net income (loss)	$	30