La Quinta Holdings President and CEO Keith Cline shared his company’s rationale for potentially spinning its owned assets into a real estate investment trust, and why a select-service-focused REIT would be unique.
DALLAS—La Quinta Holdings President and CEO Keith Cline is excited about the possibilities of a real estate investment trust composed of his company’s owned assets.
After announcing the possibilities of a REIT spinoff in January, La Quinta officials have been relatively quiet about the prospect. But Cline said that could change in the near future with an expected second-quarter SEC filing.
The company wholly owns 321 properties, with one joint venture and 566 franchised properties.
Speaking with Hotel News Now from the La Quinta brand conference this week, Cline shared his company’s rationale for a spinoff, which would provide investors the option of keying in on either the company’s franchising and management division or its owned assets.
Cline said there’s no other REIT that fits the niche that a La Quinta REIT would.
“Most of our hotels are upper midscale. We’re also in the midscale space,” he said. “To have a REIT investment out (there) that is solely focused on that space, initially, is interesting because customers are migrating there because of the price-value proposition of this place in the lodging industry, and investors are migrating there from a development standpoint because of the cash-on-cash returns.”
For more on the possible spinoff and impressions from La Quinta’s conference, watch the video below.