Investment in Hotel Properties, net

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Investments in hotel properties, net consisted of the following (in thousands):



	December 31,
	2016			2015
Land	$	210,696		$	227,620
Buildings and improvements	972,412			1,017,086
Furniture, fixtures and equipment	70,922			68,529
Construction in progress	4,382			2,386
Total cost	1,258,412			1,315,621
Accumulated depreciation	(243,880		)	(224,142		)
Investments in hotel properties, net	$	1,014,532		$	1,091,479

The cost of land and depreciable property, net of accumulated depreciation, for federal income tax purposes was approximately $1.0 billion and $1.1 billion as of December 31, 2016 and 2015, respectively.

For the years ended December 31, 2016, 2015 and 2014, depreciation expense was $45.7 million, $43.6 million and $40.5 million, respectively.

Final Purchase Price Allocation

Ritz-Carlton St. Thomas

On December 15, 2015, we acquired a 100% interest in the Ritz-Carlton St. Thomas in St. Thomas, U.S. Virgin Islands for total consideration of $64.0 million. Subsequent to the close of the transaction, we completed the financing of a $42.0 million mortgage loan. See note 9. We prepared a purchase price allocation of the assets acquired and liabilities assumed. The final purchase price allocation was prepared with the assistance of a third-party appraisal firm during the three months ended March 31, 2016. The final purchase price allocation resulted in adjustments to land, buildings and improvements and furniture, fixtures and equipment, which resulted in a $25,000 increase in depreciation expense for the three months ended March 31, 2016. This valuation is considered a Level 3 valuation technique.

The following table summarizes the estimated fair value of the assets acquired and liabilities assumed in the acquisition (in thousands):



	Preliminary Allocations as of December 31, 2015		Adjustments			Final Allocations as of March 31, 2016
Land	$	25,264	$	269		$	25,533
Buildings and improvements	34,853		(3,100		)	31,753
Furniture, fixtures, and equipment	3,883		2,831			6,714
	$	64,000	$	—		$	64,000