Sunstone Hotel Investors (SHO) 10-Q 8 May 18 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 01, 2018
Document and Entity Information
Entity Registrant Name	Sunstone Hotel Investors, Inc.
Entity Central Index Key	1,295,810
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		225,614,712
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q1

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 467,050	$ 488,002
Restricted cash	79,336	71,309
Accounts receivable, net	48,589	34,219
Inventories	1,375	1,323
Prepaid expenses	12,532	10,464
Assets held for sale, net		122,807
Total current assets	608,882	728,124
Investment in hotel properties, net	3,110,887	3,106,066
Deferred financing fees, net	1,045	1,305
Other assets, net	31,971	22,317
Total assets	3,752,785	3,857,812
Current liabilities:
Accounts payable and accrued expenses	34,950	31,810
Accrued payroll and employee benefits	18,174	26,687
Dividends and distributions payable	14,488	133,894
Other current liabilities	43,073	44,502
Current portion of notes payable, net	5,569	5,477
Liabilities of assets held for sale		189
Total current liabilities	116,254	242,559
Notes payable, less current portion, net	975,779	977,282
Capital lease obligations, less current portion	26,854	26,804
Other liabilities	31,041	28,989
Total liabilities	1,149,928	1,275,634
Commitments and contingencies (Note 11)
Equity
Common stock, $0.01 par value, 500,000,000 shares authorized, 225,614,712 shares issued and outstanding at March 31, 2018 and 225,321,660 shares issued and outstanding at December 31, 2017	2,256	2,253
Additional paid in capital	2,677,099	2,679,221
Retained earnings	968,293	932,277
Cumulative dividends and distributions	(1,284,501)	(1,270,013)
Total stockholders' equity	2,553,147	2,533,738
Noncontrolling interest in consolidated joint venture	49,710	48,440
Total equity	2,602,857	2,582,178
Total liabilities and equity	3,752,785	3,857,812
Series E Cumulative Redeemable Preferred Stock
Equity
Cumulative Redeemable Preferred Stock	115,000	115,000
Series F Cumulative Redeemable Preferred Stock
Equity
Cumulative Redeemable Preferred Stock	$ 75,000	$ 75,000

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	225,614,712	225,321,660
Common stock, shares outstanding (in shares)	225,614,712	225,321,660
Series E Cumulative Redeemable Preferred Stock
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent)	6.95%	6.95%
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares)	4,600,000	4,600,000
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares)	4,600,000	4,600,000
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share)	$ 25	$ 25
Series F Cumulative Redeemable Preferred Stock
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent)	6.45%	6.45%
Preferred stock, Cumulative Redeemable Preferred Stock, shares issued (in shares)	3,000,000	3,000,000
Preferred stock, Cumulative Redeemable Preferred Stock, shares outstanding (in shares)	3,000,000	3,000,000
Preferred stock, Cumulative Redeemable Preferred Stock, liquidation preference (in dollars per share)	$ 25	$ 25

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
REVENUES
Room	$ 180,276	$ 190,367
Food and beverage	74,266	75,501
Other operating	16,904	14,875
Total revenues	271,446	280,743
OPERATING EXPENSES
Room	51,095	51,292
Food and beverage	50,154	50,537
Other operating	3,941	3,831
Advertising and promotion	13,906	14,946
Repairs and maintenance	11,103	10,967
Utilities	7,475	7,222
Franchise costs	7,853	8,055
Property tax, ground lease and insurance	21,781	21,287
Other property-level expenses	33,907	34,738
Corporate overhead	7,102	6,779
Depreciation and amortization	36,688	40,807
Total operating expenses	245,005	250,461
Operating income	26,441	30,282
Interest and other income	1,491	721
Interest expense	(8,876)	(11,249)
Loss on extinguishment of debt		(4)
Gain on sale of assets	15,659	44,285
Income before income taxes	34,715	64,035
Income tax benefit (provision), net	3,740	(208)
NET INCOME	38,455	63,827
Income from consolidated joint venture attributable to noncontrolling interest	(2,439)	(1,992)
Preferred stock dividends	(3,207)	(3,207)
INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 32,809	$ 58,628
Basic and diluted per share amounts:
Basic and diluted income attributable to common stockholders per common share (in dollars per share)	$ 0.15	$ 0.27
Basic and diluted weighted average common shares outstanding (in shares)	224,282	219,093
Distributions declared per common share (in dollars per share)	$ 0.05	$ 0.05

CONSOLIDATED STATEMENTS OF EQUI

CONSOLIDATED STATEMENTS OF EQUITY - 3 months ended Mar. 31, 2018 - USD ($)	Series E Cumulative Redeemable Preferred StockPreferred Stock	Series E Cumulative Redeemable Preferred StockCumulative dividends and distributions	Series E Cumulative Redeemable Preferred Stock	Series F Cumulative Redeemable Preferred StockPreferred Stock	Series F Cumulative Redeemable Preferred StockCumulative dividends and distributions	Series F Cumulative Redeemable Preferred Stock	Common Stock	Additional Paid In Capital	Retained Earnings	Cumulative dividends and distributions	Noncontrolling Interest in Consolidated Joint Venture	Total
Beginning Balance at Dec. 31, 2017	$ 115,000,000			$ 75,000,000			$ 2,253,000	$ 2,679,221,000	$ 932,277,000	$ (1,270,013,000)	$ 48,440,000	$ 2,582,178,000
Beginning Balance (in shares) at Dec. 31, 2017	4,600,000			3,000,000			225,321,660
Increase (Decrease) in Stockholders' Equity
Deferred stock compensation, net							$ 3,000	(2,122,000)				(2,119,000)
Deferred stock compensation, net (in shares)							293,052
Common stock distributions and distributions payable										(11,281,000)		(11,281,000)
Preferred stock dividends and dividends payable		$ (1,998,000)	$ (1,998,000)		$ (1,209,000)	$ (1,209,000)
Distributions to noncontrolling interest											(1,169,000)	(1,169,000)
Net income									36,016,000		2,439,000	38,455,000
Ending Balance at Mar. 31, 2018	$ 115,000,000			$ 75,000,000			$ 2,256,000	$ 2,677,099,000	$ 968,293,000	$ (1,284,501,000)	$ 49,710,000	$ 2,602,857,000
Ending Balance (in shares) at Mar. 31, 2018	4,600,000			3,000,000			225,614,712

CONSOLIDATED STATEMENT OF EQUIT

CONSOLIDATED STATEMENT OF EQUITY (Parenthetical)	3 Months Ended
	Mar. 31, 2018$ / shares
Common stock distributions and distributions payable, per share (in dollars per share)	$ 0.05
Series E Cumulative Redeemable Preferred Stock
Preferred stock dividends and dividends payable (in dollars per share)	0.434375
Series F Cumulative Redeemable Preferred Stock
Preferred stock dividends and dividends payable (in dollars per share)	$ 0.403125

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 38,455	$ 63,827
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt expense	82	131
Gain on sale of assets, net	(15,669)	(44,570)
Loss on extinguishment of debt		4
Noncash interest on derivatives and capital lease obligations, net	(3,137)	(657)
Depreciation	36,008	40,150
Amortization of franchise fees and other intangibles	746	819
Amortization of deferred financing fees	747	578
Amortization of deferred stock compensation	2,000	1,749
Deferred income taxes	(3,966)
Changes in operating assets and liabilities:
Accounts receivable	(13,096)	(10,575)
Inventories	(52)	5
Prepaid expenses and other assets	(3,523)	(2,387)
Accounts payable and other liabilities	514	(370)
Accrued payroll and employee benefits	(8,513)	(8,569)
Net cash provided by operating activities	30,596	40,135
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of assets	136,993	123,117
Renovations and additions to hotel properties	(39,321)	(29,872)
Payment for interest rate derivative		(19)
Net cash provided by investing activities	97,672	93,226
CASH FLOWS FROM FINANCING ACTIVITIES
Repurchase of common stock for employee withholding obligations	(4,232)	(3,793)
Proceeds from notes payable		240,000
Payments on notes payable	(1,893)	(178,599)
Payments of deferred financing costs	(5)	(13)
Dividends and distributions paid	(133,894)	(119,847)
Distributions to noncontrolling interest	(1,169)	(2,325)
Net cash used in financing activities	(141,193)	(64,577)
Net (decrease) increase in cash and cash equivalents and restricted cash	(12,925)	68,784
Cash and cash equivalents and restricted cash, beginning of period	559,311	437,460
Cash and cash equivalents and restricted cash, end of period	546,386	506,244
Supplemental Disclosure of Cash Flow Information
Cash and cash equivalents	467,050	441,830
Restricted cash	79,336	64,414
Cash and cash equivalents and restricted cash, end of period	546,386	506,244
Cash paid for interest	13,618	9,632
Cash paid for income taxes	35	38
Supplemental Disclosure of Noncash Investing and Financing Activties
Increase in accounts payable related to renovations and additions to hotel properties and other assets	3,112	2,119
Amortization of deferred stock compensation - construction activities	113	151
Dividends and distributions payable	$ 14,488	$ 14,228

Organization and Description of

Organization and Description of Business	3 Months Ended
	Mar. 31, 2018
Organization and Description of Business
Organization and Description of Business	1. Organization and Description of Business Sunstone Hotel Investors, Inc. (the “Company”) was incorporated in Maryland on June 28, 2004 in anticipation of an initial public offering of common stock, which was consummated on October 26, 2004. The Company, through its 100% controlling interest in Sunstone Hotel Partnership, LLC (the “Operating Partnership”), of which the Company is the sole managing member, and the subsidiaries of the Operating Partnership, including Sunstone Hotel TRS Lessee, Inc. (the “TRS Lessee”) and its subsidiaries, is currently engaged in acquiring, owning, asset managing and renovating hotel properties. The Company may also sell certain hotel properties from time to time. The Company operates as a real estate investment trust (“REIT”) for federal income tax purposes. As a REIT, certain tax laws limit the amount of “non-qualifying” income the Company can earn, including income derived directly from the operation of hotels. The Company leases all of its hotels to its TRS Lessee, which in turn enters into long-term management agreements with third parties to manage the operations of the Company’s hotels, in transactions that are intended to generate qualifying income. As of March 31, 2018, the Company had interests in 25 hotels (the “25 hotels”), and the Company’s third-party managers included the following: Number of Hotels Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) 9 Interstate Hotels & Resorts, Inc. 4 Highgate Hotels L.P. and an affiliate 3 Crestline Hotels & Resorts 2 Hilton Worldwide 2 Hyatt Corporation 2 Davidson Hotels & Resorts 1 HEI Hotels & Resorts 1 Singh Hospitality, LLC 1 Total hotels held for investment 25

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements as of March 31, 2018 and December 31, 2017, and for the three months ended March 31, 2018 and 2017, include the accounts of the Company, the Operating Partnership, the TRS Lessee and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission. In the Company’s opinion, the interim financial statements presented herein reflect all adjustments, consisting solely of normal and recurring adjustments, which are necessary to fairly present the interim financial statements. These financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission on February 14, 2018. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Earnings Per Share The Company applies the two-class method when computing its earnings per share. Net income per share for each class of stock (common stock and convertible preferred stock) is calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and are included in the computation of earnings per share. Basic earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards and the incremental common shares issuable upon the exercise of stock options, using the more dilutive of either the two-class method or the treasury stock method. The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Numerator: Net income $ 38,455 $ 63,827 Income from consolidated joint venture attributable to noncontrolling interest (2,439) (1,992) Preferred stock dividends (3,207) (3,207) Distributions paid on unvested restricted stock compensation (59) (60) Undistributed income allocated to unvested restricted stock compensation (117) (248) Numerator for basic and diluted income attributable to common stockholders $ 32,633 $ 58,320 Denominator: Weighted average basic and diluted common shares outstanding 224,282 219,093 Basic and diluted income attributable to common stockholders per common share $ 0.15 $ 0.27 The Company’s unvested restricted shares associated with its long-term incentive plan and shares associated with common stock options have been excluded from the above calculation of earnings per share for the three months ended March 31, 2018 and 2017, as their inclusion would have been anti-dilutive. New Accounting Standards and Accounting Changes In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASU No. 2014-09”). The core principle of ASU No. 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity applies a five-step model: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. In March 2016, the FASB clarified the principal versus agent guidance in ASU No. 2014-09 with its issuance of Accounting Standards Update No. 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” (“ASU No. 2016-08”). In particular, ASU No. 2016-08 clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions by explaining what a principal controls before the specified good or service is transferred to the customer. In addition, ASU No. 2016-08 reframes the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In May 2016, the FASB amended ASU No. 2014-09’s guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes with its issuance of Accounting Standards Update No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ” (“ASU No. 2016-12”). The amendments clarify that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. This clarification is important because entities that use the modified retrospective transition approach need to apply the standard only to contracts that are not complete as of the date of initial application, and entities that use the full retrospective approach may apply certain practical expedients to completed contracts. In addition, ASU No. 2016-12 clarifies that an entity should consider the probability of collecting substantially all of the consideration to which it will be entitled in exchange for goods and services expected to be transferred to the customer rather than the total amount promised for all the goods or services in the contract. ASU No. 2016-12 also clarifies that an entity may consider its ability to manage its exposure to credit risk as part of the collectability assessment, as well as that the fair value of noncash consideration should be measured at contract inception when determining the transaction price. Finally, ASU No. 2016-12 allows an entity to make an accounting policy election to exclude from the transaction price certain types of taxes collected from a customer if it discloses that policy. The Company adopted ASU No. 2014-09, along with the related clarifications and amendments in ASU No. 2016-08 and ASU No. 2016-12, in January 2018, using the modified retrospective approach to contracts that were not complete as of January 1, 2018. Due to the short-term nature of the Company’s revenue streams, the adoption of ASU No. 2014-09 did not have a material impact on the amount and timing of revenue recognized from rooms, food and beverage and other ancillary hotel services . In addition, the Company determined that presenting its revenue streams disaggregated into the categories of rooms, food and beverage, and other on its consolidated statements of operations depicts how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors, and that no further disaggregation is needed. See Revenue Recognition in Note 2 for additional disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “ Leases (Topic 842) ” (“ASU No. 2016-02”), which will require lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to today’s accounting. A lessee will be required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similarly to existing guidance for operating leases today. ASU No. 2016-02 also eliminates today’s real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and requires lessors to identify lease and non-lease components under their leasing arrangements and to allocate the total consideration in the lease agreement to these lease and non-lease components based on their relative standalone selling prices. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. ASU No. 2016-02 will become effective during the first quarter of 2019, and will require a modified retrospective approach for leases that exist or are entered into after the date of initial application, with an option to use certain transition relief. In January 2018, the FASB issued a proposed amendment to ASU No. 2016-02 which would add a transition option to the new leases standard that would allow entities to apply the transition provisions of the new standard at its adoption date instead of the earliest comparative period presented in its financial statements. The FASB also proposed a practical expedient that would permit lessors to not separate lease and non-lease components if certain conditions are met. The Company is creating an inventory of its leases and is analyzing its current ground lease obligations. In addition, the Company is evaluating the impact that ASU No. 2016-02, as well as the FASB’s proposed transition option and practical expedient if adopted, will have on its consolidated financial statements, and, other than the inclusion of operating leases on the Company’s balance sheet, such effects have not yet been determined. In January 2018, the FASB issued Accounting Standards Update No. 2018-01, “ Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 ” (“ASU No. 2018-01”), which clarifies, among other things, that perpetual easements are not leases because they do not convey the right to use the underlying land for a period of time. The Company has a perpetual easement agreement at the Hilton Times Square, which, under the guidance of ASU No. 2018-01, will not be considered a lease and will continue to be an intangible asset with an indefinite useful life. ASU No. 2018-01 will become effective, along with ASU No. 2016-02, during the first quarter of 2019. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) ” (“ASU No. 2016-18”), which requires entities to show the changes in total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the guidance requires a reconciliation of the totals in the statement of cash flows to the related caption in the balance sheet. The Company adopted ASU No. 2016-18 in January 2018. As a result, amounts included in restricted cash on the Company’s consolidated balance sheet are included with cash and cash equivalents on the consolidated statement of cash flows. A reconciliation of the totals in the statement of cash flows to the related caption in the balance sheet has been added as a supplemental disclosure to the Company’s consolidated statements of cash flow. The adoption of this standard did not change the Company’s balance sheet presentation. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, “ Business Combinations (Topic 805): Clarifying the Definition of a Business ” (“ASU No. 2017-01”), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of transferred assets and activities is not a business. If it is not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The Company adopted ASU No. 2017-01 in January 2018. The Company will analyze future hotel acquisitions and sales to determine if the transaction qualifies as the purchase or disposition of a business or an asset. Transaction costs associated with asset acquisitions will be capitalized, while the same costs associated with a business combination will continue to be expensed as incurred. In addition, asset acquisitions will not be subject to a measurement period, as are business combinations. Depending on the Company’s conclusion, ASU No. 2017-01 may have an effect on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “ Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU No. 2017-04”), which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of today’s goodwill impairment test) to measure a goodwill impairment charge. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard does not change the guidance on completing Step 1 of the goodwill impairment test. An entity will still be able to perform today’s optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. ASU No. 2017-04 will become effective in the first quarter of 2019, with early adoption permitted, and the guidance is to be applied prospectively. The Company elected to early adopt ASU No. 2017-04 in January 2018, with no material impact on its consolidated financial statements. In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “ Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting ” (“ASU No. 2017-09”), which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications, but it does not change the accounting for modifications. Under ASU No. 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: the award’s fair value (or calculated or intrinsic value, if those measurement methods are used); the award’s vesting conditions; and the award’s classification as an equity or liability instrument. The Company adopted ASU No. 2017-09 in January 2018 with no impact to its consolidated financial statements. Noncontrolling Interest The Company’s consolidated financial statements include an entity in which the Company has a controlling financial interest. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interest is reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from the less-than-wholly owned subsidiary is reported at the consolidated amount, including both the amounts attributable to the Company and the noncontrolling interest. Income or loss is allocated to the noncontrolling interest based on its weighted average ownership percentage for the applicable period. The consolidated statement of equity includes beginning balances, activity for the period and ending balances for each component of stockholders’ equity, noncontrolling interest and total equity. At both March 31, 2018 and December 31, 2017, the noncontrolling interest reported in the Company’s financial statements included a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront. Property and Equipment Impairment losses are recorded on long-lived assets to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows expected to be generated by those assets, based on the Company’s expected investment horizon, are less than the assets’ carrying amount. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment is recognized. The impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. In computing fair value, the Company uses a discounted cash flow analysis to estimate the fair value of its hotel properties, taking into account each property’s expected cash flow from operations and estimated proceeds from the disposition of the property. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to hotel guests, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Room revenue is recognized over a guest’s stay at a previously agreed upon daily rate. Additionally, some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is booked by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is booked by the Company on a gross basis. A majority of the Company’s hotels participate in frequent guest programs sponsored by the hotel brand owners whereby the hotel allows guests to earn loyalty points during their hotel stay. The Company expenses charges associated with these programs as incurred, and recognizes revenue at the amount it will receive from the brand when a guest redeems their loyalty points by staying at one of the Company’s hotels. In addition, some contracts for rooms or food and beverage services require an advance deposit, which the Company records as deferred revenue (or a contract liability) and recognizes once the performance obligations are satisfied. Food and beverage revenue and other ancillary services revenue are generated when a customer chooses to purchase goods or services separately from a hotel room. These revenue streams are recognized during the time the goods or services are provided to the customer at the amount the Company expects to be entitled to in exchange for those goods or services. For those ancillary services provided by third parties, the Company assesses whether it is the principal or the agent. If the Company is the principal, revenue is recognized based upon the gross sales price. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. Additionally, the Company collects sales, use, occupancy and other similar taxes at its hotels, which the Company presents on a net basis (excluded from revenues) in its consolidated statements of operations. Trade receivables and contract liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Trade receivables, net (1) $ 27,808 $ 20,773 Contract liabilities (2) $ 15,197 $ 13,454 (1) Trade receivables are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits, and are included in other current liabilities on the accompanying consolidated balance sheets. Segment Reporting The Company considers each of its hotels to be an operating segment, none of which meets the threshold for a separate reportable segment. Currently, the Company operates in one reportable segment, hotel ownership.

Investment in Hotel Properties

Investment in Hotel Properties	3 Months Ended
	Mar. 31, 2018
Investment in Hotel Properties
Investment in Hotel Properties	3. Investment in Hotel Properties Investment in hotel properties, net consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Land $ 605,054 $ 605,054 Buildings and improvements 3,067,473 3,049,569 Furniture, fixtures and equipment 496,492 484,749 Intangible assets 48,251 48,371 Franchise fees 980 980 Construction in process 66,134 54,280 Investment in hotel properties, gross 4,284,384 4,243,003 Accumulated depreciation and amortization (1,173,497) (1,136,937) Investment in hotel properties, net $ 3,110,887 $ 3,106,066

Disposals

Disposals	3 Months Ended
	Mar. 31, 2018
Disposals
Disposals	4. Disposals In January 2018, the Company sold the Marriott Philadelphia and the Marriott Quincy, located in Pennsylvania and Massachusetts, respectively, for net proceeds of $137.0 million. The Company recognized a net gain on the sale of $15.7 million. Neither of these sales qualified as a disposition of a business. In addition, neither sale represented a strategic shift that had a major impact on the Company’s business plan or its primary markets; therefore, neither of these sales qualified as a discontinued operation. The Company classified the assets and liabilities of both hotels as held for sale as of December 31, 2017 as follows (in thousands): December 31, 2017 Accounts receivable $ 1,676 Prepaid expenses 193 Investment in hotel properties, net 120,916 Other assets 22 Assets held for sale, net $ 122,807 Accounts payable and accrued expenses $ 69 Other current liabilities 41 Other liabilities 79 Liabilities of assets held for sale $ 189 The following table provides summary results of operations for the Marriott Philadelphia and the Marriott Quincy, along with the Fairmont Newport Beach and the Marriott Park City, both of which were sold in 2017, which are included in continuing operations for their respective ownership periods (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Revenues $ 603 $ 18,344 Income before income taxes $ (943) $ 2,621 Gain on sale of assets $ 15,659 $ 44,285

Fair Value Measurements and Int

Fair Value Measurements and Interest Rate Derivatives	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements and Interest Rate Derivatives
Fair Value Measurements and Interest Rate Derivatives	5. Fair Value Measurements and Interest Rate Derivatives Fair Value of Financial Instruments As of March 31, 2018 and December 31, 2017, the carrying amount of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses were representative of their fair values due to the short-term maturity of these instruments. A fair value measurement is based on the assumptions that market participants would use in pricing an asset or liability in an orderly transaction. The hierarchy for inputs used in measuring fair value is as follows: Level 1 Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or the liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available. As of March 31, 2018 and December 31, 2017, the only financial instruments that the Company measures at fair value on recurring bases are its interest rate derivatives, along with a life insurance policy and a related retirement benefit agreement. The Company estimates the fair value of its interest rate derivatives using Level 2 measurements based on quotes obtained from the counterparties, which are based upon the consideration that would be required to terminate the agreements. Both the life insurance policy and the related retirement benefit agreement, which are for a former Company associate, are valued using Level 2 measurements. The following table presents the Company’s assets measured at fair value on a recurring and nonrecurring basis at March 31, 2018 and December 31, 2017 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 March 31, 2018 (unaudited): Interest rate cap derivatives $ 15 $ — $ 15 $ — Interest rate swap derivatives 6,566 — 6,566 — Life insurance policy (1) 632 — 632 — Total assets measured at fair value at March 31, 2018 $ 7,213 $ — $ 7,213 $ — December 31, 2017: Houston hotels, net $ 34,473 $ — — $ 34,473 Interest rate cap derivatives 4 — 4 — Interest rate swap derivatives 3,390 — 3,390 — Life insurance policy (1) 645 — 645 — Total assets measured at fair value at December 31, 2017 $ 38,512 $ — $ 4,039 $ 34,473 (1) Includes the split life insurance policy for a former Company associate. These amounts are included in other assets, net on the accompanying consolidated balance sheets, and will be used to reimburse the Company for payments made to the former associate from the related retirement benefit agreement, which is included in accrued payroll and employee benefits on the accompanying consolidated balance sheets. The following table presents the Company’s liabilities measured at fair value on a recurring and nonrecurring basis at March 31, 2018 and December 31, 2017 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 March 31, 2018 (unaudited): Retirement benefit agreement (1) $ 632 $ — $ 632 $ — Total liabilities measured at fair value at March 31, 2018 $ 632 $ — $ 632 $ — December 31, 2017: Retirement benefit agreement (1) $ 645 $ — $ 645 $ — Total liabilities measured at fair value at December 31, 2017 $ 645 $ — $ 645 $ — (1) Includes the retirement benefit agreement for a former Company associate. The agreement calls for the balance of the retirement benefit to be paid out to the former associate in ten annual installments, beginning in 2011. The Company has paid the former associate a total of $1.4 million through March 31, 2018, which was reimbursed to the Company using funds from the related split life insurance policy noted above. These amounts are included in accrued payroll and employee benefits on the accompanying consolidated balance sheets. Interest Rate Derivatives The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following at March 31, 2018 (unaudited) and December 31, 2017 (in thousands): Estimated Fair Value Asset Strike / Capped Effective Maturity Notional March 31, December 31, Hedged Debt Type Rate Index Date Date Amount 2018 2017 Hilton San Diego Bayfront (1) Cap 4.250 % 1-Month LIBOR May 1, 2017 May 1, 2019 $ 109,261 $ 5 $ — Hilton San Diego Bayfront (1) Cap 6.000 % 1-Month LIBOR November 10, 2017 December 9, 2020 $ 220,000 10 4 $85.0 million term loan (2) Swap 3.391 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ 85,000 3,380 2,010 $100.0 million term loan (3) Swap 3.653 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 3,186 1,380 $ 6,581 $ 3,394 (1) In November 2017, the Company refinanced the existing loan secured by the Hilton San Diego Bayfront. Coterminous with the loan refinance, the Company purchased a new interest rate cap agreement with a strike rate of 6.0% and an expiration date in December 2020. The fair values of both Hilton San Diego Bayfront cap agreements are included in other assets, net on the accompanying consolidated balance sheets as of both March 31, 2018 and December 31, 2017. (2) The fair value of the $85.0 million term loan swap agreement is included in other assets, net on the Company’s consolidated balance sheets as of both March 31, 2018 and December 31, 2017. The 1-month LIBOR rate was swapped to a fixed rate of 1.591%. (3) The fair value of the $100.0 million term loan swap agreement is included in other assets, net on the Company’s consolidated balance sheets as of both March 31, 2018 and December 31, 2017. The 1-month LIBOR rate was swapped to a fixed rate of 1.853%. Noncash changes in the fair values of the Company’s interest rate derivatives resulted in decreases to interest expense for the three months ended March 31, 2018 and 2017 as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Noncash interest on derivatives $ (3,187) $ (657) Fair Value of Debt As of March 31, 2018 and December 31, 2017, 77.7% and 77.8%, respectively, of the Company’s outstanding debt had fixed interest rates, including the effects of interest rate swap agreements. The Company uses Level 3 measurements to estimate the fair value of its debt by discounting the future cash flows of each instrument at estimated market rates. The Company’s principal balances and fair market values of its consolidated debt as of March 31, 2018 (unaudited) and December 31, 2017 were as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value Debt $ 988,510 $ 994,789 $ 990,402 $ 997,922 (1) The principal balance of debt is presented before any unamortized deferred financing fees.

Other Assets

Other Assets	3 Months Ended
	Mar. 31, 2018
Other Assets
Other Assets	6. Other Assets Other assets, net consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Property and equipment, net $ 1,869 $ 584 Goodwill 990 990 Deferred expense on straight-lined third-party tenant leases 3,304 3,351 Deferred income tax asset 13,431 9,492 Interest rate derivatives 6,581 3,394 Other receivables 4,579 3,136 Other 1,217 1,370 Total other assets, net $ 31,971 $ 22,317 During the first quarter of 2018, the Company recognized a $3.9 million income tax benefit associated with an increase in its deferred tax assets primarily related to net operating losses realized in the first quarter due to the seasonality of the Company’s earnings.

Notes Payable

Notes Payable	3 Months Ended
	Mar. 31, 2018
Notes Payable
Notes Payable	7. Notes Payable Notes payable consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Notes payable requiring payments of interest and principal, with fixed rates ranging from 4.12% to 5.95%; maturing at dates ranging from November 2020 through January 2025. The notes are collateralized by first deeds of trust on four hotel properties at both March 31, 2018 and December 31, 2017. $ 343,510 $ 345,402 Note payable requiring payments of interest only, bearing a blended rate of one-month LIBOR plus 105 basis points; maturing in December 2020 with three one-year extensions. The note is collateralized by a first deed of trust on one hotel property. 220,000 220,000 Unsecured term loan requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 180 to 255 basis points over LIBOR, depending on the Company's leverage ratios. LIBOR has been swapped to a fixed rate of 1.591%, resulting in an effective interest rate of 3.391% based on the Company's current leverage. Matures in September 2022. 85,000 85,000 Unsecured term loan requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 180 to 255 basis points over LIBOR, depending on the Company's leverage ratios. LIBOR has been swapped to a fixed rate of 1.853%, resulting in an effective interest rate of 3.653% based on the Company's current leverage. Matures in January 2023. 100,000 100,000 Unsecured Senior Notes requiring semi-annual payments of interest only, bearing interest at 4.69%; maturing in January 2026. 120,000 120,000 Unsecured Senior Notes requiring semi-annual payments of interest only, bearing interest at 4.79%; maturing in January 2028. 120,000 120,000 Total notes payable $ 988,510 $ 990,402 Current portion of notes payable $ 7,514 $ 7,420 Less: current portion of deferred financing fees (1,945) (1,943) Carrying value of current portion of notes payable $ 5,569 $ 5,477 Notes payable, less current portion $ 980,996 $ 982,982 Less: long-term portion of deferred financing fees (5,217) (5,700) Carrying value of notes payable, less current portion $ 975,779 $ 977,282 Interest Expense Total interest incurred and expensed on the notes payable was as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Interest expense on debt and capital lease obligations $ 11,266 $ 11,328 Noncash interest on derivatives and capital lease obligations, net (3,137) (657) Amortization of deferred financing fees 747 578 Total interest expense $ 8,876 $ 11,249

Other Current Liabilities and O

Other Current Liabilities and Other Liabilities	3 Months Ended
	Mar. 31, 2018
Other Current Liabilities and Other Liabilities
Other Current Liabilities and Other Liabilities	8. Other Current Liabilities and Other Liabilities Other current liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Property, sales and use taxes payable $ 17,287 $ 17,842 Income tax payable 351 160 Accrued interest 4,256 6,746 Advance deposits 15,197 13,454 Management fees payable 1,562 1,952 Other 4,420 4,348 Total other current liabilities $ 43,073 $ 44,502 Other liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Deferred revenue $ 5,485 $ 5,589 Deferred rent 21,452 19,582 Deferred income tax liability 230 257 Other 3,874 3,561 Total other liabilities $ 31,041 $ 28,989

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Mar. 31, 2018
Stockholders' Equity
Stockholders' Equity	9. Stockholders’ Equity Series E Cumulative Redeemable Preferred Stock In March 2016, the Company issued 4,600,000 shares of its 6.95% Series E Cumulative Redeemable Preferred Stock (“Series E preferred stock”) with a liquidation preference of $25.00 per share for gross proceeds of $115.0 million. In conjunction with the offering, the Company incurred $4.0 million in preferred offering costs. On or after March 11, 2021, the Series E preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a change of control, as defined by the Articles Supplementary for Series E preferred stock, holders of the Series E preferred stock may, under certain circumstances, convert their preferred shares into shares of the Company’s common stock. Series F Cumulative Redeemable Preferred Stock In May 2016, the Company issued 3,000,000 shares of its 6.45% Series F Cumulative Redeemable Preferred Stock (“Series F preferred stock”) with a liquidation preference of $25.00 per share for gross proceeds of $75.0 million. In conjunction with the offering, the Company incurred $2.6 million in preferred offering costs. On or after May 17, 2021, the Series F preferred stock will be redeemable at the Company’s option, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, but not including, the redemption date. Upon the occurrence of a change of control, as defined by the Articles Supplementary for Series F preferred stock, holders of the Series F preferred stock may, under certain circumstances, convert their preferred shares into shares of the Company’s common stock. Common Stock In February 2017, the Company entered into separate “At the Market” Agreements (the “ATM Agreements”) with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC and Wells Fargo Securities, LLC . In accordance with the terms of the ATM Agreements, the Company may from time to time offer and sell shares of its common stock having an aggregate offering price of up to $300.0 million. Through March 31, 2018, the Company has received gross proceeds of $79.4 million, and paid $1.5 million in costs, from the issuance of 4,876,855 shares of its common stock in connection with the ATM Agreements. As of March 31, 2018, the Company has $220.6 million available for sale under the ATM Agreements. In February 2017, the Company’s board of directors authorized a share repurchase plan to acquire up to $300.0 million of the Company’s common and preferred stock. As of March 31, 2018, no shares of either the Company’s common or preferred stock have been repurchased. Future purchases will depend on various factors, including the Company’s capital needs, as well as the Company’s common and preferred stock price.

Long-Term Incentive Plan

Long-Term Incentive Plan	3 Months Ended
	Mar. 31, 2018
Long-Term Incentive Plan
Long-Term Incentive Plan	10. Long-Term Incentive Plan Stock Grants Restricted shares granted pursuant to the Company’s Long-Term Incentive Plan generally vest over periods from three to four years from the date of grant. Compensation expense related to awards of restricted shares are measured at fair value on the date of grant and amortized over the relevant requisite service period or derived service period. The Company has elected to account for forfeitures as they occur. The Company’s amortization expense and forfeitures related to restricted shares for the three months ended March 31, 2018 and 2017 were as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Amortization expense, including forfeitures $ 2,000 $ 1,749 In addition, the Company capitalizes compensation costs related to all restricted shares granted to certain employees whose work is directly related to the Company’s capital investment in its hotels. These capitalized costs totaled $0.1 million and $0.2 million during the three months ended March 31, 2018 and 2017, respectively. Stock Options In April 2008, the Compensation Committee of the Company’s board of directors approved a grant of 200,000 non-qualified stock options (the “Options”) to one of the Company’s former associates. The Options fully vested in April 2009, and expired on April 27, 2018. The Options were not exercised prior to their expiration date.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Management Agreements Management agreements with the Company’s third-party hotel managers require the Company to pay between 1.75% and 3.5% of total revenue of the managed hotels to the third-party managers each month as a basic management fee. In addition to basic management fees, provided that certain operating thresholds are met, the Company may also be required to pay incentive management fees to certain of its third-party managers. Total basic management fees, net of key money incentives received from third-party hotel managers, along with incentive management fees incurred by the Company during the three months ended March 31, 2018 and 2017 were included in other property-level expenses on the Company’s consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Basic management fees $ 7,534 $ 7,895 Incentive management fees 2,720 2,553 Total basic and incentive management fees $ 10,254 $ 10,448 License and Franchise Agreements The Company has entered into license and franchise agreements related to certain of its hotel properties. The license and franchise agreements require the Company to, among other things, pay monthly fees that are calculated based on specified percentages of certain revenues. The license and franchise agreements generally contain specific standards for, and restrictions and limitations on, the operation and maintenance of the hotels which are established by the franchisors to maintain uniformity in the system created by each such franchisor. Such standards generally regulate the appearance of the hotel, quality and type of goods and services offered, signage and protection of trademarks. Compliance with such standards may from time to time require the Company to make significant expenditures for capital improvements. Total license and franchise fees incurred by the Company during the three months ended March 31, 2018 and 2017 were included in franchise costs on the Company’s consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Franchise assessments (1) $ 5,908 $ 5,927 Franchise royalties 1,945 2,128 Total franchise costs $ 7,853 $ 8,055 (1) Includes advertising, reservation and frequent guest program assessments. Renovation and Construction Commitments At March 31, 2018, the Company had various contracts outstanding with third parties in connection with the renovation and repositioning of certain of its hotel properties. The remaining commitments under these contracts at March 31, 2018 totaled $78.5 million. Capital Leases The Hyatt Centric Chicago Magnificent Mile is subject to a building lease which expires in December 2097. The Company evaluated the terms of the lease agreement and determined the lease to be a capital lease. The Company determined that the ground lease at the Courtyard by Marriott Los Angeles is a capital lease due to the lease containing a future bargain purchase right option, which the Company will likely exercise as the economic disincentive for continuing to lease the property will be significant. The capital lease assets were included in investment in hotel properties, net on the Company’s consolidated balance sheets as follows (in thousands): March 31, December 31, 2018 2017 (unaudited) Gross capital lease asset - buildings and improvements $ 58,799 $ 58,799 Gross capital lease asset - land 6,605 6,605 Gross capital lease assets 65,404 65,404 Accumulated depreciation (8,575) (8,208) Net capital lease assets $ 56,829 $ 57,196 Ground, Building and Air Leases Total rent expense incurred pursuant to ground, building and air lease agreements for the three months ended March 31, 2018 and 2017 was included in property tax, ground lease and insurance on the Company’s consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Minimum rent, including straight-line adjustments $ 2,130 $ 2,340 Percentage rent (1) 1,744 1,585 Total $ 3,874 $ 3,925 (1) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds. Rent expense incurred pursuant to leases on the corporate facility which expire in August 2018, along with straight-line adjustments for a new office space lease for which the Company has taken possession totaled $0.2 million for the three months ended March 31, 2018. For the three months ended March 31, 2017, the Company incurred rent expense of $0.1 million pursuant to leases on the corporate facility. The Company includes its corporate rent expense in corporate overhead expense on its consolidated statements of operations. Concentration of Risk The concentration of the Company’s hotels in California, Hawaii, Illinois, Massachusetts, the greater Washington DC area and Florida exposes the Company’s business to economic and severe weather conditions, competition and real and personal property tax rates unique to these locales. As of March 31, 2018, 18 of the Company’s 25 hotels were geographically concentrated as follows: Trailing 12-Month Percentage of Total Number of Hotels Total Rooms Consolidated Revenue (unaudited) (unaudited) (unaudited) California 7 31 % 35 % Hawaii 1 4 % 8 % Illinois 3 9 % 7 % Massachusetts 2 12 % 13 % Greater Washington DC area 3 15 % 13 % Florida 2 8 % 8 % Other The Company has provided customary unsecured environmental indemnities to certain lenders. The Company has performed due diligence on the potential environmental risks, including obtaining an independent environmental review from outside environmental consultants. These indemnities obligate the Company to reimburse the indemnified parties for damages related to certain environmental matters. There is no term or damage limitation on these indemnities; however, if an environmental matter arises, the Company could have recourse against other previous owners or a claim against its environmental insurance policies. At March 31, 2018, the Company had $0.5 million of outstanding irrevocable letters of credit to guarantee the Company’s financial obligations related to workers’ compensation insurance programs from prior policy years. The beneficiaries of these letters of credit may draw upon these letters of credit in the event of a contractual default by the Company relating to each respective obligation. No draws have been made through March 31, 2018. The Company is subject to various claims, lawsuits and legal proceedings, including routine litigation arising in the ordinary course of business, regarding the operation of its hotels and Company matters. While it is not possible to ascertain the ultimate outcome of such matters, the Company believes that the aggregate amount of such liabilities, if any, in excess of amounts covered by insurance will not have a material adverse impact on its financial condition or results of operations. The outcome of claims, lawsuits and legal proceedings brought against the Company, however, is subject to significant uncertainties.

Summary of Significant Accoun19

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements as of March 31, 2018 and December 31, 2017, and for the three months ended March 31, 2018 and 2017, include the accounts of the Company, the Operating Partnership, the TRS Lessee and their controlled subsidiaries. All significant intercompany balances and transactions have been eliminated. If the Company determines that it has an interest in a variable interest entity, the Company will consolidate the entity when it is determined to be the primary beneficiary of the entity. The accompanying interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and in conformity with the rules and regulations of the Securities and Exchange Commission. In the Company’s opinion, the interim financial statements presented herein reflect all adjustments, consisting solely of normal and recurring adjustments, which are necessary to fairly present the interim financial statements. These financial statements should be read in conjunction with the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission on February 14, 2018. Operating results for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. The Company does not have any comprehensive income other than what is included in net income. If the Company has any comprehensive income in the future such that a statement of comprehensive income would be necessary, the Company will include such statement in one continuous consolidated statement of operations. The Company has evaluated subsequent events through the date of issuance of these financial statements.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates.
Earnings Per Share	Earnings Per Share The Company applies the two-class method when computing its earnings per share. Net income per share for each class of stock (common stock and convertible preferred stock) is calculated assuming all of the Company’s net income is distributed as dividends to each class of stock based on their contractual rights. Unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are considered participating securities and are included in the computation of earnings per share. Basic earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) attributable to common stockholders per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive. Potential common shares consist of unvested restricted stock awards and the incremental common shares issuable upon the exercise of stock options, using the more dilutive of either the two-class method or the treasury stock method. The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Numerator: Net income $ 38,455 $ 63,827 Income from consolidated joint venture attributable to noncontrolling interest (2,439) (1,992) Preferred stock dividends (3,207) (3,207) Distributions paid on unvested restricted stock compensation (59) (60) Undistributed income allocated to unvested restricted stock compensation (117) (248) Numerator for basic and diluted income attributable to common stockholders $ 32,633 $ 58,320 Denominator: Weighted average basic and diluted common shares outstanding 224,282 219,093 Basic and diluted income attributable to common stockholders per common share $ 0.15 $ 0.27 The Company’s unvested restricted shares associated with its long-term incentive plan and shares associated with common stock options have been excluded from the above calculation of earnings per share for the three months ended March 31, 2018 and 2017, as their inclusion would have been anti-dilutive.
New Accounting Standards and Accounting Changes	New Accounting Standards and Accounting Changes In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “ Revenue from Contracts with Customers (Topic 606) ” (“ASU No. 2014-09”). The core principle of ASU No. 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity applies a five-step model: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. In March 2016, the FASB clarified the principal versus agent guidance in ASU No. 2014-09 with its issuance of Accounting Standards Update No. 2016-08, “ Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) ” (“ASU No. 2016-08”). In particular, ASU No. 2016-08 clarifies how an entity should identify the unit of accounting for the principal versus agent evaluation and how it should apply the control principle to certain types of arrangements, such as service transactions by explaining what a principal controls before the specified good or service is transferred to the customer. In addition, ASU No. 2016-08 reframes the indicators to focus on evidence that an entity is acting as a principal rather than as an agent. In May 2016, the FASB amended ASU No. 2014-09’s guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes with its issuance of Accounting Standards Update No. 2016-12, “ Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients ” (“ASU No. 2016-12”). The amendments clarify that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. This clarification is important because entities that use the modified retrospective transition approach need to apply the standard only to contracts that are not complete as of the date of initial application, and entities that use the full retrospective approach may apply certain practical expedients to completed contracts. In addition, ASU No. 2016-12 clarifies that an entity should consider the probability of collecting substantially all of the consideration to which it will be entitled in exchange for goods and services expected to be transferred to the customer rather than the total amount promised for all the goods or services in the contract. ASU No. 2016-12 also clarifies that an entity may consider its ability to manage its exposure to credit risk as part of the collectability assessment, as well as that the fair value of noncash consideration should be measured at contract inception when determining the transaction price. Finally, ASU No. 2016-12 allows an entity to make an accounting policy election to exclude from the transaction price certain types of taxes collected from a customer if it discloses that policy. The Company adopted ASU No. 2014-09, along with the related clarifications and amendments in ASU No. 2016-08 and ASU No. 2016-12, in January 2018, using the modified retrospective approach to contracts that were not complete as of January 1, 2018. Due to the short-term nature of the Company’s revenue streams, the adoption of ASU No. 2014-09 did not have a material impact on the amount and timing of revenue recognized from rooms, food and beverage and other ancillary hotel services . In addition, the Company determined that presenting its revenue streams disaggregated into the categories of rooms, food and beverage, and other on its consolidated statements of operations depicts how the nature, timing and uncertainty of revenue and cash flows are affected by economic factors, and that no further disaggregation is needed. See Revenue Recognition in Note 2 for additional disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, “ Leases (Topic 842) ” (“ASU No. 2016-02”), which will require lessees to put most leases on their balance sheets but recognize expenses in the income statement in a manner similar to today’s accounting. A lessee will be required to record a right-of-use asset and a lease liability for all leases with a term greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similarly to existing guidance for operating leases today. ASU No. 2016-02 also eliminates today’s real estate-specific provisions and changes the guidance on sale-leaseback transactions, initial direct costs and lease executory costs for all entities. For lessors, the standard modifies the classification criteria and requires lessors to identify lease and non-lease components under their leasing arrangements and to allocate the total consideration in the lease agreement to these lease and non-lease components based on their relative standalone selling prices. All entities will classify leases to determine how to recognize lease-related revenue and expense. Classification will continue to affect amounts that lessors record on the balance sheet. ASU No. 2016-02 will become effective during the first quarter of 2019, and will require a modified retrospective approach for leases that exist or are entered into after the date of initial application, with an option to use certain transition relief. In January 2018, the FASB issued a proposed amendment to ASU No. 2016-02 which would add a transition option to the new leases standard that would allow entities to apply the transition provisions of the new standard at its adoption date instead of the earliest comparative period presented in its financial statements. The FASB also proposed a practical expedient that would permit lessors to not separate lease and non-lease components if certain conditions are met. The Company is creating an inventory of its leases and is analyzing its current ground lease obligations. In addition, the Company is evaluating the impact that ASU No. 2016-02, as well as the FASB’s proposed transition option and practical expedient if adopted, will have on its consolidated financial statements, and, other than the inclusion of operating leases on the Company’s balance sheet, such effects have not yet been determined. In January 2018, the FASB issued Accounting Standards Update No. 2018-01, “ Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 ” (“ASU No. 2018-01”), which clarifies, among other things, that perpetual easements are not leases because they do not convey the right to use the underlying land for a period of time. The Company has a perpetual easement agreement at the Hilton Times Square, which, under the guidance of ASU No. 2018-01, will not be considered a lease and will continue to be an intangible asset with an indefinite useful life. ASU No. 2018-01 will become effective, along with ASU No. 2016-02, during the first quarter of 2019. In November 2016, the FASB issued Accounting Standards Update No. 2016-18, “ Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force) ” (“ASU No. 2016-18”), which requires entities to show the changes in total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the guidance requires a reconciliation of the totals in the statement of cash flows to the related caption in the balance sheet. The Company adopted ASU No. 2016-18 in January 2018. As a result, amounts included in restricted cash on the Company’s consolidated balance sheet are included with cash and cash equivalents on the consolidated statement of cash flows. A reconciliation of the totals in the statement of cash flows to the related caption in the balance sheet has been added as a supplemental disclosure to the Company’s consolidated statements of cash flow. The adoption of this standard did not change the Company’s balance sheet presentation. In January 2017, the FASB issued Accounting Standards Update No. 2017-01, “ Business Combinations (Topic 805): Clarifying the Definition of a Business ” (“ASU No. 2017-01”), which changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. Under the new guidance, an entity first determines whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the set of transferred assets and activities is not a business. If it is not met, the entity then evaluates whether the set meets the requirement that a business include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. The Company adopted ASU No. 2017-01 in January 2018. The Company will analyze future hotel acquisitions and sales to determine if the transaction qualifies as the purchase or disposition of a business or an asset. Transaction costs associated with asset acquisitions will be capitalized, while the same costs associated with a business combination will continue to be expensed as incurred. In addition, asset acquisitions will not be subject to a measurement period, as are business combinations. Depending on the Company’s conclusion, ASU No. 2017-01 may have an effect on its consolidated financial statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04, “ Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ” (“ASU No. 2017-04”), which eliminates the requirement to calculate the implied fair value of goodwill (i.e., Step 2 of today’s goodwill impairment test) to measure a goodwill impairment charge. Under the new guidance, if a reporting unit’s carrying amount exceeds its fair value, an entity will record an impairment charge based on that difference. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard does not change the guidance on completing Step 1 of the goodwill impairment test. An entity will still be able to perform today’s optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. ASU No. 2017-04 will become effective in the first quarter of 2019, with early adoption permitted, and the guidance is to be applied prospectively. The Company elected to early adopt ASU No. 2017-04 in January 2018, with no material impact on its consolidated financial statements. In May 2017, the FASB issued Accounting Standards Update No. 2017-09, “ Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting ” (“ASU No. 2017-09”), which clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The new guidance will allow companies to make certain changes to awards without accounting for them as modifications, but it does not change the accounting for modifications. Under ASU No. 2017-09, an entity will not apply modification accounting to a share-based payment award if all of the following are the same immediately before and after the change: the award’s fair value (or calculated or intrinsic value, if those measurement methods are used); the award’s vesting conditions; and the award’s classification as an equity or liability instrument. The Company adopted ASU No. 2017-09 in January 2018 with no impact to its consolidated financial statements.
Noncontrolling Interest	Noncontrolling Interest The Company’s consolidated financial statements include an entity in which the Company has a controlling financial interest. Noncontrolling interest is the portion of equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Such noncontrolling interest is reported on the consolidated balance sheets within equity, separately from the Company’s equity. On the consolidated statements of operations, revenues, expenses and net income or loss from the less-than-wholly owned subsidiary is reported at the consolidated amount, including both the amounts attributable to the Company and the noncontrolling interest. Income or loss is allocated to the noncontrolling interest based on its weighted average ownership percentage for the applicable period. The consolidated statement of equity includes beginning balances, activity for the period and ending balances for each component of stockholders’ equity, noncontrolling interest and total equity. At both March 31, 2018 and December 31, 2017, the noncontrolling interest reported in the Company’s financial statements included a third-party’s 25.0% ownership interest in the Hilton San Diego Bayfront.
Property and Equipment	Property and Equipment Impairment losses are recorded on long-lived assets to be held and used by the Company when indicators of impairment are present and the future undiscounted net cash flows expected to be generated by those assets, based on the Company’s expected investment horizon, are less than the assets’ carrying amount. If such assets are considered to be impaired, the related assets are adjusted to their estimated fair value and an impairment is recognized. The impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. In computing fair value, the Company uses a discounted cash flow analysis to estimate the fair value of its hotel properties, taking into account each property’s expected cash flow from operations and estimated proceeds from the disposition of the property. The factors addressed in determining estimated proceeds from disposition include anticipated operating cash flow in the year of disposition and terminal capitalization rate.
Revenue Recognition	Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to hotel guests, which is generally defined as the date upon which a guest occupies a room and/or utilizes the hotel’s services. Room revenue is recognized over a guest’s stay at a previously agreed upon daily rate. Additionally, some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is booked by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is booked by the Company on a gross basis. A majority of the Company’s hotels participate in frequent guest programs sponsored by the hotel brand owners whereby the hotel allows guests to earn loyalty points during their hotel stay. The Company expenses charges associated with these programs as incurred, and recognizes revenue at the amount it will receive from the brand when a guest redeems their loyalty points by staying at one of the Company’s hotels. In addition, some contracts for rooms or food and beverage services require an advance deposit, which the Company records as deferred revenue (or a contract liability) and recognizes once the performance obligations are satisfied. Food and beverage revenue and other ancillary services revenue are generated when a customer chooses to purchase goods or services separately from a hotel room. These revenue streams are recognized during the time the goods or services are provided to the customer at the amount the Company expects to be entitled to in exchange for those goods or services. For those ancillary services provided by third parties, the Company assesses whether it is the principal or the agent. If the Company is the principal, revenue is recognized based upon the gross sales price. If the Company is the agent, revenue is recognized based upon the commission earned from the third party. Additionally, the Company collects sales, use, occupancy and other similar taxes at its hotels, which the Company presents on a net basis (excluded from revenues) in its consolidated statements of operations. Trade receivables and contract liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Trade receivables, net (1) $ 27,808 $ 20,773 Contract liabilities (2) $ 15,197 $ 13,454 (1) Trade receivables are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits, and are included in other current liabilities on the accompanying consolidated balance sheets.
Segment Reporting	Segment Reporting The Company considers each of its hotels to be an operating segment, none of which meets the threshold for a separate reportable segment. Currently, the Company operates in one reportable segment, hotel ownership.

Organization and Description 20

Organization and Description of Business (Tables)	3 Months Ended
	Mar. 31, 2018
Organization and Description of Business
Schedule of number of hotels managed by each third-party manager	As of March 31, 2018, the Company had interests in 25 hotels (the “25 hotels”), and the Company’s third-party managers included the following: Number of Hotels Subsidiaries of Marriott International, Inc. or Marriott Hotel Services, Inc. (collectively, “Marriott”) 9 Interstate Hotels & Resorts, Inc. 4 Highgate Hotels L.P. and an affiliate 3 Crestline Hotels & Resorts 2 Hilton Worldwide 2 Hyatt Corporation 2 Davidson Hotels & Resorts 1 HEI Hotels & Resorts 1 Singh Hospitality, LLC 1 Total hotels held for investment 25

Summary of Significant Accoun21

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2018
Summary of Significant Accounting Policies
Schedule of computation of basic and diluted earnings per common share	The following table sets forth the computation of basic and diluted earnings per common share (in thousands, except per share data): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Numerator: Net income $ 38,455 $ 63,827 Income from consolidated joint venture attributable to noncontrolling interest (2,439) (1,992) Preferred stock dividends (3,207) (3,207) Distributions paid on unvested restricted stock compensation (59) (60) Undistributed income allocated to unvested restricted stock compensation (117) (248) Numerator for basic and diluted income attributable to common stockholders $ 32,633 $ 58,320 Denominator: Weighted average basic and diluted common shares outstanding 224,282 219,093 Basic and diluted income attributable to common stockholders per common share $ 0.15 $ 0.27
Schedule of contract assets and liabilities	Trade receivables and contract liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Trade receivables, net (1) $ 27,808 $ 20,773 Contract liabilities (2) $ 15,197 $ 13,454 (1) Trade receivables are included in accounts receivable, net on the accompanying consolidated balance sheets. (2) Contract liabilities consist of advance deposits, and are included in other current liabilities on the accompanying consolidated balance sheets.

Investment in Hotel Properties

Investment in Hotel Properties (Tables)	3 Months Ended
	Mar. 31, 2018
Investment in Hotel Properties
Schedule of investment in hotel properties	Investment in hotel properties, net consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Land $ 605,054 $ 605,054 Buildings and improvements 3,067,473 3,049,569 Furniture, fixtures and equipment 496,492 484,749 Intangible assets 48,251 48,371 Franchise fees 980 980 Construction in process 66,134 54,280 Investment in hotel properties, gross 4,284,384 4,243,003 Accumulated depreciation and amortization (1,173,497) (1,136,937) Investment in hotel properties, net $ 3,110,887 $ 3,106,066

Disposals (Tables)

Disposals (Tables)	3 Months Ended
	Mar. 31, 2018
Disposals
Schedule of amounts held for sale	The Company classified the assets and liabilities of both hotels as held for sale as of December 31, 2017 as follows (in thousands): December 31, 2017 Accounts receivable $ 1,676 Prepaid expenses 193 Investment in hotel properties, net 120,916 Other assets 22 Assets held for sale, net $ 122,807 Accounts payable and accrued expenses $ 69 Other current liabilities 41 Other liabilities 79 Liabilities of assets held for sale $ 189
Schedule of operating results for sold entities	The following table provides summary results of operations for the Marriott Philadelphia and the Marriott Quincy, along with the Fairmont Newport Beach and the Marriott Park City, both of which were sold in 2017, which are included in continuing operations for their respective ownership periods (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Revenues $ 603 $ 18,344 Income before income taxes $ (943) $ 2,621 Gain on sale of assets $ 15,659 $ 44,285

Fair Value Measurements and I24

Fair Value Measurements and Interest Rate Derivatives (Tables)	3 Months Ended
	Mar. 31, 2018
Fair Value Measurements and Interest Rate Derivatives
Schedule of assets measured at fair value on a recurring and nonrecurring basis	The following table presents the Company’s assets measured at fair value on a recurring and nonrecurring basis at March 31, 2018 and December 31, 2017 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 March 31, 2018 (unaudited): Interest rate cap derivatives $ 15 $ — $ 15 $ — Interest rate swap derivatives 6,566 — 6,566 — Life insurance policy (1) 632 — 632 — Total assets measured at fair value at March 31, 2018 $ 7,213 $ — $ 7,213 $ — December 31, 2017: Houston hotels, net $ 34,473 $ — — $ 34,473 Interest rate cap derivatives 4 — 4 — Interest rate swap derivatives 3,390 — 3,390 — Life insurance policy (1) 645 — 645 — Total assets measured at fair value at December 31, 2017 $ 38,512 $ — $ 4,039 $ 34,473 (1) Includes the split life insurance policy for a former Company associate. These amounts are included in other assets, net on the accompanying consolidated balance sheets, and will be used to reimburse the Company for payments made to the former associate from the related retirement benefit agreement, which is included in accrued payroll and employee benefits on the accompanying consolidated balance sheets.
Schedule of liabilities measured at fair value on a recurring and nonrecurring basis	The following table presents the Company’s liabilities measured at fair value on a recurring and nonrecurring basis at March 31, 2018 and December 31, 2017 (in thousands): Fair Value Measurements at Reporting Date Total Level 1 Level 2 Level 3 March 31, 2018 (unaudited): Retirement benefit agreement (1) $ 632 $ — $ 632 $ — Total liabilities measured at fair value at March 31, 2018 $ 632 $ — $ 632 $ — December 31, 2017: Retirement benefit agreement (1) $ 645 $ — $ 645 $ — Total liabilities measured at fair value at December 31, 2017 $ 645 $ — $ 645 $ — (1) Includes the retirement benefit agreement for a former Company associate. The agreement calls for the balance of the retirement benefit to be paid out to the former associate in ten annual installments, beginning in 2011. The Company has paid the former associate a total of $1.4 million through March 31, 2018, which was reimbursed to the Company using funds from the related split life insurance policy noted above. These amounts are included in accrued payroll and employee benefits on the accompanying consolidated balance sheets.
Schedule of interest rate derivatives	The Company’s interest rate derivatives, which are not designated as effective cash flow hedges, consisted of the following at March 31, 2018 (unaudited) and December 31, 2017 (in thousands): Estimated Fair Value Asset Strike / Capped Effective Maturity Notional March 31, December 31, Hedged Debt Type Rate Index Date Date Amount 2018 2017 Hilton San Diego Bayfront (1) Cap 4.250 % 1-Month LIBOR May 1, 2017 May 1, 2019 $ 109,261 $ 5 $ — Hilton San Diego Bayfront (1) Cap 6.000 % 1-Month LIBOR November 10, 2017 December 9, 2020 $ 220,000 10 4 $85.0 million term loan (2) Swap 3.391 % 1-Month LIBOR October 29, 2015 September 2, 2022 $ 85,000 3,380 2,010 $100.0 million term loan (3) Swap 3.653 % 1-Month LIBOR January 29, 2016 January 31, 2023 $ 100,000 3,186 1,380 $ 6,581 $ 3,394 (1) In November 2017, the Company refinanced the existing loan secured by the Hilton San Diego Bayfront. Coterminous with the loan refinance, the Company purchased a new interest rate cap agreement with a strike rate of 6.0% and an expiration date in December 2020. The fair values of both Hilton San Diego Bayfront cap agreements are included in other assets, net on the accompanying consolidated balance sheets as of both March 31, 2018 and December 31, 2017. (2) The fair value of the $85.0 million term loan swap agreement is included in other assets, net on the Company’s consolidated balance sheets as of both March 31, 2018 and December 31, 2017. The 1-month LIBOR rate was swapped to a fixed rate of 1.591%. (3) The fair value of the $100.0 million term loan swap agreement is included in other assets, net on the Company’s consolidated balance sheets as of both March 31, 2018 and December 31, 2017. The 1-month LIBOR rate was swapped to a fixed rate of 1.853%.
Schedule of changes in fair value of interest rate derivatives	Noncash changes in the fair values of the Company’s interest rate derivatives resulted in decreases to interest expense for the three months ended March 31, 2018 and 2017 as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Noncash interest on derivatives $ (3,187) $ (657)
Schedule of principal values and estimated fair values of debt	The Company’s principal balances and fair market values of its consolidated debt as of March 31, 2018 (unaudited) and December 31, 2017 were as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Amount (1) Fair Value Carrying Amount (1) Fair Value Debt $ 988,510 $ 994,789 $ 990,402 $ 997,922 (1) The principal balance of debt is presented before any unamortized deferred financing fees.

Other Assets (Tables)

Other Assets (Tables)	3 Months Ended
	Mar. 31, 2018
Other Assets
Schedule of other assets	Other assets, net consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Property and equipment, net $ 1,869 $ 584 Goodwill 990 990 Deferred expense on straight-lined third-party tenant leases 3,304 3,351 Deferred income tax asset 13,431 9,492 Interest rate derivatives 6,581 3,394 Other receivables 4,579 3,136 Other 1,217 1,370 Total other assets, net $ 31,971 $ 22,317

Notes Payable (Tables)

Notes Payable (Tables)	3 Months Ended
	Mar. 31, 2018
Notes Payable
Schedule of notes payable	Notes payable consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Notes payable requiring payments of interest and principal, with fixed rates ranging from 4.12% to 5.95%; maturing at dates ranging from November 2020 through January 2025. The notes are collateralized by first deeds of trust on four hotel properties at both March 31, 2018 and December 31, 2017. $ 343,510 $ 345,402 Note payable requiring payments of interest only, bearing a blended rate of one-month LIBOR plus 105 basis points; maturing in December 2020 with three one-year extensions. The note is collateralized by a first deed of trust on one hotel property. 220,000 220,000 Unsecured term loan requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 180 to 255 basis points over LIBOR, depending on the Company's leverage ratios. LIBOR has been swapped to a fixed rate of 1.591%, resulting in an effective interest rate of 3.391% based on the Company's current leverage. Matures in September 2022. 85,000 85,000 Unsecured term loan requiring payments of interest only, with a blended interest rate based on a pricing grid with a range of 180 to 255 basis points over LIBOR, depending on the Company's leverage ratios. LIBOR has been swapped to a fixed rate of 1.853%, resulting in an effective interest rate of 3.653% based on the Company's current leverage. Matures in January 2023. 100,000 100,000 Unsecured Senior Notes requiring semi-annual payments of interest only, bearing interest at 4.69%; maturing in January 2026. 120,000 120,000 Unsecured Senior Notes requiring semi-annual payments of interest only, bearing interest at 4.79%; maturing in January 2028. 120,000 120,000 Total notes payable $ 988,510 $ 990,402 Current portion of notes payable $ 7,514 $ 7,420 Less: current portion of deferred financing fees (1,945) (1,943) Carrying value of current portion of notes payable $ 5,569 $ 5,477 Notes payable, less current portion $ 980,996 $ 982,982 Less: long-term portion of deferred financing fees (5,217) (5,700) Carrying value of notes payable, less current portion $ 975,779 $ 977,282
Schedule of interest incurred and expensed	Total interest incurred and expensed on the notes payable was as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Interest expense on debt and capital lease obligations $ 11,266 $ 11,328 Noncash interest on derivatives and capital lease obligations, net (3,137) (657) Amortization of deferred financing fees 747 578 Total interest expense $ 8,876 $ 11,249

Other Current Liabilities and27

Other Current Liabilities and Other Liabilities (Tables)	3 Months Ended
	Mar. 31, 2018
Other Current Liabilities and Other Liabilities
Schedule of other current liabilities	Other current liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Property, sales and use taxes payable $ 17,287 $ 17,842 Income tax payable 351 160 Accrued interest 4,256 6,746 Advance deposits 15,197 13,454 Management fees payable 1,562 1,952 Other 4,420 4,348 Total other current liabilities $ 43,073 $ 44,502
Schedule of other liabilities	Other liabilities consisted of the following (in thousands): March 31, December 31, 2018 2017 (unaudited) Deferred revenue $ 5,485 $ 5,589 Deferred rent 21,452 19,582 Deferred income tax liability 230 257 Other 3,874 3,561 Total other liabilities $ 31,041 $ 28,989

Long-Term Incentive Plan (Table

Long-Term Incentive Plan (Tables)	3 Months Ended
	Mar. 31, 2018
Long-Term Incentive Plan
Schedule of amortization expense and forfeitures related to restricted shares	The Company has elected to account for forfeitures as they occur. The Company’s amortization expense and forfeitures related to restricted shares for the three months ended March 31, 2018 and 2017 were as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Amortization expense, including forfeitures $ 2,000 $ 1,749

Commitments and Contingencies (

Commitments and Contingencies (Tables)	3 Months Ended
	Mar. 31, 2018
Commitments and Contingencies
Schedule of basic and incentive management fees	Total basic management fees, net of key money incentives received from third-party hotel managers, along with incentive management fees incurred by the Company during the three months ended March 31, 2018 and 2017 were included in other property-level expenses on the Company’s consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Basic management fees $ 7,534 $ 7,895 Incentive management fees 2,720 2,553 Total basic and incentive management fees $ 10,254 $ 10,448
Schedule of License and Franchise Costs	Total license and franchise fees incurred by the Company during the three months ended March 31, 2018 and 2017 were included in franchise costs on the Company’s consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Franchise assessments (1) $ 5,908 $ 5,927 Franchise royalties 1,945 2,128 Total franchise costs $ 7,853 $ 8,055 (1) Includes advertising, reservation and frequent guest program assessments.
Schedule of capital lease assets	The capital lease assets were included in investment in hotel properties, net on the Company’s consolidated balance sheets as follows (in thousands): March 31, December 31, 2018 2017 (unaudited) Gross capital lease asset - buildings and improvements $ 58,799 $ 58,799 Gross capital lease asset - land 6,605 6,605 Gross capital lease assets 65,404 65,404 Accumulated depreciation (8,575) (8,208) Net capital lease assets $ 56,829 $ 57,196
Schedule of ground, building and air operating lease rent expense	Total rent expense incurred pursuant to ground, building and air lease agreements for the three months ended March 31, 2018 and 2017 was included in property tax, ground lease and insurance on the Company’s consolidated statements of operations as follows (in thousands): Three Months Ended March 31, 2018 2017 (unaudited) (unaudited) Minimum rent, including straight-line adjustments $ 2,130 $ 2,340 Percentage rent (1) 1,744 1,585 Total $ 3,874 $ 3,925 (1) Several of the Company’s hotels pay percentage rent, which is calculated on operating revenues above certain thresholds.
Schedule of hotel geographic concentration of risk	As of March 31, 2018, 18 of the Company’s 25 hotels were geographically concentrated as follows: Trailing 12-Month Percentage of Total Number of Hotels Total Rooms Consolidated Revenue (unaudited) (unaudited) (unaudited) California 7 31 % 35 % Hawaii 1 4 % 8 % Illinois 3 9 % 7 % Massachusetts 2 12 % 13 % Greater Washington DC area 3 15 % 13 % Florida 2 8 % 8 %

Organization and Description 30

Organization and Description of Business (Details)	3 Months Ended
	Mar. 31, 2018item
Organization and Description of Business
Number of hotels held for investment	25
Marriott
Organization and Description of Business
Number of hotels held for investment	9
Interstate Hotels & Resorts, Inc
Organization and Description of Business
Number of hotels held for investment	4
Highgate Hotels L.P. and an affiliate
Organization and Description of Business
Number of hotels held for investment	3
Crestline Hotels & Resorts
Organization and Description of Business
Number of hotels held for investment	2
Hilton Worldwide
Organization and Description of Business
Number of hotels held for investment	2
Hyatt Corporation
Organization and Description of Business
Number of hotels held for investment	2
Davidson Hotels & Resorts
Organization and Description of Business
Number of hotels held for investment	1
HEI Hotels & Resorts
Organization and Description of Business
Number of hotels held for investment	1
Singh Hospitality, LLC
Organization and Description of Business
Number of hotels held for investment	1
Sunstone Hotel Partnership, LLC
Organization and Description of Business
Controlling interest owned (as a percent)	100.00%

Summary of Significant Accoun31

Summary of Significant Accounting Policies - Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator:
Net income	$ 38,455	$ 63,827
Income from consolidated joint venture attributable to noncontrolling interest	(2,439)	(1,992)
Preferred stock dividends	(3,207)	(3,207)
Distributions paid on unvested restricted stock compensation	(59)	(60)
Undistributed income allocated to unvested restricted stock compensation	(117)	(248)
Numerator for basic and diluted income attributable to common stockholders	$ 32,633	$ 58,320
Denominator:
Weighted average basic and diluted common shares outstanding (in shares)	224,282	219,093
Basic and diluted income attributable to common stockholders per common share (in dollars per share)	$ 0.15	$ 0.27

Summary of Significant Accoun32

Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)item	Dec. 31, 2017USD ($)
Revenue Recognition
Trade receivables, net	$ 27,808	$ 20,773
Contract liabilities	$ 15,197	$ 13,454
Segment Reporting
Number of operating segments | item	1
Hilton San Diego Bayfront
Stockholders' Equity Attributable to Noncontrolling Interest
Noncontrolling interest percentage in Hilton San Diego Bayfront	25.00%	25.00%

Investment in Hotel Propertie33

Investment in Hotel Properties (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Investment in Hotel Properties
Land	$ 605,054	$ 605,054
Buildings and improvements	3,067,473	3,049,569
Furniture, fixtures and equipment	496,492	484,749
Intangible assets	48,251	48,371
Franchise fees	980	980
Construction in process	66,134	54,280
Investment in hotel properties, gross	4,284,384	4,243,003
Accumulated depreciation and amortization	(1,173,497)	(1,136,937)
Investment in hotel properties, net	$ 3,110,887	$ 3,106,066

Disposals (Details)

Disposals (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Detail of Amounts Held for Sale
Assets held for sale, net				$ 122,807
Liabilities of assets held for sale				189
Detail of Disposals
Gain on sale of assets		$ 15,659	$ 44,285
Held for sale, not considered a discontinued operation | Marriott Philadelphia and Marriott Quincy
Detail of Amounts Held for Sale
Accounts receivable, net				1,676
Prepaid expenses				193
Investment in hotel properties, net				120,916
Other assets, net				22
Assets held for sale, net				122,807
Accounts payable and accrued expenses				69
Other current liabilities				41
Other liabilities				79
Liabilities of assets held for sale				$ 189
Sold, not considered a discontinued operation | Marriott Philadelphia and Marriott Quincy
Detail of Disposals
Net proceeds received from sale	$ 137,000
Gain on sale of assets	$ 15,700
Sold, not considered a discontinued operation | Marriott Philadelphia, Marriott Quincy, Fairmont Newport Beach and Marriott Park City
Detail of Disposals
Gain on sale of assets		15,659	44,285
Total revenues		603	18,344
Income before income taxes		$ (943)	$ 2,621

Fair Value Measurements and I35

Fair Value Measurements and Interest Rate Derivatives - Fair Value Measurements (Details) $ in Thousands	Mar. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Dec. 31, 2011item
Assets:
Investment in hotel properties, net	$ 3,110,887	$ 3,106,066
Interest rate derivatives	6,581	3,394
Former Chairman
Liabilities:
Number of installments to be paid out under the Retirement Benefit Agreement | item			10
Total amount paid to date under the Retirement Benefit Agreement	1,400
Level 2
Assets:
Life insurance policy	632	645
Total assets	7,213	4,039
Liabilities:
Retirement benefit agreement	632	645
Total liabilities	632	645
Level 2 | Interest Rate Cap
Assets:
Interest rate derivatives	15	4
Level 2 | Interest Rate Swap
Assets:
Interest rate derivatives	6,566	3,390
Total at the end of the period
Assets:
Life insurance policy	632	645
Total assets	7,213	38,512
Liabilities:
Retirement benefit agreement	632	645
Total liabilities	632	645
Total at the end of the period | Interest Rate Cap
Assets:
Interest rate derivatives	15	4
Total at the end of the period | Interest Rate Swap
Assets:
Interest rate derivatives	$ 6,566	3,390
Houston Hotels | Level 3
Assets:
Investment in hotel properties, net		34,473
Total assets		34,473
Houston Hotels | Total at the end of the period
Assets:
Investment in hotel properties, net		$ 34,473

Fair Value Measurements and I36

Fair Value Measurements and Interest Rate Derivatives - Interest Rate Derivatives (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Interest Rate Derivatives
Fair value of interest rate derivatives	$ 6,581		$ 3,394
Fair values of derivative assets	6,581		$ 3,394
Payment for interest rate derivative		$ 19
Noncash interest on derivatives	$ (3,187)	$ (657)
Hilton San Diego Bayfront mortgage payable
Interest Rate Derivatives
Interest rate, description of reference rate	one-month LIBOR		one-month LIBOR
Interest rate added to base rate (as a percent)	1.05%		1.05%
$85.0 million term loan
Interest Rate Derivatives
Term loan total interest rate, including effect of swap agreement	3.391%		3.391%
$100.0 million term loan
Interest Rate Derivatives
Term loan total interest rate, including effect of swap agreement	3.653%		3.653%
Interest Rate Cap | Not designated as hedging instrument | Hilton San Diego Bayfront mortgage payable
Interest Rate Derivatives
Strike rate under interest rate cap agreement	4.25%		4.25%
Interest rate, description of reference rate	1-Month LIBOR		1-Month LIBOR
Effective date	May 1, 2017		May 1, 2017
Maturity Date	May 1, 2019		May 1, 2019
Notional amount	$ 109,261
Fair value of interest rate derivatives	$ 5
Hilton San Diego Bayfront new interest rate cap | Not designated as hedging instrument | Hilton San Diego Bayfront mortgage payable
Interest Rate Derivatives
Strike rate under interest rate cap agreement	6.00%		6.00%
Interest rate, description of reference rate	1-Month LIBOR		1-Month LIBOR
Effective date	Nov. 10, 2017		Nov. 10, 2017
Maturity Date	Dec. 9, 2020		Dec. 9, 2020
Notional amount	$ 220,000
Fair value of interest rate derivatives	$ 10		$ 4
Interest Rate Swap | $85.0 million term loan
Interest Rate Derivatives
Fixed rate under interest rate swap agreement	1.591%		1.591%
Interest Rate Swap | $100.0 million term loan
Interest Rate Derivatives
Fixed rate under interest rate swap agreement	1.853%		1.853%
Interest Rate Swap | Not designated as hedging instrument | $85.0 million term loan
Interest Rate Derivatives
Term loan total interest rate, including effect of swap agreement	3.391%		3.391%
Interest rate, description of reference rate	1-Month LIBOR		1-Month LIBOR
Effective date	Oct. 29, 2015		Oct. 29, 2015
Maturity Date	Sep. 2, 2022		Sep. 2, 2022
Notional amount	$ 85,000
Fair value of interest rate derivatives	$ 3,380		$ 2,010
Fixed rate under interest rate swap agreement	1.591%		1.591%
Interest Rate Swap | Not designated as hedging instrument | $100.0 million term loan
Interest Rate Derivatives
Term loan total interest rate, including effect of swap agreement	3.653%		3.653%
Interest rate, description of reference rate	1-Month LIBOR		1-Month LIBOR
Effective date	Jan. 29, 2016		Jan. 29, 2016
Maturity Date	Jan. 31, 2023		Jan. 31, 2023
Notional amount	$ 100,000
Fair value of interest rate derivatives	$ 3,186		$ 1,380
Fixed rate under interest rate swap agreement	1.853%		1.853%

Fair Value Measurements and I37

Fair Value Measurements and Interest Rate Derivatives - Fair Value of Debt (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Percentage of Debt Bearing Fixed Interest Rates	77.70%	77.80%
Total notes payable	$ 988,510	$ 990,402
Level 3
Fair value of debt	$ 994,789	$ 997,922

Other Assets (Details)

Other Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Other assets, net
Property and equipment, net	$ 1,869	$ 584
Goodwill	990	990
Deferred expense on straight-lined third-party tenant leases	3,304	3,351
Deferred income tax asset	13,431	9,492
Interest rate derivatives	6,581	3,394
Other receivables	4,579	3,136
Other	1,217	1,370
Total other assets, net	31,971	$ 22,317
Income tax benefit recognized due to increase in deferred tax assets	$ (3,900)

Notes Payable (Details)

Notes Payable (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018USD ($)property	Dec. 31, 2017USD ($)property
Notes payable
Total notes payable	$ 988,510	$ 990,402
Current portion of notes payable	7,514	7,420
Less: current portion of deferred financing fees	(1,945)	(1,943)
Current portion of notes payable, net	5,569	5,477
Notes payable, less current portion	980,996	982,982
Less: long-term portion of deferred financing fees	(5,217)	(5,700)
Carrying value of notes payable, less current portion	$ 975,779	$ 977,282
Notes payable maturing in various years
Notes payable
Number of hotels provided as collateral | property	4	4
Total notes payable	$ 343,510	$ 345,402
Notes payable maturing in various years | Minimum
Notes payable
Fixed interest rate (as a percent)	4.12%	4.12%
Notes payable maturing in various years | Maximum
Notes payable
Fixed interest rate (as a percent)	5.95%	5.95%
Hilton San Diego Bayfront mortgage payable
Notes payable
Number of hotels provided as collateral | property	1	1
Interest rate, description of reference rate	one-month LIBOR	one-month LIBOR
Interest rate added to base rate (as a percent)	1.05%	1.05%
Number of extension periods available for secured debt	3	3
Term of extension period for secured debt	1 year	1 year
Total notes payable	$ 220,000	$ 220,000
$85.0 million term loan
Notes payable
Term loan total interest rate, including effect of swap agreement	3.391%	3.391%
Total notes payable	$ 85,000	$ 85,000
$85.0 million term loan | Minimum
Notes payable
Interest rate added to base rate (as a percent)	1.80%	1.80%
$85.0 million term loan | Maximum
Notes payable
Interest rate added to base rate (as a percent)	2.55%	2.55%
$100.0 million term loan
Notes payable
Term loan total interest rate, including effect of swap agreement	3.653%	3.653%
Total notes payable	$ 100,000	$ 100,000
$100.0 million term loan | Minimum
Notes payable
Interest rate added to base rate (as a percent)	1.80%	1.80%
$100.0 million term loan | Maximum
Notes payable
Interest rate added to base rate (as a percent)	2.55%	2.55%
Series A Senior Notes
Notes payable
Fixed interest rate (as a percent)	4.69%	4.69%
Total notes payable	$ 120,000	$ 120,000
Series B Senior Notes
Notes payable
Fixed interest rate (as a percent)	4.79%	4.79%
Total notes payable	$ 120,000	$ 120,000
Interest Rate Swap | $85.0 million term loan
Notes payable
Fixed rate under interest rate swap agreement	1.591%	1.591%
Interest Rate Swap | $100.0 million term loan
Notes payable
Fixed rate under interest rate swap agreement	1.853%	1.853%
Not designated as hedging instrument | Interest Rate Cap | Hilton San Diego Bayfront mortgage payable
Notes payable
Interest rate, description of reference rate	1-Month LIBOR	1-Month LIBOR
Not designated as hedging instrument | Interest Rate Swap | $85.0 million term loan
Notes payable
Interest rate, description of reference rate	1-Month LIBOR	1-Month LIBOR
Fixed rate under interest rate swap agreement	1.591%	1.591%
Term loan total interest rate, including effect of swap agreement	3.391%	3.391%
Not designated as hedging instrument | Interest Rate Swap | $100.0 million term loan
Notes payable
Interest rate, description of reference rate	1-Month LIBOR	1-Month LIBOR
Fixed rate under interest rate swap agreement	1.853%	1.853%
Term loan total interest rate, including effect of swap agreement	3.653%	3.653%

Notes Payable - Interest Expens

Notes Payable - Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Interest incurred and expensed
Interest expense on debt and capital lease obligations	$ 11,266	$ 11,328
Noncash interest on derivatives and capital lease obligations, net	(3,137)	(657)
Amortization of deferred financing fees	747	578
Total interest incurred and expensed on debt and capital lease obligations	$ 8,876	$ 11,249

Other Current Liabilities and41

Other Current Liabilities and Other Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Other Current Liabilities
Property, sales and use taxes payable	$ 17,287	$ 17,842
Income tax payable	351	160
Accrued interest	4,256	6,746
Advance deposits	15,197	13,454
Management fees payable	1,562	1,952
Other	4,420	4,348
Total other current liabilities	43,073	44,502
Other Liabilities
Deferred revenue	5,485	5,589
Deferred rent	21,452	19,582
Deferred income tax liability	230	257
Other	3,874	3,561
Total other liabilities	$ 31,041	$ 28,989

Stockholders' Equity (Details)

Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		3 Months Ended	12 Months Ended
	May 31, 2016	Mar. 31, 2016	Mar. 31, 2018	Dec. 31, 2017	Feb. 28, 2017
Maximum | Share repurchase program
Stockholders' equity
Repurchase Program, maximum amount authorized for repurchase					$ 300
Series E Cumulative Redeemable Preferred Stock
Stockholders' equity
Number of shares of preferred stock sold (in shares)		4,600,000
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent)		6.95%	6.95%	6.95%
Liquidation preference (in dollars per share)		$ 25	$ 25	$ 25
Proceeds from preferred stock offerings		$ 115
Payment of preferred stock offering costs		$ 4
Redemption price (in dollars per share)			$ 25
Series F Cumulative Redeemable Preferred Stock
Stockholders' equity
Number of shares of preferred stock sold (in shares)	3,000,000
Preferred stock, Cumulative Redeemable Preferred Stock, dividend rate (as a percent)	6.45%		6.45%	6.45%
Liquidation preference (in dollars per share)	$ 25		$ 25	$ 25
Proceeds from preferred stock offerings	$ 75
Payment of preferred stock offering costs	$ 2.6
Redemption price (in dollars per share)			$ 25
Cumulative Redeemable Preferred Stock | Share repurchase program
Stockholders' equity
Repurchase Program, number of shares repurchased (in shares)			0
Common Stock | Share repurchase program
Stockholders' equity
Repurchase Program, number of shares repurchased (in shares)			0
Common Stock | At The Market
Stockholders' equity
Proceeds from issuance of common stock			$ 79.4
Payments of stock issuance costs			$ 1.5
ATM Program, number of shares sold or issued (in shares)			4,876,855
ATM Program, remaining amount authorized for issuance			$ 220.6
Common Stock | Maximum | At The Market
Stockholders' equity
ATM Program, maximum amount authorized for issuance					$ 300

Long-Term Incentive Plan (Detai

Long-Term Incentive Plan (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 30, 2008	Mar. 31, 2018	Mar. 31, 2017
Long-Term Incentive Plan
Capitalized compensation cost related to shares issued to design and construction employees		$ 113	$ 151
Restricted Shares
Long-Term Incentive Plan
Amortization Expense, including forfeitures		2,000	1,749
Capitalized compensation cost related to shares issued to design and construction employees		$ 100	$ 200
Restricted Shares | Minimum
Long-Term Incentive Plan
Vesting period		3 years
Restricted Shares | Maximum
Long-Term Incentive Plan
Vesting period		4 years
Stock Options | Former Chairman
Stock options
Number of options granted (in shares)	200,000
Expiration date of outstanding options	Apr. 27, 2018

Commitments and Contingencies -

Commitments and Contingencies - Management Fees, Franchise Costs and Renovation Commitments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Basic and incentive management fees incurred
Basic management fees	$ 7,534	$ 7,895
Incentive management fees	2,720	2,553
Total basic and incentive management fees	10,254	10,448
License and Franchise Agreements
Franchise assessments	5,908	5,927
Franchise royalties	1,945	2,128
Total franchise costs	$ 7,853	$ 8,055
Minimum
Management Agreements
Basic management fees (as a percent)	1.75%
Maximum
Management Agreements
Basic management fees (as a percent)	3.50%
Renovation and Construction Commitments
Renovation and Construction Commitments
Remaining construction commitments	$ 78,500

Commitments and Contingencies45

Commitments and Contingencies - Capital and Operating Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Future minimum lease payments under capital leases
Capital lease obligation, noncurrent	$ 26,854		$ 26,804
Ground, Building and Air Leases
Minimum rent, including straight-line adjustments	2,130	$ 2,340
Percentage rent	1,744	1,585
Total rent expense included in property tax, ground lease and insurance	3,874	3,925
Lease expense on corporate facility	200	$ 100
Hotels with capital leases
Assets under capital lease
Capital Leased Assets, Gross	65,404		65,404
Accumulated depreciation	(8,575)		(8,208)
Capital lease assets, net	56,829		57,196
Hyatt Centric Chicago Magnificent Mile | Buildings and improvements
Assets under capital lease
Capital Leased Assets, Gross	58,799		58,799
Courtyard by Marriott Los Angeles | Land
Assets under capital lease
Capital Leased Assets, Gross	$ 6,605		$ 6,605

Commitments and Contingencies46

Commitments and Contingencies - Concentration of Risk and Other (Details) $ in Thousands	Mar. 31, 2018USD ($)propertyitem	Mar. 31, 2018USD ($)propertyitem	Mar. 31, 2018USD ($)propertyitem
Concentration of Risk
Number of hotels which are held for investment | item	25	25	25
Other
Term of unsecured environmental indemnities		0 years
Damage limitation of unsecured environmental indemnities | $		$ 0
California
Concentration of Risk
Number of hotels which are held for investment	7	7	7
Hawaii
Concentration of Risk
Number of hotels which are held for investment	1	1	1
Illinois
Concentration of Risk
Number of hotels which are held for investment	3	3	3
Massachusetts
Concentration of Risk
Number of hotels which are held for investment	2	2	2
Greater Washington DC area
Concentration of Risk
Number of hotels which are held for investment	3	3	3
Florida
Concentration of Risk
Number of hotels which are held for investment	2	2	2
Percentage of total rooms | California
Concentration of Risk
Concentration risk (as a percent)	31.00%
Percentage of total rooms | Hawaii
Concentration of Risk
Concentration risk (as a percent)	4.00%
Percentage of total rooms | Illinois
Concentration of Risk
Concentration risk (as a percent)	9.00%
Percentage of total rooms | Massachusetts
Concentration of Risk
Concentration risk (as a percent)	12.00%
Percentage of total rooms | Greater Washington DC area
Concentration of Risk
Concentration risk (as a percent)	15.00%
Percentage of total rooms | Florida
Concentration of Risk
Concentration risk (as a percent)	8.00%
Percentage of total revenue generated by hotels | California
Concentration of Risk
Concentration risk (as a percent)			35.00%
Percentage of total revenue generated by hotels | Hawaii
Concentration of Risk
Concentration risk (as a percent)			8.00%
Percentage of total revenue generated by hotels | Illinois
Concentration of Risk
Concentration risk (as a percent)			7.00%
Percentage of total revenue generated by hotels | Massachusetts
Concentration of Risk
Concentration risk (as a percent)			13.00%
Percentage of total revenue generated by hotels | Greater Washington DC area
Concentration of Risk
Concentration risk (as a percent)			13.00%
Percentage of total revenue generated by hotels | Florida
Concentration of Risk
Concentration risk (as a percent)			8.00%
Workers' compensation insurance programs
Other
Outstanding irrevocable letters of credit | $	$ 500	$ 500	$ 500
Draws on letters of credit | $		$ 0