Choice may spin off hotel real estate assets

Maryland Watch

February 05, 1997

Choice Hotels International Inc. is considering spinning off its hotel real estate assets to shareholders in order to focus on its hotel management and franchising operations.

"Going forward, this business will be geared less toward real estate transactions and more on gaining market share" in hotel management, said Chief Executive Officer William Floyd, who spoke yesterday at the Montgomery Securities' Hospitality Conference in New York.

Before a spin-off, though, the Silver Spring-based company is working on a plan to package mortgage loans on its hotels and sell them as securities.

That transaction would raise $130 million, which would be used to pay back debt owed to its former parent company, Manor Care Inc., said James MacCutcheon, chief financial officer.

Choice Hotels was spun off last fall from Manor Care, a nursing home company.

Choice Hotels is the second largest franchiser of hotels in the world with 3,225 hotels and 272,372 rooms in 30 countries.

Its shares closed yesterday at $15.875, down 12.5 cents.

Pub Date: 2/05/97

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