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Acquisition of Hotel Properties

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Acquisition of Hotel Properties

Acquisition of Hotel Properties

Hotel Purchase Price Allocation

We acquired the Residence Inn Summerville ("RI Summerville") hotel in Summerville, SC for $20.8 million on August 27, 2018 and the Courtyard Dallas Downtown ("Dallas DT") hotel in Dallas, TX for $49.0 million on December 5, 2018. The allocation of the purchase price of each hotel acquired by the Company in 2018, based on the fair value on the date of its acquisition, was (in thousands):

			RI Summerville						Dallas DT
Acquisition date			8/27/2018						12/5/2018
Number of Rooms			96						167
Land			$	2,300					$	2,900
Building and improvements			17,060						42,760
Furniture, fixtures and equipment			1,234						3,340
Cash			—						5
Accounts receivable			—						8
Prepaid expenses and other assets			—						68
Accounts payable and accrued expenses			(9)						(33)
Net assets acquired, net of cash			$	20,585					$	49,043

The value of the assets acquired was primarily based on a sales comparison approach (for land) and a depreciated replacement cost approach (for building and improvements and furniture, fixtures and equipment). The sales comparison approach uses inputs of recent land sales in the respective hotel markets.  The depreciated replacement cost approach uses inputs of both direct and indirect replacement costs using a nationally recognized authority on replacement cost information as well as the age, square footage and number of rooms of the respective assets. Property acquisition costs of $0.0 million and $0.2 million, respectively were capitalized in 2019 and 2018.

The amount of revenue and operating income from the hotels acquired in 2018 from their respective dates of acquisition through September 30, 2019 is as follows (in thousands):

						For the three months ended September 30,																																										For the nine months ended September 30,
						2019																		2018																		2019																		2018
			Acquisition Date			Revenue						Operating Income						Revenue						Operating Income						Revenue						Operating Income						Revenue						Operating Income
Residence Inn Summerville, SC			08/27/2018			$	895					$	303					$	186					$	(77)					$	2,719					$	966					$	186					$	(112)
Courtyard Dallas Downtown, TX			12/5/2018			$	1,866					$	515					—						—						5,857						1,918						—						—
Total						$	2,761					$	818					$	186					$	(77)					$	8,576					$	2,884					$	186					$	(112)

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- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-URI http://asc.fasb.org/topic&trid=2303972

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- References

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