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Investments in Hotel Properties, net
 12 Months Ended
Dec. 31, 2022
Property, Plant and Equipment [Abstract]  
Investments in Hotel Properties, net Investments in Hotel Properties, net
Investments in hotel properties, net consisted of the following (in thousands):
December 31, 2022December 31, 2021
Land$630,489 $480,530 
Buildings and improvements1,511,949 1,215,810 
Furniture, fixtures and equipment147,019 123,954 
Construction in progress22,890 12,038 
Residences12,746 12,746 
Total cost2,325,093 1,845,078 
Accumulated depreciation(440,492)(399,481)
Investments in hotel properties, net$1,884,601 $1,445,597 
For the years ended December 31, 2022, 2021 and 2020, depreciation expense was $78.0 million, $73.0 million and $72.8 million, respectively.
Impairment Charges and Insurance Recoveries
For the year ended December 31, 2020, the Company received proceeds of $14.5 million from our insurance carriers for property damage and business interruption from Hurricane Irma. In September 2020, the Company reached a final settlement with its insurance carriers related to Hurricane Irma. Upon settlement, the Company recorded a gain of $10.1 million as the proceeds received exceeded the carrying value of the hotel property at the time of the loss.
For the year ended December 31, 2021, we recognized a gain of $481,000 associated with proceeds received from an insurance claim. There was no such gain recognized for the year ended December 31, 2022.
During the years ended December 31, 2022, 2021 and 2020, no impairment charges were recorded.
The Ritz-Carlton Reserve Dorado Beach
On March 11, 2022, the Company acquired a 100% interest in the 96-room Ritz-Carlton Reserve Dorado Beach in Dorado, Puerto Rico. The total consideration consisted of $104.0 million of cash and 6.0 million shares of the Company’s common stock with a fair value of approximately $35.0 million. Additionally, the Company assumed a $54.0 million mortgage loan with a fair value of approximately $58.6 million. See note 6 for further discussion regarding the mortgage loan. On March 14, 2022, the Company filed a resale registration statement on Form S-3, which was declared effective by the SEC on April 1, 2022, to register for resale the 6.0 million shares of common stock.
We accounted for this acquisition 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. The cost of the acquisition including transaction costs of approximately $1.9 million, was allocated to the individual assets acquired and liabilities assumed on a relative fair value basis, which 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):
Land$79,711 
Buildings and improvements102,105 
Furniture, fixtures and equipment 15,405 
Investments in hotel properties197,221 
Restricted cash1,091 
Inventories1,184 
Mortgage loan(58,601)
$140,895 
Net other assets (liabilities)$(9,966)
The results of operations of the hotel property have been included in our results of operations from 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, 2022:
Year Ended December 31, 2022
Total revenue$61,246 
Net income (loss)7,583 
Four Seasons Resort Scottsdale
On December 1, 2022, the Company acquired a 100% interest in the 210-room Four Seasons Resort Scottsdale at Troon North in Scottsdale, Arizona. The total consideration for the acquisition was $267.8 million.
We accounted for this acquisition 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. The cost of the acquisition including transaction costs of approximately $538,000, was allocated to the individual assets acquired and liabilities assumed on a relative fair value basis, which 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):
Land$70,248 
Buildings and improvements181,560 
Furniture, fixtures and equipment 16,050 
Investments in hotel properties267,858 
Inventories480 
$268,338 
Net other assets (liabilities)$(691)
The results of operations of the hotel property have been included in our results of operations from 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, 2022:
Year Ended December 31, 2022
Total revenue$5,194 
Net income (loss)934