Real Estate Properties

12 Months Ended

Dec. 31, 2022

Note 4. Real Estate Properties

As of December 31, 2022, we owned 238 hotels with 40,053 rooms or suites and 765 service-oriented retail properties with 13,374,325 square feet that are primarily subject to “triple net” leases, or net leases where the tenant is generally responsible for payment of operating expenses and capital expenditures of the property during the lease term. Our properties had an aggregate undepreciated carrying value of $9,687,214, including $126,345 classified as held for sale as of December 31, 2022.

Our real estate properties, at cost after impairments, consisted of land of $1,902,587, buildings and improvements of $7,271,864 and furniture, fixtures and equipment of $386,418, as of December 31, 2022; and land of $1,918,385, buildings and improvements of $7,871,626 and furniture, fixtures and equipment of $435,622, as of December 31, 2021. We funded capital improvements to certain of our properties of $115,927, $103,630 and $136,155 during 2022, 2021 and 2020, respectively.

During 2020, we completed a comprehensive rebuilding project of our San Juan, PR hotel as a result of damage sustained during Hurricane Maria in 2017. We recorded a $62,386 gain on insurance settlement during the year ended December 31, 2020 for insurance proceeds received for this damage. Pursuant to GAAP, we increased the building basis of our San Juan hotel for the amount of the insurance proceeds.

At December 31, 2022, 13 of our hotels were on land we leased partially or entirely from unrelated third parties. The average remaining term of the ground leases (including renewal options) is approximately 33 years (range of 12 to 65 years). Ground rent payable under eight of the ground leases is generally calculated as a percentage of hotel revenues. Twelve of the 13 ground leases require annual minimum rents averaging $344 per year; future rents under two ground leases have been prepaid. 15 of our net lease properties are on land we leased partially or entirely from unrelated third parties. The remaining terms on the leases range from one year to 19 years with rents averaging $435 per year. Generally, payments of ground lease obligations are made by our managers or tenants. However, if a manager or tenant does not perform obligations under a ground lease or does not renew any ground lease, we might have to perform obligations under the ground lease or renew the ground lease in order to protect our investment in the affected property. Any pledge, sale or transfer of our interests in a ground lease may require the consent of the applicable ground lessor and its lenders.

Acquisitions

Our allocation of the purchase price of each of our acquisitions based on the estimated fair value of the acquired assets and assumed liabilities is presented in the table below. We accounted for these transactions as acquisitions of assets.


Acquisition Date	Location	Property Type	Rooms or Square Feet	Purchase Price (1)		Land		Land Improvements		Building and Improvements		Furniture, Fixtures and Equipment		Held For Sale		Intangible Assets
Properties acquired during the year ended December 31, 2022
9/12/2022	Stoughton, MA	Land	—	$	2,766	$	2,766	$	—	$	—	$	—	$	—	$	—

Properties acquired during the year ended December 31, 2021
3/9/2021	Nashville, TN	Land	—	$	7,709	$	7,709	$	—	$	—	$	—	$	—	$	—

Properties acquired during the year ended December 31, 2020
3/12/2020	Two states	Net Lease	6,696	$	7,071	$	880	$	—	$	5,363	$	—	$	—	$	828

(1)Includes acquisition related costs.

Dispositions

During the years ended December 31, 2022, 2021 and 2020 we sold 86, 18 and 39 properties, respectively, for an aggregate sales price of $559,848, $52,332 and $174,172, respectively, excluding closing costs, as presented in the table below. The sales of these properties in the table below do not represent significant dispositions individually or in the aggregate nor do they represent a strategic shift. As a result, the results of the operations of these properties are included in continuing operations through the date of sale in our consolidated statements of comprehensive income (loss).


Year of Sale	Property Type	Number of Properties	Rooms or Suites/Square Feet	Gross Sales Price		Gain/(Loss) on Sale
Properties sold during the year ended December 31, 2022
2022	Hotels	65	8,296	$	543,413	$	48,202
2022	Net Lease	21	138,638	16,435		(384)
		86	8,296 / 138,638	$	559,848	$	47,818

Properties sold during the year ended December 31, 2021
2021	Hotels	7	669	$	40,552	$	9,590
2021	Net Lease	11	97,276	11,780		1,932
		18	669 / 97,276	$	52,332	$	11,522

Properties sold during the year ended December 31, 2020
2020	Hotels	18	2,046	$	85,787	$	17,550
2020	Net Lease	21	1,375,483	88,385		(15,289)
		39	2,046 / 1,375,483	$	174,172	$	2,261

From January 1, 2023 through February 24, 2023, we sold eight hotels with 1,097 rooms and a carrying value of $47,517 for a sale price of $53,268, excluding closing costs. We have also entered into agreements to sell ten hotels with 1,429 rooms and an aggregate carrying value of $62,698 for an aggregate sales price of $103,056 and two net lease properties with 2,384 square feet with an aggregate carrying value of $648 for an aggregate sales price of $670, excluding closing costs and are in the process of marketing two net lease properties with a carrying value of $729. We currently expect the sale of these properties to be completed by the end of the first quarter of 2023.

As of December 31, 2022, we had 18 hotels with 2,526 rooms with an aggregate carrying value of $110,215 classified as held for sale and four net lease properties with 9,667 square feet with an aggregate carrying value of $1,377 classified as held for sale. See Notes 5 and 14 for further information on these properties.