XML 26 R13.htm IDEA: XBRL DOCUMENT v3.25.3
Dispositions, Impairment Charges and Assets Held For Sale
 9 Months Ended
Sep. 30, 2025
Discontinued Operations and Disposal Groups [Abstract]  
Dispositions, Impairment Charges and Assets Held For Sale Dispositions, Impairment Charges and Assets Held For Sale
Dispositions
On January 10, 2025, the Company completed the sale of the 315-room Courtyard Boston Downtown located in Boston, Massachusetts, for $123.0 million, subject to customary pro rations and adjustments, resulting in a recognized gain of $32.1 million. This gain is reported within “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the Company’s consolidated statement of operations.
On April 14, 2025, the Residence Inn Orlando sold a parcel of land for $7.2 million, net of selling expenses, resulting in a recognized gain of $6.7 million. This gain is reported within “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the Company’s consolidated statements of operations.
On May 19, 2025, the Company sold state tax credits held by the Le Méridien Fort Worth property for $18.8 million in cash.
On August 11, 2025, the Company completed the sale of the 78-room Residence Inn Evansville located in Evansville, Indiana for $6.0 million, subject to customary pro rations and adjustments.
On August 22, 2025, the Company completed the sale of the 242-room Hilton Houston NASA Clear Lake located in Houston, Texas for $27.8 million, subject to customary pro rations and adjustments, resulting in a recognized gain of $16.5 million. This gain is reported within “gain (loss) on consolidation of VIE and disposition of assets and hotel properties” in the Company’s consolidated statement of operations.
The results of operations for disposed and derecognized hotel properties are included in net income (loss) through the date of disposition. See note 2 for the fiscal year 2024 and 2025 dispositions. The following table includes condensed financial information from the Company’s dispositions (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Total hotel revenue
$1,478 $12,253 $8,101 $68,841 
Total hotel operating expenses(1,815)(8,484)(7,606)(52,523)
Property taxes, insurance and other(164)(593)(538)(5,194)
Depreciation and amortization— (1,144)(811)(7,355)
Impairment charges— — (1,447)— 
Total operating expenses(1,979)(10,221)(10,402)(65,072)
Gain (loss) on consolidation of VIE and disposition of assets and hotel properties16,753 9 48,659 94,406 
Gain (loss) on derecognition of assets
9,703 11,114 29,649 156,748 
Operating income (loss)25,955 13,155 76,007 254,923 
Interest income— 82 — 248 
Interest expense and amortization of discounts and loan costs(271)(2,843)(2,006)(14,337)
Interest expense associated with hotels in receivership
(9,684)(11,120)(29,632)(35,162)
Write-off of premiums, loan costs and exit fees— (850)(67)(838)
Gain (loss) on extinguishment of debt(57)2,745 (57)2,790 
Income (loss) before income taxes15,943 1,169 44,245 207,624 
(Income) loss before income taxes attributable to redeemable noncontrolling interests in operating partnership(238)(14)(686)(2,561)
Net income (loss) attributable to the Company$15,705 $1,155 $43,559 $205,063 
Impairment Charges
For the three and nine months ended September 30, 2025, we recorded impairment charges of $18.4 million and $19.8 million, respectively. We recorded $18.4 million of impairment charges in the three months ended September 30, 2025 at the New Orleans Le Pavillon Hotel. The nine months ended September 30, 2025 includes impairment charges of $18.4 million and $1.4 million at the New Orleans Le Pavillon Hotel and the Residence Inn Evansville, respectively.
The impairment charges were a result of reduced estimated future cash flows resulting from reductions to the expected holding periods of the hotel properties. The impairment charge for the Residence Inn Evansville was based on the market approach methodology which compares the net book value of the assets to their fair market value. The impairment charge for the New Orleans Le Pavillon Hotel was based on the income approach utilizing a discounted cash flow methodology, supported by the market approach. These valuation techniques are considered Level 3 techniques under the fair value hierarchy.
For the three and nine months ended September 30, 2024, no impairment charges were recorded related to hotel properties.
The following table presents the fair value of our hotel property within the fair value hierarchy subsequent to the aforementioned non-recurring impairment charge (in thousands):
Fair Value as of September 30, 2025
Level 1Level 2Level 3Total
New Orleans Le Pavillon Hotel
$— $— $42,500 $42,500 
Assets Held For Sale
On September 11, 2025, the Company entered into a purchase and sale agreement for the Residence Inn San Diego Sorrento Mesa in San Diego, California. As of September 30, 2025, this property 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 Residence Inn San Diego Sorrento Mesa sale closed on October 15, 2025. See note 18.
The major classes of assets and liabilities related to assets held for sale included in the consolidated balance sheet were as follows:
September 30, 2025
Assets
Investments in hotel properties, gross
$34,193 
Accumulated depreciation
(16,158)
Investments in hotel properties, net18,035 
Cash and cash equivalents2 
Restricted cash2,707 
Accounts receivable, net158 
Prepaid expenses and other assets
70 
Due from third-party hotel managers478 
Assets held for sale$21,450 
Liabilities
Indebtedness, net$28,355 
Accounts payable and accrued expenses642 
Accrued interest239 
Liabilities related to assets held for sale$29,236