Investment In Hotel Properties

12 Months Ended

Dec. 31, 2012

NOTE 4 - INVESTMENT IN HOTEL PROPERTIES

Investment in hotel properties at December 31, 2012 and 2011 include (in thousands):

	2012		2011

Land	$	105,571	$	76,846
Hotel buildings and improvements		649,699		444,377
Furniture, fixtures and equipment		124,385		103,821
		879,655		625,044
Less accumulated depreciation		145,293		126,168

	$	734,362	$	498,876

Under Development

Investment In Hotel Properties

NOTE 5 - INVESTMENT IN HOTEL PROPERTIES UNDER DEVELOPMENT

In 2012, we entered into an agreement with an affiliate of Hyatt Hotels Corporation to fund $20.3 million in the form of a first mortgage loan on a hotel property in downtown Minneapolis, MN. The $20.3 million represents a portion of the total acquisition cost and renovation costs expected to be incurred to convert the property to a Hyatt Place hotel. Subject to certain conditions, including the successful conversion estimated to be completed in fourth quarter 2013, we plan to purchase the hotel property. Since we anticipate participating in the residual profits of the hotel property, we have classified this loan as an investment in hotel properties under development. We have not recognized interest income on the loan; however, we capitalized interest expense of $0.1 million in 2012 on our investment. At December 31, 2012, our total investment in this hotel property, including capitalized interest was $10.3 million.