Inland American Real Estate Trust, Inc. announced a preliminary registration statement on Form 10 was filed with the Securities and Exchange Commission outlining the details of a potential plan to spin off a significant portion of Inland American’s lodging portfolio into a standalone, publicly traded company to be called Xenia Hotels & Resorts, Inc. (“Xenia,” pronounced “Zeen-yah”). Xenia intends to apply to list its shares of common stock on the New York Stock Exchange under the symbol “XHR.” Xenia Hotels & Resorts, Inc. was formerly known as Inland American Lodging Group, Inc.
Upon completion of the proposed spin-off, Xenia will be a self-managed REIT headquartered in Orlando, Florida focused solely on the lodging sector. It is expected to own 46 hotels, comprising 12,636 rooms, across 19 states and the District of Columbia, and a majority interest in two hotels under development. Xenia will own and continue to invest primarily in premium full service, lifestyle and urban upscale hotels in the top 25 U.S. lodging markets and key leisure destinations throughout the United States, with a particular focus on urban and densely populated suburban markets with multiple demand generators and high barriers to entry. The company’s portfolio will include premium brands such as Marriott®, Hilton®, Hyatt®, Starwood®, Kimpton®, Aston®, Fairmont® and Loews®.
Xenia will continue to be led by Marcel Verbaas, its President and Chief Executive Officer and a member of Xenia’s board of directors. Since 2007, Mr. Verbaas and his team have managed the lodging assets for Inland American and have overseen the acquisition of more than 50 hotels, including all but two properties that will be part of Xenia’s initial portfolio. Mr. Verbaas and his senior management team have an average tenure in the lodging industry of 26 years.
“We are pleased to announce our intent to spin off Xenia Hotels & Resorts as a standalone, publicly traded company,” said Thomas P. McGuinness, President of Inland American. “Over the past 18 months, Inland American has been implementing its long-term strategy of focusing our portfolio into three asset classes – lodging, multi-tenant retail and student housing. By doing so, we believed we would enhance long-term stockholder value and position Inland American to explore various strategic alternatives designed to provide liquidity events for our stockholders. We believe the potential spin-off is an important and significant step toward achieving these goals.”
Mr. Verbaas added, “Xenia Hotels & Resorts will have a premium collection of properties affiliated with some of the strongest brands in the lodging industry. These assets have performed well as part of Inland American’s portfolio, delivering strong cash flows and attractive returns, and as a standalone company, Xenia will have the additional strategic and financial flexibility to continue delivering growth and creating stockholder value.”
Upon listing, Xenia believes it will be a well-capitalized and well-positioned company able to deliver both internal growth through active and focused asset management of existing hotels and external growth through acquisitions that meet Xenia’s investment criteria. As a standalone company dedicated to investments in premium full service, lifestyle and urban upscale hotels, Xenia believes it will be well positioned to effectively grow its business through operational flexibility, efficient deployment of resources and quick decision-making based solely on the needs of Xenia’s business. Xenia will also have direct access to the capital markets to issue equity or debt securities, and the flexibility to create a more diverse capital structure tailored to its strategic goals.
Inland American is also currently marketing for sale their remaining suburban select service hotels that are currently overseen by the Xenia team. More information will be provided if a transaction is executed.