Hersha Hospitality Trust Announces Full-Year 2014 Hotel EBITDA Growth of 26.4%

Net income applicable to common shareholders was $52.9 million, or $0.26 per diluted common share, for the full-year ended December 31, 2014 compared to net income applicable to common shareholders of $32.8 million, or $0.16 per diluted common share in 2013.

Hersha Hospitality Trust (NYSE: HT), owner of upscale hotels in urban gateway markets, today announced results for the full-year and fourth quarter ended December 31, 2014.

Full‐Year and Fourth Quarter 2014 Financial Results

Net income applicable to common shareholders was $52.9 million, or $0.26 per diluted common share, for the full-year ended December 31, 2014 compared to net income applicable to common shareholders of $32.8 million, or $0.16 per diluted common share in 2013. The increase in net income reported for the full‐year was primarily attributable to same store growth, contributions from stabilizing assets, as well as income generated from acquisitions and completed development projects. Net income was further aided by non-recurring gains recorded on hotel dispositions, acquisitions and development loan recoveries during the year.

Adjusted Funds from Operations (“AFFO”) in 2014 increased by $16.3 million to $102.8 million, compared to $86.5 million in 2013. The Company’s weighted average diluted common shares and units of limited partnership interest in Hersha Hospitality Limited Partnership (“OP Unit”) outstanding were approximately 207.8 million as of December 31, 2014, compared to approximately 208.9 million as of December 31, 2013. AFFO per diluted common share and OP Unit was $0.49, a 20% increase from AFFO of $0.41 per diluted common share and OP Unit reported in 2013.

AFFO in the fourth quarter increased $3.7 million to $28.3 million, compared to $24.6 million in the fourth quarter 2013. AFFO per diluted common share and OP Unit was $0.14, an increase from AFFO of $0.12 per diluted common share and OP Unit reported in the same quarter in 2013. An explanation of certain non-GAAP financial measures used in this press release, including, among others, AFFO, as well as reconciliations of those non-GAAP financial measures, is included at the end of this press release.

Mr. Jay H. Shah, Hersha’s Chief Executive Officer, stated, “The culmination of Hersha’s development pipeline and portfolio recycling strategy in 2014, combined with a reacceleration of corporate and leisure transient demand led to material improvement in the Company’s RevPAR quality and EBITDA growth. Hersha’s young, high quality, urban transient portfolio concentrated in coastal gateway markets delivered Hotel EBITDA of $157.4 million and Consolidated RevPAR of $155.19 in 2014. With our markets above prior peak occupancy, revenue management strategies in 2014 focused on generating ADR growth. As a result, approximately 55% of our 2014 RevPAR growth was comprised of rate increases. We expect a higher proportion of ADR driven RevPAR expansion in 2015 as our hotels continue to stabilize. During fourth quarter 2014, the Consolidated Portfolio reported rate-driven RevPAR growth of 8.6%, supported by favorable market conditions on the West Coast and in Boston, where our RevPAR increased 17.1% and 10.1%, respectively.”

Mr. Shah continued, “During 2014, we continued to execute our focused and differentiated approach by acquiring high quality independent hotels in Southern California and South Florida, markets that boast significant barriers-to-entry and growing, high-rated transient demand. In addition, we successfully delivered two new hotels in robust Manhattan submarkets with deep and diverse corporate and leisure demand. As we look ahead, Hersha’s pure-play urban transient portfolio is expected to benefit from an improving macroeconomic environment, ADR‐based growth, portfolio ramp‐up and stabilization, and minimal renovation disruption. In addition, the net asset value of Hersha’s geographically concentrated portfolio continues to increase, driven in part by international capital seeking well‐located cash flowing real estate in recognizable safe, stable and liquid U.S. gateway markets.”

Fourth Quarter 2014 Operating Results

For fourth quarter 2014, revenue per available room (“RevPAR”) at the Company’s 46 consolidated hotels as of December 31, 2014, compared to 43 hotels as of December 31, 2013, increased 8.6% to $161.37. The Company’s average daily rate (“ADR”) for the consolidated hotel portfolio increased 4.9% to $198.37, while occupancy increased 275 basis points to 81.3%. Hotel EBITDA margins for the consolidated hotel portfolio increased 50 basis points to 38.0%, with Hotel EBITDA increasing 24.3%, or $8.4 million, to $42.9 million.

For fourth quarter 2014, RevPAR at the Company’s 44 comparable hotels increased 5.7% to $158.20, with an ADR increase of 3.4% to $195.91 and occupancy growth of 178 basis points to 80.8%. As previously mentioned, the Company’s best performing market during the fourth quarter was the West Coast, which reported 17.1% RevPAR growth. The Company’s Boston portfolio reported 10.1% RevPAR growth, while the Washington, DC and Philadelphia portfolios delivered 14.9% and 12.0% growth, respectively. The Company’s comparable South Florida portfolio continued to be impacted by renovations at the Residence Inn Coconut Grove. Excluding these renovations, the Company’s comparable South Florida portfolio reported 7.9% RevPAR growth in fourth quarter 2014.

New York City and Manhattan

The New York City hotel portfolio, which includes the five boroughs, consisted of 17 hotels as of December 31, 2014. For fourth quarter 2014, the Company’s comparable New York City hotel portfolio (15 hotels) recorded a 2.2% increase in RevPAR to $226.59, as ADR rose 0.4% to $242.23, while occupancy increased 160 basis points to 93.5%.

The Manhattan hotel portfolio consisted of 14 hotels as of December 31, 2014. For fourth quarter 2014, the Company’s comparable Manhattan hotel portfolio (12 hotels) recorded a 2.6% increase in RevPAR to $244.81, as ADR remained relatively constant at $257.01, and occupancy increased 284 basis points to 95.3%. The Company’s Manhattan portfolio reported strong EBITDA margins of 44.8% during the fourth quarter.

Financing

As of December 31, 2014, the Company maintained significant financial flexibility with approximately $21.7 million of cash and cash equivalents and full capacity under the Company’s revolving line of credit provided under its credit facility. As of December 31, 2014, 84.0% of the Company’s consolidated debt is fixed rate debt or effectively fixed through interest rate swaps and caps. The Company’s total consolidated debt has a weighted average interest rate of approximately 4.4% and a weighted average life-to-maturity of approximately 3.8 years assuming no extension options are exercised.

During fourth quarter 2014, the Company refinanced the mortgage debt at the Hilton Garden Inn Tribeca within a favorable financing environment in terms of rate, duration and proceeds. The new $46.5 million loan is priced at 30-day LIBOR plus 2.30%, and is interest only in the first two years of the five-year term.

2015 Outlook

Hersha is introducing operating and financial expectations for fiscal year 2015 for the Company’s consolidated and comparable portfolios. These expectations, which are based on the Company’s current view of operating and economic fundamentals, assume no additional acquisitions, dispositions or capital market activities. As a result, Hersha’s 2015 operating and financial expectations are as follows:

       
      2015 Outlook
($’s in millions except per share amounts)     Low     High
Net Income     $27.0     $31.0
Net Income per diluted share     $0.13     $0.15
             
Consolidated RevPAR Growth     6.0%     8.0%
Consolidated EBITDA Margin Growth     75 bps     125 bps
             
Comparable Property RevPAR Growth     5.0%     6.0%
Comparable Property EBITDA Margin Growth     50 bps     100 bps
             
Adjusted EBITDA     $176.0     $180.0
             
Adjusted FFO     $116.0     $120.0
Adjusted FFO per diluted share     $0.56     $0.58
             

Dividends

Hersha paid a dividend of $0.50 per Series B preferred share and $0.4297 per Series C preferred share for the fourth quarter 2014. The preferred share dividends were paid on January 15, 2015 to holders of record as of January 1, 2015.

The Company’s Board of Trustees also declared quarterly cash dividends of $0.07 per common share and per OP Unit for the fourth quarter. The common share dividend and the OP Unit distribution was paid January 15, 2015 to holders of record as of January 5, 2015.

About Hersha Hospitality Trust

Hersha Hospitality Trust (HT) is a self-advised real estate investment trust in the hospitality sector, which owns and operates high quality upscale hotels in urban gateway markets. The Company’s 51 hotels totaling 8,259 rooms are located in New York, Boston, Philadelphia, Washington, DC, Miami and select markets on the West Coast and South Florida. The Company’s shares are traded on The New York Stock Exchange under the ticker “HT”.

Non-GAAP Financial Measures

An explanation of Funds from Operations (“FFO”), AFFO, Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA and Hotel EBITDA, as well as reconciliations of FFO, AFFO, EBITDA and Adjusted EBITDA to net income or loss, the most directly comparable U.S. GAAP measures, is included at the end of this release.

 

                 
HERSHA HOSPITALITY TRUST                
Balance Sheet (unaudited)                
(in thousands, except shares and per share data)                
                 
      December 31, 2014     December 31, 2013
Assets:                

Investment in Hotel Properties, Net of Accumulated Depreciation, Including Consolidation of Variable Interest Entity Assets of $84,247 and $85,759

    $ 1,745,483       $ 1,535,835  
Investment in Unconsolidated Joint Ventures       11,150         12,044  
Cash and Cash Equivalents       21,675         36,213  
Escrow Deposits       16,941         25,938  
Hotel Accounts Receivable, Net of Allowance for Doubtful Accounts of $39 and $43       9,363         9,141  
Deferred Financing Costs, Net of Accumulated Amortization of $6,938 and $7,070       8,605         7,570  
Due from Related Parties       6,580         11,124  
Intangible Assets, Net of Accumulated Amortization of $3,514 and $3,227       7,316         7,603  
Deposits on Hotel Acquisitions               18,586  
Other Assets       28,426         27,460  
Hotel Assets Held for Sale               56,583  
Total Assets     $ 1,855,539       $ 1,748,097  
                 
Liabilities and Equity:                
Line of Credit     $       $  
Unsecured Term Loan       250,000         150,000  
Unsecured Notes Payable       51,548         51,548  

Mortgages Payable, including Net Unamortized Premium and Consolidation of Variable Interest Entity Debt of $54,132 and $55,714

      617,375         571,953  
Accounts Payable, Accrued Expenses and Other Liabilities       54,115         40,852  
Dividends and Distributions Payable       17,909         15,955  
Due to Related Parties       7,203         4,815  
Liabilities Related to Hotel Assets Held for Sale               45,835  
Total Liabilities     $ 998,150       $ 880,958  
                 
Equity:                
Shareholders’ Equity:                

Preferred Shares: $.01 Par Value, 29,000,000 Shares Authorized, 4,600,000 Series B and 3,000,000 Series C Shares Issued and Outstanding at December 31, 2014 and December 31, 2013, with Liquidation Preferences of $25 Per Share

    $ 76       $ 76  

Common Shares: Class A, $.01 Par Value, 300,000,000 Shares Authorized, 198,835,083 and 202,759,419 Shares Issued and Outstanding at December 31, 2014 and December 31, 2013, respectively

      1,989         2,028  

Common Shares: Class B, $.01 Par Value, 1,000,000 Shares Authorized, None Issued and Outstanding at December 31, 2014 and December 31, 2013

               
Accumulated Other Comprehensive Loss       (358 )       (376 )
Additional Paid-in Capital       1,193,056         1,200,798  
Distributions in Excess of Net Income       (365,381 )       (364,568 )
Total Shareholders’ Equity       829,382         837,958  
                 
Noncontrolling Interests:                
Noncontrolling Interests – Common Units       29,082         29,523  
Noncontrolling Interests – Consolidated Variable Interest Entity       (1,075 )       (342 )
Total Noncontrolling Interests       28,007         29,181  
                 
Total Equity       857,389         867,139  
                 
Total Liabilities and Equity     $ 1,855,539       $ 1,748,097  
                     
                                 
HERSHA HOSPITALITY TRUST                                
Summary Results (unaudited)                                
(in thousands, except shares and per share data)
                 
        Three Months Ended       Year Ended
        December 31, 2014       December 31, 2013       December 31, 2014       December 31, 2013
Revenues:                                
Hotel Operating Revenues     $ 112,895       $ 92,045       $ 417,226       $ 338,064  
Interest Income from Development Loans                               158  
Other Revenue       31         56         180         191  
Total Revenues       112,926         92,101         417,406         338,413  
                                 
Operating Expenses:                                
Hotel Operating Expenses       60,952         50,880         227,324         188,431  
Insurance Recoveries                       (4,604 )       (403 )
Hotel Ground Rent       718         246         2,433         985  
Real Estate and Personal Property Taxes and Property Insurance       8,322         6,329         30,342         24,083  
General and Administrative       4,181         5,156         14,335         14,123  
Share Based Compensation       1,872         2,927         6,028         9,746  
Acquisition and Terminated Transaction Costs       328         171         2,472         974  
Depreciation and Amortization       16,802         14,628         69,167         55,784  
Contingent Consideration Related to Hotel Acquisition       1,000                 2,000          
Total Operating Expenses       94,175         80,337         349,497         293,723  
                                 
Operating Income       18,751         11,764         67,909         44,690  
                                 
Interest Income       59         409         805         1,784  
Interest Expense       (11,108 )       (10,642 )       (43,357 )       (40,935 )
Other (Expense) Income       (104 )       171         (485 )       (102 )
Gain on Disposition of Hotel Properties                       7,195          
(Loss) Gain on Hotel Acquisitions, Net       (927 )       (12 )       12,667         12,096  
Development Loan Recovery                       22,494          
Loss on Debt Extinguishment       (26 )               (670 )       (545 )

Income before Income (Loss) from Unconsolidated Joint Venture Investments, Income Taxes and Discontinued Operations

      6,645         1,690         66,558         16,988  
                                 
Unconsolidated Joint Ventures                                
Income (Loss) from Unconsolidated Joint Ventures       87         (1 )       693         (22 )
Impairment of Investment in Unconsolidated Joint Venture               (1,813 )               (1,813 )

Loss from Remeasurement of Investment in Unconsolidated Joint Ventures

                               
Income (Loss) from Unconsolidated Joint Venture Investments       87         (1,814 )       693         (1,835 )
                                 
Income (Loss) before Income Taxes       6,732         (124 )       67,251         15,153  
                                 
Income Tax Benefit       1,879         3,318         2,685         5,600  
                                 
Income from Continuing Operations       8,611         3,194         69,936         20,753  
                                 
Discontinued Operations                                
Gain (Loss) on Disposition of Discontinued Assets               31,089         (128 )       32,121  
Impairment of Discontinued Assets                       (1,800 )       (10,314 )
Income from Discontinued Operations, Net of Income Taxes               2,956         263         7,388  
Income (Loss) from Discontinued Operations               34,045         (1,665 )       29,195  
                                 
Net Income       8,611         37,239         68,271         49,948  
                                 
Loss (Income) Allocated to Noncontrolling Interests       84         (963 )       (1,016 )       (335 )
Preferred Distributions       (3,589 )       (3,589 )       (14,356 )       (14,611 )

Extinguishment of Issuance Costs Upon Redemption of Series A Preferred Shares

                              (2,250 )
                                 
Net Income Applicable to Common Shareholders     $ 5,106       $ 32,687       $ 52,899       $ 32,752  
                                 

Earnings per Share:

                               
BASIC                                

Income (Loss) from Continuing Operations Applicable to Common Shareholders

    $ 0.03       $ (0.01 )     $ 0.27       $ 0.02  
Income (Loss) from Discontinued Operations       0.00         0.17         (0.01 )       0.14  
                                 
Net Income Applicable to Common Shareholders     $ 0.03       $ 0.16       $ 0.26       $ 0.16  
                                 
DILUTED                                

Income (Loss) from Continuing Operations Applicable to Common Shareholders

    $ 0.02       $ (0.01 )     $ 0.27       $ 0.02  
Income (Loss) from Discontinued Operations       0.00         0.17         (0.01 )       0.14  
                                 
Net Income Applicable to Common Shareholders     $ 0.02       $ 0.16       $ 0.26       $ 0.16  
                                 

Weighted Average Common Shares Outstanding:

                               
Basic       198,629,945         198,994,277         199,109,209         198,390,450  
Diluted       200,779,472         198,994,277         201,197,310         201,918,177  
                                         

Non-GAAP Measures

FFO and AFFO

The National Association of Real Estate Investment Trusts (“NAREIT”) developed Funds from Operations (“FFO”) as a non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. We calculate FFO applicable to common shares and Common Units in accordance with the April 2002 National Policy Bulletin of NAREIT, which we refer to as the White Paper. The White Paper defines FFO as net income (loss) (computed in accordance with GAAP) excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated assets, plus certain non-cash items, such as loss from impairment of assets and depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Our interpretation of the NAREIT definition is that non-controlling interest in net income (loss) should be added back to (deducted from) net income (loss) as part of reconciling net income (loss) to FFO. Our FFO computation may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do.

The GAAP measure that we believe to be most directly comparable to FFO, net income (loss) applicable to common shareholders, includes loss from the impairment of certain depreciable assets, our investment in unconsolidated joint ventures and land, depreciation and amortization expenses, gains or losses on property sales, non-controlling interest and preferred dividends. In computing FFO, we eliminate these items because, in our view, they are not indicative of the results from our property operations. We determined that the loss from the impairment of certain depreciable assets, including investments in unconsolidated joint ventures and land, was driven by a measurable decrease in the fair value of certain hotel properties and other assets as determined by our analysis of those assets in accordance with applicable GAAP. As such, these impairments have been eliminated from net income (loss) to determine FFO.

Hersha also presents Adjusted Funds from Operations (AFFO), which reflects FFO in accordance with the NAREIT definition further adjusted by:

  • adding back write-offs of deferred financing costs on debt extinguishment, both for consolidated and unconsolidated properties;
  • adding back amortization of deferred financing costs;
  • making adjustments for the amortization of original issue discount/premium;
  • adding back non-cash stock expense;
  • adding back acquisition and terminated transaction expenses;
  • adding back preferred share extinguishment costs
  • adding back prior period tax assessment expenses
  • adding back FFO attributed to our partners in consolidated joint ventures; and
  • making adjustments to ground lease payments, which are required by GAAP to be amortized on a straight-line basis over the term of the lease, to reflect the actual lease payment.

FFO and AFFO do not represent cash flows from operating activities in accordance with GAAP and should not be considered an alternative to net income as an indication of the Company’s performance or to cash flow as a measure of liquidity or ability to make distributions. We consider FFO and AFFO to be meaningful, additional measures of our operating performance because they exclude the effects of the assumption that the value of real estate assets diminishes predictably over time, and because they are widely used by industry analysts as performance measures. We show both FFO from consolidated hotel operations and FFO from unconsolidated joint ventures because we believe it is meaningful for the investor to understand the relative contributions from our consolidated and unconsolidated hotels. The display of both FFO from consolidated hotels and FFO from unconsolidated joint ventures allows for a detailed analysis of the operating performance of our hotel portfolio by management and investors. We present FFO and AFFO applicable to common shares and Partnership units because our Partnership units are redeemable for common shares. We believe it is meaningful for the investor to understand FFO and AFFO applicable to all common shares and Partnership units.

Certain amounts related to depreciation and amortization and depreciation and amortization from discontinued operations in the prior year FFO reconciliation have been recast to conform to the current year presentation. In addition, based on guidance provided by NAREIT, we have eliminated loss from the impairment of certain depreciable assets, including investments in unconsolidated joint ventures and land, from net (income) loss to arrive at FFO in each year presented. The following table reconciles FFO and AFFO for the periods presented to the most directly comparable GAAP measure, net income (loss) applicable to common shares, for the same periods:

                                 
HERSHA HOSPITALITY TRUST                                
Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
(in thousands, except shares and per share data)
                                 
        Three Months Ended       Year Ended
       

December 31, 2014

      December 31, 2013       December 31, 2014       December 31, 2013
                                 
Net income applicable to common shares     $ 5,106       $ 32,687       $ 52,899       $ 32,752  
(Loss) income allocated to noncontrolling interest       (84 )       963         1,016         335  
(Income) loss from unconsolidated joint ventures       (87 )       1,814         (693 )       1,835  
Loss (gain) on hotel acquisition       927         12         (12,667 )       (12,096 )
Development loan recovery                       (22,494 )        
Gain on disposition of hotel properties               (31,089 )       (7,067 )       (32,121 )
Loss from impairment of depreciable assets                       1,800         10,314  
Depreciation and amortization       16,802         14,628         69,167         55,784  
Depreciation and amortization from discontinued operations               13                 7,050  

Funds from consolidated hotel operations applicable to common shares and Partnership units

      22,664         19,028         81,961         63,853  
                                 
Income (loss) from unconsolidated joint venture investments       87         (1,814 )       693         (1,835 )
Impairment of investment in unconsolidated joint ventures               1,813                 1,813  

Depreciation and amortization of purchase price in excess of historical cost

      143         147         570         596  

Interest in depreciation and amortization of unconsolidated joint ventures

      1,612         1,774         5,915         6,068  

Funds from unconsolidated joint venture operations applicable to common shares and Partnership units

      1,842         1,920         7,178         6,642  
                                 
Funds from Operations applicable to common shares and Partnership units       24,506         20,948         89,139         70,495  
                                 
Add:                                
Non-cash extinguishment of issuance costs upon redemption of Series A Preferred Shares                               2,250  
Non-cash share based compensation expense       1,872         2,927         6,028         9,746  
Acquisition and terminated transaction costs       328         171         2,472         974  
Contingent consideration       1,000                 2,000          
Amortization of deferred financing costs       704         753         2,768         2,886  
Amortization of discounts and premiums       (258 )       (213 )       (955 )       (845 )
Deferred financing costs written off in debt extinguishment       26                 670         545  
Straight-line amortization of ground lease expense       122                 408         2  
State and local tax expense related to reassessment of prior period assessment                       302         434  
                                 
Adjusted Funds from Operations     $ 28,300       $ 24,586       $ 102,832       $ 86,487  
                                 

AFFO per Diluted Weighted Average Common Shares and Units Outstanding

    $ 0.14       $ 0.12       $ 0.49       $ 0.41  
                                 
Diluted Weighted Average Common Shares and Units Outstanding       207,810,478         209,016,369         207,764,287         208,886,212  
                                         

Adjusted EBITDA

Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA) is a non-GAAP financial measure within the meaning of the Securities and Exchange Commission rules. Our interpretation of Adjusted EBITDA is that EBITDA derived from our investment in unconsolidated joint ventures should be added back to net income (loss) as part of reconciling net income (loss) to Adjusted EBITDA. Our Adjusted EBITDA computation may not be comparable to EBITDA or Adjusted EBITDA reported by other companies that interpret the definition of EBITDA differently than we do. Management believes Adjusted EBITDA to be a meaningful measure of a REIT’s performance because it is widely followed by industry analysts, lenders and investors and that it should be considered along with, but not as an alternative to, net income, cash flow, FFO and AFFO, as a measure of the Company’s operating performance.

                         
HERSHA HOSPITALITY TRUST
Adjusted EBITDA
(in thousands)
      Three Months Ended     Year Ended
      December 31, 2014     December 31, 2013     December 31, 2014     December 31, 2013
                         
Net income applicable to common shareholders     $ 5,106       $ 32,687       $ 52,899       $ 32,752  
(Loss) income allocated to noncontrolling interest       (84 )       963         1,016         335  
(Income) loss from unconsolidated joint ventures       (87 )       1,814         (693 )       1,835  
Loss (gain) on hotel acquisition       927         12         (12,667 )       (12,096 )
Development loan recovery                       (22,494 )        
Gain on disposition of hotel properties               (31,089 )       (7,067 )       (32,121 )
Loss from impairment of assets                       1,800         10,314  
Non-operating interest income       (44 )       (13 )       (104 )       (70 )
Distributions to Preferred Shareholders       3,589         3,589         14,356         14,611  
Interest expense from continuing operations       11,108         10,642         43,357         40,935  
Interest expense from discontinued operations               1,084         354         4,863  
Extinguishment of issuance costs upon redemption of Series A Preferred Shares                               2,250  
Income tax benefit       (1,879 )       (3,318 )       (2,685 )       (5,600 )
Deferred financing costs written off in debt extinguishment       26                 670         545  
Depreciation and amortization from continuing operations       16,802         14,628         69,167         55,784  
Depreciation and amortization from discontinued operations               13                 7,050  
Acquisition and terminated transaction costs       328         171         2,472         974  
Contingent consideration       1,000                 2,000          
Non-cash share based compensation expense       1,872         2,927         6,028         9,746  
Straight-line amortization of ground lease expense       122                 408         2  
State and Local tax expense related to reassessment of prior period assessment                       302         434  
                         
Adjusted EBITDA from consolidated hotel operations       38,786         34,110         149,119         132,543  
                         
Income (loss) from unconsolidated joint venture investments       87         (1,814 )       693         (1,835 )
Add:                        
Impairment of investment in unconsolidated joint ventures               1,813                 1,813  
Depreciation and amortization of purchase price in excess of historical cost       143         147         570         596  

Adjustment for interest in interest expense, depreciation and amortization of unconsolidated joint ventures

      3,075         3,527         12,124         12,898  
                         
Adjusted EBITDA from unconsolidated joint venture operations       3,305         3,673         13,387         13,472  
                         
Adjusted EBITDA     $ 42,091       $ 37,783       $ 162,506       $ 146,015  
                         

Hotel EBITDA

Hotel EBITDA is a commonly used measure of performance in the hotel industry for a specific hotel or group of hotels. We believe Hotel EBITDA provides a more complete understanding of the operating results of the individual hotel or group of hotels. We calculate Hotel EBITDA by utilizing the total revenues generated from hotel operations less all operating expenses, property taxes, insurance and management fees, which calculation excludes Company expenses not specific to a hotel, such as corporate overhead. Because Hotel EBITDA is specific to individual hotels or groups of hotels and not to the Company as a whole, it is not directly comparable to any GAAP measure and should not be relied on as a measure of performance for our portfolio of hotels taken as a whole.