Investment in Unconsolidated Entities

On June 9, 2014, the Company acquired a 10.3% interest in the NewINK JV, a joint venture between affiliates of NorthStar Realty Finance Corp. ("NorthStar") and the Operating Partnership. The Company accounts for this investment under the equity method. NorthStar merged with Colony Capital, Inc. ("Colony") on January 10, 2017 to form a new company, CLNS, which owns a 89.7% interest in the NewINK JV. As of September 30, 2017 and 2016, the Company’s share of partners’ capital in the NewINK JV was approximately $52.8 million and $11.0 million, respectively, and the total difference between the carrying amount of investment and the Company’s share of partners’ capital was approximately $58.7 million and $16.3 million, respectively, (for which the basis difference related to amortizing assets is being recognized over the life of the related assets as a basis difference adjustment). The value of NewINK JV assets and liabilities were adjusted to reflect estimated fair market value at the time Colony merged with NorthStar. The Company serves as managing member of the NewINK JV. During the three and nine months ended September 30, 2017 and 2016, the Company received cash distributions from the NewINK JV as follows (in thousands):



	For the three months ended				For the nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Cash generated from other activities and excess cash	$	1,182	$	1,542	$	1,901	$	4,111
Total	$	1,182	$	1,542	$	1,901	$	4,111

On November 17, 2014, the Company acquired a 10.0% interest in the Inland JV, a joint venture between affiliates of NorthStar and the Operating Partnership. The Company accounts for this investment under the equity method. NorthStar merged with Colony Capital, Inc. ("Colony") on January 10, 2017 to form a new company, CLNS, which owns a 90.0% interest in the Inland JV. As of September 30, 2017 and 2016, the Company's share of partners' capital in the Inland JV was approximately $36.6 million and $20.9 million, respectively, and the total difference between the carrying amount of the investment and the Company's share of partners' capital is approximately $11.2 million and $0.0 million, respectively (for which the basis difference related to amortizing assets is being recognized over the life of the related assets as a basis difference adjustment). The value of Inland JV assets and liabilities were adjusted to reflect estimated fair market value at the time Colony merged with NorthStar. The Company serves as managing member of the Inland JV. During the three and nine months ended September 30, 2017 and 2016, the Company received cash distributions from the Inland JV as follows (in thousands):



	For the three months ended				For the nine months ended
	September 30,				September 30,
	2017		2016		2017	2016
Cash generated from other activities and excess cash	$	100	$	1,000	100	$	2,500
Total	$	100	$	1,000	100	$	2,500

On May 9, 2017, the NewINK JV refinanced the $840.0 million loan collateralized by the 47 hotels with a new $850.0 million loan. The new non-recourse loan is with Morgan Stanley Bank, N.A. The new loan bears interest at a rate of LIBOR plus a spread of 2.79%, has an initial maturity of June 7, 2019 and three one-year extension options.

On June 9, 2017, the Inland JV refinanced the $817.0 million loan collateralized by the 48 hotels with a new $780.0 million non-recourse loan with Column Financial, Inc. On June 9, 2017, the Company contributed an additional $5.0 million of capital related to its share in the Inland JV to reduce the debt collateralized by the 48 hotels. The new loan bears interest at a rate of LIBOR plus a spread of 3.3%, has an initial maturity of July 9, 2019 and three one-year extension options.

The Company’s ownership interests in the JVs are subject to change in the event that either the Company or CLNS calls for additional capital contributions to the respective JVs necessary for the conduct of business, including contributions to fund costs and expenses related to capital expenditures. In connection with (i) the non-recourse mortgage loan secured by the NewINK JV properties and the related non-recourse mezzanine loan secured by the membership interests in the owners of the NewINK JV properties and (ii) the non-recourse mortgage loan secured by the Inland JV properties, the Operating Partnership provided the applicable lenders with customary environmental indemnities, as well as guarantees of certain customary non-recourse carveout provisions such as fraud, material and intentional misrepresentations and misapplication of funds. In some circumstances, such as the bankruptcy of the applicable borrowers, the guarantees are for the full amount of the outstanding debt, but in most circumstances, the guarantees are capped at 15% of the debt outstanding at the time in question (in the case of the NewINK loans) or 20% of the debt outstanding at the time in question (in the case of the Inland loans). In connection with each of the NewINK and Inland loans, the Operating Partnership has entered into a contribution agreement with its JV partner whereby the JV partner is, in most cases, responsible to cover such JV partner’s pro rata share of any amounts due by the Operating Partnership under the applicable guarantees and environmental indemnities. The Company manages the JVs and will receive a promote interest in each applicable JV if it meets certain return thresholds for such JV. CLNS may also approve certain actions by the JVs without the Company’s consent, including certain property dispositions conducted at arm’s length, certain actions related to the restructuring of the applicable JV and removal of the Company as managing member in the event the Company fails to fulfill its material obligations under the applicable joint venture agreement.

The Company's investment in the NewINK JV and the Inland JV were $(6.0) million and $25.4 million, respectively, at September 30, 2017 and $(6.0) million and $20.4 million, respectively, at December 31, 2016. The following table sets forth the combined components of net income, including the Company’s share, related to the NewINK JV and Inland JV for the three months ended September 30, 2017 and 2016 (in thousands):



	For the three months ended				For the nine months ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenue	$	134,048	$	132,991	$	372,813	$	372,251
Total hotel operating expenses	78,107		75,948		221,366		218,400
Operating income	$	55,941	$	57,043	$	151,447	$	153,851
Net income from continuing operations	$	7,721	$	8,794	$	8,282	$	8,673
Net income	$	7,721	$	8,794	$	8,282	$	8,673

Income allocable to the Company	$	790	$	901	$	855	$	896
Basis difference adjustment	399		150		1,176		450
Total income from unconsolidated real estate entities attributable to the Company	$	1,189	$	1,051	$	2,031	$	1,346