Investments in Hotel Properties, net

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



	December 31,
	2019			2018
Land	$	455,298		$	428,567
Buildings and improvements	1,173,151			989,180
Furniture, fixtures and equipment	129,595			103,025
Construction in progress	33,130			42,034
Total cost	1,791,174			1,562,806
Accumulated depreciation	(309,752		)	(262,905		)
Investments in hotel properties, net	$	1,481,422		$	1,299,901

The cost of land and depreciable property, net of accumulated depreciation, for U.S. federal income tax purposes was approximately $1.3 billion and $1.3 billion as of December 31, 2019 and 2018, respectively.

For the years ended December 31, 2019, 2018 and 2017, depreciation expense was $69.5 million, $56.8 million and $52.1 million, respectively.

Ritz-Carlton, Lake Tahoe

On January 15, 2019, the Company acquired a 100% interest in the 170-room Ritz-Carlton, Lake Tahoe located in Truckee, California for $120.0 million. The Company incurred $640,000 in acquisition costs. In connection with the acquisition the Company completed the financing of a $54.0 million mortgage loan secured by the Ritz-Carlton, Lake Tahoe. See note 8.

We accounted for this transaction as an asset acquisition because substantially all of the fair value of the gross assets acquired were concentrated in a group of similar identifiable assets. We allocated the cost of the acquisition including transaction costs to the individual assets acquired and liabilities assumed on a relative fair value basis, which is considered a Level 3 valuation technique, as noted in the following table (in thousands):



Land ⁽¹⁾	$	26,731
Buildings and improvements	89,569
Furniture, fixtures and equipment	2,034
	$	118,334
Capital reserves	6,117
Key money	(3,811		)
	$	120,640
Net other assets (liabilities)	$	510

________


⁽¹⁾	Amount includes the value of a 3.4-acre parking lot adjacent to the hotel which could be used for future development of luxury town homes.

The results of operations of the hotel property have been included in our results of operations as of the acquisition date. The table below summarizes the total revenue and net income (loss) in our consolidated statements of operations for the year ended December 31, 2019 (in thousands):



	Year Ended December 31, 2019
Total revenue	$	43,274
Net income (loss)	$	606

Impairment Charges and Insurance Recoveries

In September 2017, the Ritz-Carlton, St. Thomas located in St. Thomas, USVI, the Pier House Resort located in Key West, FL and the Tampa Renaissance located in Tampa, FL (sold in 2018) were impacted by the effects of Hurricanes Irma and Maria. The Company holds insurance policies that provide coverage for property damage and business interruption after meeting certain deductibles at all of its hotel properties. During the year ended December 31, 2017, the Company recognized impairment charges, net of anticipated insurance recoveries of $1.1 million. Additionally, the Company recognized remediation and other costs, net of anticipated insurance recoveries of $3.8 million, included primarily in other hotel operating expenses. As of December 31, 2017, the Company recorded an insurance receivable of $8.8 million, net of deductibles of $4.9 million, related to the anticipated insurance recoveries. During the year ended December 31, 2017, the Company received proceeds of $11.1 million for business interruption losses associated with lost profits, of which $4.1 million was recorded as “other” hotel revenue in our consolidated statement of operations, $3.3 million represented reimbursement of incurred expenses in excess of the deductible of $1.1 million and $3.7 million was recorded as a reduction to insurance receivable.

For the years ended December 31, 2019 and 2018, the Company recorded revenue from business interruption losses associated with lost profits from the hurricanes of $19.3 million and $13.9 million, respectively, which is included in “other” hotel revenue in our consolidated statements of operations. Additionally, for the year ended December 31, 2019, the Company recorded a gain of $26.2 million upon settlement of a portion of the insurance claim. The Company received proceeds of $36.6 million and $48.1 million, from our insurance carriers for property damage and business interruption from the hurricanes during the years ended December 31, 2019 and 2018, respectively.

Additionally, during the years ended December 31, 2019 and 2018, the Company recorded revenue of $0 and $1.9 million, respectively, net of deductibles of $500,000, for business interruption losses associated with lost profits at the Bardessono Hotel and Hotel Yountville as a result of the Napa wildfires, which is included in “other” hotel revenue in our consolidated statements of operations. During the years ended December 31, 2019 and 2018, the Company recorded impairment charges of $0 and $71,000, respectively, as a result of a change in estimate of property damage as a result of the hurricanes. During the year ended December 31, 2019, the Company recorded a loss of $1.2 million related to the disposition of FF&E resulting from the renovation at The Notary Hotel. As of December 31, 2019 and 2018, the Company had a net liability of $2.2 million and $17.1 million, respectively, included in “other liabilities” on the consolidated balance sheet, as it has received insurance proceeds in excess of the sum of its impairment, remediation expenses and business interruption revenue recorded through December 31, 2019. The Company will not record revenue for business interruption losses associated with lost profits or gains from property damage recoveries until the amount for such recoveries is known and the amount is realizable.