Commitments and Contingencies At September 30, 2018 , we were not involved in any material litigation. Various claims and lawsuits arising in the normal course of business are pending against us, including liens for which we may obtain a bond, provide collateral or provide an indemnity, but we do not expect the results of such proceedings to have a material adverse effect on our consolidated financial position, results of operations or cash flows. Hotel Management Agreements As of September 30, 2018 , our Consolidated Hotel properties were operated pursuant to long-term management agreements with 12 different management companies, with initial terms ranging from five to 30 years . For hotels operated with separate franchise agreements, each management company receives a base management fee, generally ranging from 1.5% to 3.5% of hotel revenues. Four of our management agreements contain the right and license to operate the hotels under specified brands; no separate franchise agreements exist and no separate franchise fee is required for these hotels. The management agreements that include the benefit of a franchise agreement incur a base management fee ranging from 3.0% to 3.5% of hotel revenues. The management companies are generally also eligible to receive an incentive management fee, which is typically calculated as a percentage of operating profit, either (i) in excess of projections with a cap or (ii) after the owner has received a priority return on its investment in the hotel. We incurred management fee expense, including amortization of deferred management fees, of $4.5 million and $3.2 million for the three months ended September 30, 2018 and 2017 , respectively, and $14.0 million and $13.5 million for the nine months ended September 30, 2018 and 2017 , respectively. Franchise Agreements As of September 30, 2018 , we had 11 franchise agreements with Marriott-owned brands, three with Hilton-owned brands, one with an InterContinental Hotels-owned brand and one with a Hyatt-owned brand related to our Consolidated Hotels. The franchise agreements have initial terms ranging from 15 to 25 years (excluding four hotels that receive the benefits of a franchise agreement pursuant to management agreements, as discussed above). Also, three of our Consolidated Hotels are independent and not subject to franchise agreements. Our franchise agreements grant us the right to the use of the brand name, systems and marks with respect to specified hotels and establish various management, operational, record-keeping, accounting, reporting and marketing standards and procedures that the licensed hotel must comply with. In addition, the franchisor establishes requirements for the quality and condition of the hotel and its furniture, fixtures and equipment, and we are obligated to expend such funds as may be required to maintain the hotel in compliance with those requirements. Typically, our franchise agreements provide for a license fee, or royalty, of 3.0% to 6.0% of room revenues and, if applicable, 2.0% to 3.0% of food and beverage revenue. In addition, we generally pay 1.0% to 4.5% of room revenues as marketing and reservation system contributions for the system-wide benefit of brand hotels. Franchise fees are included in sales and marketing expense in our consolidated financial statements. We incurred franchise fee expense, including amortization of deferred franchise fees, of $3.9 million and $4.4 million for the three months ended September 30, 2018 and 2017 , respectively, and $12.3 million and $14.1 million for the nine months ended September 30, 2018 and 2017 , respectively. Capital Expenditures and Reserve Funds With respect to our hotels that are operated under management or franchise agreements with major international hotel brands and for most of our hotels subject to mortgage loans, we are obligated to maintain furniture, fixtures and equipment reserve accounts for future capital expenditures at these hotels, sufficient to cover the cost of routine improvements and alterations at the hotels. The amount funded into each of these reserve accounts is generally determined pursuant to the management agreements, franchise agreements and/or mortgage loan documents for each of the respective hotels and typically ranges between 3% and 5% of the respective hotels total gross revenue. As of September 30, 2018 and December 31, 2017 , $37.8 million and $32.9 million , respectively, was held in furniture, fixtures and equipment reserve accounts for future capital expenditures, and is included in Restricted cash in the consolidated financial statements. Renovation Commitments Certain of our hotel franchise and loan agreements require us to make planned renovations to our hotels. Additionally, from time to time, certain of our hotels may undergo renovations as a result of our decision to upgrade portions of the hotels, such as guestrooms, public space, meeting space, and/or restaurants, in order to better compete with other hotels and alternative lodging options in our markets. At September 30, 2018 , we had various contracts outstanding with third parties in connection with the renovation of certain of our hotels. The remaining commitments under these contracts at September 30, 2018 totaled $23.3 million . Funding for a renovation will first come from our furniture, fixtures and equipment reserve accounts, to the extent permitted by the terms of the management agreement. Should these reserves be unavailable or insufficient to cover the cost of the renovation, we will fund all or the remaining portion of the renovation with existing cash resources, proceeds available under our Working Capital Facility and/or other sources of available capital. Ground Lease Commitments Three of our hotels are subject to ground leases. Scheduled future minimum ground lease payments during the remainder of 2018 , each of the next four calendar years following December 31, 2018 and thereafter are as follows (in thousands): Years Ending December 31, Total 2018 (remainder) $ 1,010 2019 4,111 2020 4,210 2021 4,312 2022 4,417 Thereafter through 2106 815,831 Total $ 833,891 For the three months ended September 30, 2018 and 2017 , we recorded rent expense of $1.2 million and $1.0 million respectively, both inclusive of percentage rents of $0.2 million , related to these ground leases, which are included in Property taxes, insurance, rent and other in the consolidated financial statements. For the nine months ended September 30, 2018 and 2017 , we recorded rent expense of $3.2 million and $2.9 million respectively, both inclusive of percentage rents of $0.6 million , related to these ground leases. Additionally, we recorded straight-line rent adjustment expense related to these ground leases of $1.7 million and $1.3 million for the three months ended September 30, 2018 and 2017 , respectively, and $4.3 million and $3.9 million for the nine months ended September 30, 2018 and 2017 , respectively.