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Dispositions, Impairment Charges and Assets Held For Sale
 12 Months Ended
Dec. 31, 2024
Dec. 31, 2022
Discontinued Operations and Disposal Groups [Abstract]    
Dispositions, Impairment Charges and Assets Held For Sale Dispositions, Impairment Charges and Assets Held For Sale
Dispositions
On March 1, 2024, the Company received notice that the hotel properties securing the KEYS Pool A and KEYS Pool B loans have been transferred to a court-appointed receiver.
We derecognized the hotel properties securing the KEYS Pool A and KEYS Pool B loans from our consolidated balance sheet as of March 1, 2024, when the receiver took control of the hotels, and accordingly recognized a gain of $133.9 million which is included in “gain (loss) on derecognition of assets” in our consolidated statements of operations. Subsequent to March 31, 2024, we recognized an additional gain of $33.3 million, which is included in “gain (loss) on derecognition of assets” in our consolidated statement of operations that increased the contract asset by a corresponding amount. The additional gain primarily represents the additional accrued interest expense recorded through December 31, 2024. In total for the year ended December 31, 2024 we recognized a gain of $167.2 million. The KEYS Pool A and the KEYS Pool B mortgage loans as well as all accrued and unpaid interest, default charges and late fees will remain liabilities until final resolution with the lenders is concluded, and thus are included in “indebtedness associated with hotels in receivership” and “accrued interest associated with hotels in receivership” on our consolidated balance sheets.
On July 2, 2024, the Courtyard Plano Legacy Park and the Residence Inn Plano were foreclosed upon and sold at a public auction. Additionally, on November 4, 2024, the receiver appointed for the KEYS Pool A and KEYS Pool B mortgage loans transferred the Courtyard Columbus Tipton Lakes to a third party purchaser. As a result, the contract asset and corresponding indebtedness associated with hotels in receivership and accrued interest associated with hotels in receivership were reduced by $45.0 million for the amounts attributable to each hotel.
On March 6, 2024, the Company sold the Residence Inn Salt Lake City in Salt Lake City, Utah for $19.2 million in cash. The sale resulted in a gain of approximately $6.9 million for the year ended December 31, 2024, which was included in “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the consolidated statements of operations. See note 7.
On April 9, 2024, the Company sold the Hilton Boston Back Bay in Boston, Massachusetts for $171 million in cash. The sale resulted in a gain of approximately $129,000 for the year ended December 31, 2024, which was included in “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the consolidated statements of operations. See note 7.
On April 23, 2024, the Company sold the Hampton Inn Lawrenceville in Lawrenceville, Georgia for $8.1 million in cash. The sale resulted in a gain of approximately $4.8 million for the year ended December 31, 2024, which was included in “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the consolidated statements of operations. See note 7.
On May 30, 2024, the Company sold the Courtyard Manchester in Manchester, Connecticut for $8.0 million in cash. The sale resulted in a gain of approximately $2.1 million for the year ended December 31, 2024, which was included in “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the consolidated statements of operations. See note 7.
On June 10, 2024, the Company sold the SpringHill Suites Kennesaw and Fairfield Inn Kennesaw in Kennesaw, Georgia for $17.5 million in cash. The sales resulted in a gain of approximately $9.6 million for the year ended December 31, 2024, which was included in “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the consolidated statements of operations. See note 7.
On June 27, 2024, the Company sold the One Ocean Resort and Spa in Atlantic Beach, Florida for $87.0 million in cash. The sale resulted in a gain of approximately $70.9 million for the year ended December 31, 2024, which was included in “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the consolidated statements of operations. See note 7.
In June 2024, the Company was informed by its lender that the lender intended to exercise remedies for the maturity default on the Ashton hotel in Fort Worth, Texas, which secured the Company’s $8.9 million mortgage loan. The Company and the lender agreed to a deed-in-lieu of foreclosure, which was completed on July 16, 2024 and resulted in a gain on extinguishment of debt of approximately $2.6 million for the year ended December 31, 2024, which was included in “gain (loss) on extinguishment of debt” in the consolidated statement of operations.
On August 1, 2023, the Company sold the WorldQuest Resort in Orlando, Florida (“WorldQuest”) for $14.8 million in cash. The sale resulted in a gain of approximately $6.4 million for the year ended December 31, 2023, which was included in “gain (loss) on consolidation of VIE and disposition of assets” in the consolidated statements of operations.
On November 9, 2023, the Company sold the Sheraton Bucks County in Langhorne, Pennsylvania for $13.8 million in cash. The sale resulted in a gain of approximately $3.9 million for the year ended December 31, 2023, which was included in “gain (loss) on consolidation of VIE and disposition of assets” in the consolidated statements of operations.
On June 9, 2023 the Company received a 30 day extension to satisfy the extension conditions in order to negotiate modifications to the KEYS pool F extension test. On July 7, 2023, the Company elected not to make the required paydown to extend its KEYS pool F loan thereby defaulting on such loan. The KEYS pool F loan had a $215.1 million debt balance and was secured by Embassy Suites Flagstaff, Embassy Suites Walnut Creek, Marriott Bridgewater, Marriott Research Triangle, and the W Atlanta Downtown.
On November 29, 2023, the Company completed the deed in lieu of foreclosure transaction for the transfer of ownership of the KEYS F loan to the mortgage lender, which resulted in a gain on extinguishment of debt of approximately $53.4 million for the year ended December 31, 2023, which is included in “gain (loss) on extinguishment of debt” in the consolidated statements of operations. See note 7.
The results of operations for these hotel properties are included in net income (loss) through the date of disposition for the years ended December 31, 2024, 2023 and 2022. The following table includes condensed financial information from these hotel property dispositions that occurred for the years ended December 31, 2024, 2023 and 2022 (in thousands):
Year Ended December 31,
202420232022
Total hotel revenue
$41,158 $256,951 $247,474 
Total hotel operating expenses(31,187)(176,422)(169,716)
Property taxes, insurance and other(2,901)(14,641)(14,811)
Depreciation and amortization(3,937)(35,202)(39,988)
Total operating expenses(38,025)(226,265)(224,515)
Gain (loss) on consolidation of VIE and disposition of assets and hotel properties94,406 10,279 (1)
Gain (loss) on derecognition of assets
167,178 — — 
Operating income (loss)264,717 40,965 22,958 
Interest income43 227 52 
Interest expense and amortization of discounts and loan costs(5,993)(36,885)(25,460)
Interest expense associated with hotels in receivership
(45,592)(39,178)(19,079)
Write-off of premiums, loan costs and exit fees(838)(592)(272)
Gain (loss) on extinguishment of debt2,774 53,386 — 
Income (loss) before income taxes215,111 17,923 (21,801)
(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership(2,528)(206)173 
Net income (loss) attributable to the Company$212,583 $17,717 $(21,628)
Impairment Charges
For the year ended December 31, 2024, we recorded impairment charges of $59.3 million. We recorded impairment charges of $35.9 million at the Costa Mesa Hilton and $23.4 million at Embassy Suites Portland as a result of reduced estimated cash flows resulting from changes to the expected holding periods of these hotel properties. The impairment charges were based on methodologies which include the development of the discounted cash flow method of the income approach with support based on the market approach, which are considered Level 3 valuation techniques. During the years ended December 31, 2023 and 2022, no impairment charges were recorded.
The following table presents our hotel property measured at fair value as a result of the aforementioned impairment charges aggregated by the level in the fair value hierarchy within which measurements fall on a non-recurring basis at December 31, 2024, and the related impairment charge recorded (in thousands):
Fair Value as of December 31, 2024
Year Ended December 31, 2024
Level 1Level 2Level 3TotalImpairment Charges
Hilton Costa Mesa
$— $— $30,000 $30,000 $35,908 (1)
Embassy Suites Portland
$— $— $25,000 $25,000 $23,423 (1)
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(1)    The impairment charges were based on the estimated fair value of each applicable hotel property and were recorded during the year ended December 31, 2024.
Assets Held For Sale
On November 27, 2024, the Company entered into a purchase and sale agreement for the Courtyard Boston Downtown in Boston, Massachusetts. As of December 31, 2024, the Courtyard Boston Downtown was classified as held for sale. Depreciation and amortization ceased as of the date the asset was deemed held for sale. Since the sale of this hotel does not represent a strategic shift that has (or will have) a major effect on our operations or financial results, its results of operations were not reported as discontinued operations in the consolidated financial statements. The Courtyard Boston Downtown sale closed on January 14, 2025. See note 25.
The major classes of assets and liabilities related to assets held for sale included in the consolidated balance sheet at December 31, 2024 were as follows:
December 31, 2024
Assets
Investments in hotel properties, gross
$110,295 
Accumulated depreciation
(23,173)
Investments in hotel properties, net87,122 
Cash and cash equivalents15 
Restricted cash7,858 
Accounts receivable, net652 
Prepaid expenses290 
Other assets293 
Due from third-party hotel managers398 
Assets held for sale$96,628 
Liabilities
Indebtedness, net$97,368 
Accounts payable and accrued expenses1,389 
Accrued interest364 
Due to Ashford Inc., net18 
Liabilities related to assets held for sale$99,139 
On September 1, 2022, the Company sold the Sheraton in Ann Arbor, MI (“Sheraton Ann Arbor”) for total consideration of approximately $35.7 million, which included cash of $34.5 million and an interest-free receivable with an estimated fair value of $1.2 million and a face value of $1.5 million. The payment of the $1.5 million was deferred until the last day of the twenty-fourth month following the closing date. The sale resulted in a loss of approximately $1,000 for the year ended December 31, 2022, which was included in “gain (loss) on consolidation of VIE and disposition of assets” in the consolidated statement of operations. The Company also repaid the $30.0 million mortgage loan secured by the hotel property. See note 7.