Investments in Available for Sale Securities

9 Months Ended

Sep. 30, 2017

Investments, Debt and Equity Securities [Abstract]

Investments in Available for Sale Securities

Investments in Available for Sale Securities

At September 30, 2017, we owned 2,637,408 shares of class A common stock of The RMR Group Inc., or RMR Inc. We classify these shares as available for sale securities and carry them at fair value in other assets in our condensed consolidated balance sheets, with unrealized gains and losses reported as a component of shareholders’ equity. Our historical cost basis for these shares is $69,826. At September 30, 2017, our investment in RMR Inc. had a fair value of $135,431, resulting in a cumulative unrealized gain of $65,605 based on RMR Inc.’s quoted share price on The Nasdaq Stock Market LLC, or the Nasdaq, at September 30, 2017 ($51.35 per share).

At September 30, 2017, we owned 4,235,000 common shares of Five Star. We classify these shares as available for sale securities and carry them at fair value in other assets in our condensed consolidated balance sheets, with unrealized gains and losses reported as a component of shareholders’ equity. In performing our periodic evaluation of other than temporary impairment on our investment in Five Star for the second quarter of 2017, we determined that, based upon the length of time and the extent to which the market value of our Five Star investment was below the carrying value of our Five Star investment, the decline in fair value should be deemed to be other than temporary at June 30, 2017. Accordingly, we recorded a loss on impairment of $5,082 to reduce the carrying value of our Five Star investment to its estimated fair value during the second quarter of 2017. We determined the fair value using the closing price of Five Star's common shares on the Nasdaq on June 30, 2017 ($1.50 per share). At September 30, 2017, our Five Star investment had an adjusted cost basis of $6,353 and a fair value of $6,564, resulting in a cumulative unrealized gain of $211 based on Five Star's per share market price at September 30, 2017 ($1.55 per share).

See Notes 6 and 12 for further information regarding our investments in available for sale securities.