Investment in Unconsolidated Entities

9 Months Ended

Sep. 30, 2020

Investment in Unconsolidated Entities [Abstract]

Investment in Unconsolidated Joint Ventures

As of September 30, 2020 and December 31, 2019, the Company owned 50% interests in joint ventures that owned two hotel properties. During the three months ended September 30, 2020, one of the unconsolidated joint ventures determined the property ground lease will likely terminate no later than October 31, 2021 and the property will revert to the ground lessor at that time. As a result, the Company recorded an impairment loss of $6.5 million to write down the Company's investment in this joint venture. The impairment loss is included in equity in (loss) income from unconsolidated joint ventures in the accompanying consolidated statements of operations and comprehensive (loss) income.

The Company accounts for the investments in these unconsolidated joint ventures under the equity method of accounting. The Company makes adjustments to the equity in income from unconsolidated joint ventures related to the difference between the Company's basis in the investment in the unconsolidated joint ventures as compared to the historical basis of the assets and liabilities of the joint ventures. As of September 30, 2020 and December 31, 2019, the unconsolidated entities' debt consisted entirely of non-recourse mortgage debt.

The following table summarizes the components of the Company's investments in unconsolidated joint ventures (in thousands):



	September 30, 2020		December 31, 2019
Equity basis of the joint venture investments	$	(6,585)	$	(4,236)
Cost of the joint venture investments in excess of the joint venture book value	13,641		19,407
Investment in unconsolidated joint ventures	$	7,056	$	15,171

The following table summarizes the components of the Company's equity in (loss) income from unconsolidated joint ventures (in thousands):


	For the three months ended September 30,				For the nine months ended September 30,
	2020		2019		2020		2019
Operating (loss) income	$	(993)	$	310	$	(843)	$	1,404
Depreciation of cost in excess of book value	(280)		(280)		(839)		(839)
Impairment loss	(6,533)		—		(6,533)		—
Equity in (loss) income from unconsolidated joint ventures	$	(7,806)	$	30	$	(8,215)	$	565