Management Agreements and Leases	6 Months Ended
Management Agreements and Leases	Jun. 30, 2022
Leases [Abstract]
Management Agreements and Leases	Note 5. Management Agreements and Leases As of June 30, 2022, we owned 247 hotels which were included in six operating agreements and 775 service oriented retail properties net leased to 176 tenants. We do not operate any of our properties. Hotel agreements Sonesta agreement. As of June 30, 2022, Sonesta managed 40 of our full-service hotels, 113 of our extended stay hotels, and 52 of our select service hotels pursuant to management agreements for all of the hotels. The hotels Sonesta managed for us comprised approximately 47.9% of our total historical real estate investments. On January 7, 2022, we and Sonesta amended and restated our management agreements effective January 1, 2022. We refer to our management agreements with Sonesta collectively as our Sonesta agreement. As of that date, we owned 261 hotels managed by Sonesta and we expected to sell 67 of those hotels, or the Sale Hotels. Among other things, the amendments to the agreements between us and Sonesta for 194 hotels we did not then expect to sell, or the Retained Hotels, are as follows: •The term for the Retained Hotels expires on January 31, 2037 and includes two 15-year renewal options. •All Retained Hotels are subject to a pooling agreement that combines the management agreements for the Retained Hotels for purposes of calculating gross revenues, hotel operating expenses, fees and distributions and the owner’s priority return due to us. •The owner’s priority return for the Retained Hotels was initially set at $325,200 annually. We have the right to terminate Sonesta’s management of specific hotels that we own if minimum performance thresholds are not met starting in 2023. •We will renovate the Retained Hotels to comply with agreed upon brand standards. As we advance such funding or fund other capital expenditures, the aggregate annual owner’s priority return due to us will increase by 6% of the amounts funded. •Trade area restrictions by hotel brand were added to define boundaries to protect our owned hotels in response to Sonesta increasing its franchising and third-party management activities. For the Sale Hotels, the term was extended to December 31, 2022 (or, if earlier, until the applicable hotel has been sold) and the reserve established for the regular refurbishment of our hotels, or FF&E, reserve funding requirement was removed. The Sale Hotels are subject to a pooling agreement that combines the management agreements for the Sale Hotels for purposes of calculating gross revenues, hotel operating expenses, management and related fees and the owner’s priority return due to us. Our owner’s priority return will be reduced by the current owner’s priority return for a Sale Hotel once sold. We sold 56 of the Sale Hotels as of June 30, 2022 for an aggregate sales price of $487,868, excluding closing costs. We recognized a net gain of $44,869 and the total annual owner’s priority return was reduced by $68,111 in connection with these sales. As of June 30, 2022, the total annual owner’s priority return for the remaining 11 Sale Hotels we then owned was $17,519 as of that date. Subsequent to June 30, 2022, we sold an additional three Sale Hotels for an aggregate sales price of $21,500, excluding closing costs, and the total annual owner’s priority return was reduced by $3,523 in connection with these sales. As of August 3, 2022, we had agreements to sell an additional four Sale Hotels for an aggregate sales price of $24,250 and having a net book value of $18,516 and a total annual owner’s priority return of $5,578 as of June 30, 2022. These pending sales are subject to conditions; as a result, those sales may not occur, may be delayed or their terms may change. See Notes 6 and 10 for further information regarding our sales of hotels managed by Sonesta. Our Sonesta agreement provides that we are paid an annual owner’s priority return if gross revenues of the hotels, after payment of hotel operating expenses and management and related fees (other than Sonesta’s incentive fee, if applicable), are sufficient to do so. The Sonesta agreement further provides that we are paid an additional return equal to 80% of the operating profits, as defined therein, after reimbursement of owner or manager advances and with respect to the Retained Hotels, FF&E reserve escrows and Sonesta’s incentive fee, if applicable. Our Sonesta hotels generated net operating cash flow of $77,424 and $25,198 for the three months ended June 30, 2022 and 2021, respectively, and net operating cash flow of $80,452 and a net operating cash flow deficit of $12,196 for the six months ended June 30, 2022 and 2021, respectively. Pursuant to our Sonesta agreement, we incurred management, reservation and system fees and reimbursement costs for certain guest loyalty, marketing program and third-party reservation transmission fees of $32,682 and $22,046 for the three months ended June 30, 2022 and 2021, respectively, and $56,479 and $33,321 for the six months ended June 30, 2022 and 2021, respectively. These fees and costs are included in hotel operating expenses in our condensed consolidated statements of comprehensive income (loss). In addition, we incurred procurement and construction supervision fees payable to Sonesta of $269 and $643 for the three months ended June 30, 2022 and 2021, respectively, and $556 and $1,387 for the six months ended June 30, 2022 and 2021, respectively, which amounts have been capitalized in our condensed consolidated balance sheets and are depreciated over the estimated useful lives of the related capital assets. Our Sonesta agreement requires us to fund capital expenditures that we approve at the hotels. We incurred capital expenditures for hotels included in our Sonesta agreement in an aggregate amount of $33,226 and $56,452 during the six months ended June 30, 2022 and 2021, respectively, which resulted in increases in our contractual annual owner’s priority returns of $1,994 and $3,990, respectively. We owed Sonesta $7,028 and $18,433 for capital expenditures and other reimbursements at June 30, 2022 and 2021, respectively. Sonesta owed us $20,527 and $4,592 in owner’s priority returns as of June 30, 2022 and December 31, 2021, respectively. Amounts due from Sonesta are included in due from related persons and amounts owed to Sonesta are included in due to related persons in our condensed consolidated balance sheets. All of the hotels operated under the Retained Hotels management agreements require that 5% of the hotel gross revenues be escrowed for future capital expenditures as FF&E reserves, subject to available cash flows after payment of the owner’s priority returns due to us. No FF&E escrow deposits were required during either of the three or six months ended June 30, 2022 or 2021. We are required to maintain working capital for each of our hotels managed by Sonesta and have advanced a fixed amount based on the number of rooms in each hotel to meet the cash needs for hotel operations. The sales of the hotels managed by Sonesta referenced above resulted in a return to us of working capital amounts we had previously advanced with respect to those hotels. As of June 30, 2022 and December 31, 2021, we had advanced $51,206 and $56,697, respectively, of initial working capital to Sonesta net of any working capital returned to us on termination of the applicable management agreements in connection with such sales. These amounts are included in other assets in our condensed consolidated balance sheets. Any remaining working capital would be returned to us upon termination in accordance with the terms of our Sonesta agreement. See Notes 6 and 10 for further information regarding our relationship, agreements and transactions with Sonesta. Hyatt agreement. As of June 30, 2022, Hyatt managed 17 of our select service hotels pursuant to a portfolio management agreement that expires on March 31, 2031, or our Hyatt agreement, and provides that, as of June 30, 2022, we are to be paid an annual owner’s priority return of $12,735. Any returns we receive from Hyatt are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses. Hyatt has provided us with a $30,000 limited guarantee for 75% of the aggregate annual owner's priority returns due to us that will become effective upon substantial completion of planned renovations of the hotels we currently expect to occur in 2023. We realized returns of $4,525 and $2,311 during the three months ended June 30, 2022 and 2021, respectively, and $6,388 and $3,867 for the six months ended June 30, 2022 and 2021, respectively, under our Hyatt agreement. We incurred capital expenditures for certain hotels included in our Hyatt agreement of $11,936 during the six months ended June 30, 2022, which resulted in an aggregate increase in our contractual annual owner’s priority returns of $716. We did not incur capital expenditures for any of the hotels included in our Hyatt agreement during the six months ended June 30, 2021. Radisson agreement. As of June 30, 2022, Radisson managed eight of our full service hotels pursuant to a portfolio management agreement that expires on July 31, 2031, or our Radisson agreement, and provides that we are to be paid an annual owner’s priority return of $10,200. Any returns we receive from Radisson are currently limited to the hotels’ available cash flows, if any, after payment of operating expenses. Radisson has provided us with a $22,000 limited guarantee for 75% of the aggregate annual owner's priority returns due to us that will become effective upon substantial completion of planned renovations of certain of the hotels we currently expect to occur in 2023. We realized returns of $3,020 and $4,906 during the three months ended June 30, 2022 and 2021, respectively, and $3,474 and $10,056 for the six months ended June 30, 2022 and 2021, respectively, under our Radisson agreement. We incurred capital expenditures of $298 for the hotels included in our Radisson agreement for the three and six months ended June 30, 2022. We did not incur capital expenditures for any of the hotels included in our Radisson agreement during the three or six months ended June 30, 2021. Marriott agreement. As of June 30, 2022, Marriott managed 16 of our hotels. We were previously in arbitration proceedings with Marriott regarding, among other things, the validity of the timing of the termination of the Marriott agreements in 2020, including an exit hotel agreement which, if not terminated, would have required us to sell the 16 hotels encumbered with a Marriott brand. We entered an agreement with Marriott regarding the 16 hotels currently managed by Marriott, pursuant to which we agreed to have these hotels remain Marriott branded until the arbitration was resolved. On January 18, 2022, the arbitration concluded, and we are currently evaluating our plans to maximize the value to us of these hotels, including the potential disposition of the hotels. Our Marriott hotels generated net operating cash flow of $3,842 and $2,341 during the three months ended June 30, 2022 and 2021, respectively, and net operating cash flow of $3,593 and a net operating cash flow deficit of $12,580 during the six months ended June 30, 2022 and 2021, respectively. Any returns we receive from Marriott are limited to the hotels’ available cash flows, if any, after payment of operating expenses. We did not incur capital expenditures for any of the hotels included in our Marriott agreement during the six months ended June 30, 2022. We incurred capital expenditures of $7,250 for the hotels included in our Marriott agreement during the six months ended June 30, 2021. Other. Our management agreement with IHG for one hotel expires on January 31, 2026. Our IHG hotel generated net operating cash flow of $1,208 and $156 during the three months ended June 30, 2022 and 2021, respectively, and net operating cash flow of $1,337 and a cash flow deficit of $1,344 for the six months ended June 30, 2022 and 2021, respectively. Any returns we receive from IHG are limited to the hotel’s available cash flows, if any, after payment of operating expenses. Net lease portfolio As of June 30, 2022, we owned 775 service-focused retail net lease properties with 13,406,568 square feet with leases requiring annual minimum rents of $372,120 with a weighted (by annual minimum rents) average remaining lease term of 10.0 years. The portfolio was 98.8% leased by 176 tenants operating under 134 brands in 20 distinct industries. TA leases. TA is our largest tenant, leasing 29.2% of our total historical real estate investments as of June 30, 2022. We lease to TA a total of 179 travel centers under five leases that expire between 2029 and 2035, subject to TA’s right to extend those leases, and require annual minimum rents of $246,110 as of June 30, 2022. In addition, TA is required to pay us previously deferred rent obligations in quarterly installments of $4,404 through January 31, 2023. TA paid $4,404 and $8,808 of deferred rent to us for each of the three and six months ended June 30, 2022 and 2021, respectively. The remaining balance of previously deferred rents was $13,211 and $22,018 as of June 30, 2022 and December 31, 2021, respectively. We recognized rental income from our TA leases of $62,186 and $62,077 for the three months ended June 30, 2022 and 2021, respectively, and $124,269 and $124,154 for the six months ended June 30, 2022 and 2021, respectively. Rental income was reduced by $3,241 and $3,217 for the three months ended June 30, 2022 and 2021, respectively, and $6,585 and $6,522 for the six months ended June 30, 2022 and 2021, respectively, to record the deferred rent obligations under our TA leases and the estimated future payments to us by TA for the cost of removing underground storage tanks on a straight-line basis. As of June 30, 2022 and December 31, 2021, we had receivables for current rent amounts owed to us by TA and straight-line rent adjustments of $37,496 and $48,168, respectively. These amounts are included in due from related persons in our condensed consolidated balance sheets. In addition to the rental income that we recognized during the three months ended June 30, 2022 and 2021 as described above, our TA leases require TA to pay us percentage rent based upon increases in certain sales. We recognize percentage rent due under our TA leases as rental income when all contingencies are met. We had aggregate deferred percentage rent under our TA leases of $2,839 and $1,591 for the three months ended June 30, 2022 and 2021, respectively, and $5,338 and $2,977 for the six months ended June 30, 2022 and 2021, respectively. Our TA leases do not require FF&E escrow deposits. However, TA is required to maintain the leased travel centers, including structural and non-structural components. Under our TA leases, TA may request that we fund capital improvements in return for increases in TA’s annual minimum rent equal to 8.5% of the amounts funded. We did not fund any capital improvements to our properties that we leased to TA during the three and six months ended June 30, 2022 or 2021. See Notes 6 and 10 for further information regarding our relationship with TA. Our other net lease agreements generally provide for minimum rent payments and in addition may include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight-line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We recognized rental income from our net lease properties (excluding TA) of $34,607 and $33,479 for the three months ended June 30, 2022 and 2021, respectively, which included $1,530 and $2,919, respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight-line basis, and $68,927 and $63,163 for the six months ended June 30, 2022 and 2021, respectively, which included $2,901 and $5,800, respectively, of adjustments to record scheduled rent changes under certain of our leases on a straight-line basis. We continually review receivables related to rent, straight-line rent and property operating expense reimbursements and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. The review includes an assessment of whether substantially all of the amounts due under a tenant’s lease are probable of collection. For leases that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For leases that are deemed not probable of collection, revenue is recorded as cash is received. We recognize all changes in the collectability assessment for an operating lease as an adjustment to rental income. We reduced our reserves for uncollectible amounts and increased rental income by $160 and $667 for the three and six months ended June 30, 2022, respectively, based on our assessment of collectability and cash received from certain tenants. We recorded reserves for uncollectable amounts against rental income of $1,176 and $5,960 for the three and six months ended June 30, 2021, respectively. We had reserves for uncollectable rents of $11,259 and $15,519 as of June 30, 2022 and December 31, 2021, respectively, included in other assets in our condensed consolidated balance sheets. As of June 30, 2022, we had $5,492 of deferred rents outstanding related to five tenants who represented approximately 3.7% of our annualized rental income of our net lease retail portfolio as of June 30, 2022, to which we granted rent relief during the COVID-19 pandemic. These deferred rents are included in other assets, net in our condensed consolidated balance sheets. The deferred amounts did not impact our operating results for the three months ended June 30, 2022.