Equity Method Investment |
3 Months Ended |
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Mar. 31, 2026 | |
| Equity Method Investments and Joint Ventures [Abstract] | |
| Equity Method Investment | Note 7. Equity Method Investment As of both March 31, 2026 and December 31, 2025, we owned 34% of Sonesta’s outstanding common stock. We account for our 34% non-controlling interest in Sonesta under the equity method of accounting. As of March 31, 2026 and December 31, 2025, our investment in Sonesta had a carrying value of $108,809 and $111,796, respectively. On the date of acquisition of our initial equity interest in Sonesta (February 27, 2020), the cost basis of our investment in Sonesta exceeded our proportionate share of Sonesta’s total stockholders’ equity book value by an aggregate of $8,000. As required under GAAP, we are amortizing this difference to equity in earnings of an investee over 31 years, the weighted average remaining useful life of the real estate assets and intangible assets and liabilities owned by Sonesta as of the date of our acquisition. We recorded amortization of the basis difference of $65 in both of the three months ended March 31, 2026 and 2025. We recognized losses of $3,001 and $3,947 related to our investment in Sonesta for the three months ended March 31, 2026 and 2025, respectively. These amounts, which include amortization of the basis difference, are included in equity in losses of an investee in our condensed consolidated statements of comprehensive income (loss). We recorded a liability of $42,000 for the fair value of our initial investment in Sonesta, as no cash consideration was exchanged related to the modification of our management agreement with, and investment in, Sonesta. This liability for our investment in Sonesta is included in accounts payable and other liabilities in our condensed consolidated balance sheets and is being amortized on a straight-line basis through the initial term of the legacy Sonesta agreement, January 31, 2037, as a reduction to hotel operating expenses in our condensed consolidated statements of comprehensive income (loss). We reduced hotel operating expenses by $621 for each of the three months ended March 31, 2026 and 2025, for amortization of this liability. As of March 31, 2026 and December 31, 2025, the unamortized balance of this liability was $26,890 and $27,511, respectively. See Notes 6 and 11 for further information regarding our relationships, agreements and transactions with Sonesta.
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