The new company will be known as CorePoint Lodging and will take La Quinta Holdings into an asset-light model

IRVING, Texas, July 26, 2017 — La Quinta Holdings Inc. (the "Company") (NYSE:LQ) announced that a Form 10 Registration Statement was filed today with the U.S. Securities and Exchange Commission (“SEC”) with respect to the previously announced planned separation of its real estate business, which is to be named CorePoint Lodging Inc. (“CorePoint Lodging” or “CorePoint”) from its franchise and management businesses (“new La Quinta” or “post-spin La Quinta”) creating two distinct, publicly traded companies.

The registration statement provides information regarding the business, strategy and historical financial results of the deemed predecessor entity to CorePoint Lodging, as well as further details on the anticipated terms of license and management agreements between CorePoint and new La Quinta following the planned spin-off. The Company is providing supplemental financial information in the tables below and in an updated investor presentation published on its investor relations website ( CorePoint Lodging expects to update its registration statement in subsequent amendments as additional information on the transactions is finalized prior to the separation.

“The filing of CorePoint Lodging’s Form 10 is an important next step as we execute against our key strategic initiatives and drive value for our stakeholders,” said Keith Cline, La Quinta Holdings Inc.’s President and Chief Executive Officer. “We believe this separation will result in greater strategic clarity, with distinct management teams that can fully activate and run the respective businesses. In addition, we expect this will allow us to unlock growth opportunities that are embedded within each business and take advantage of capital market and tax efficiencies. We look forward to completing this spin transaction, realizing significant benefits for both companies and continuing to generate long term value for La Quinta’s shareholders.”

The New La Quinta: A Market-Leading Asset-Light, Fee-Based Franchise and Management Business

Following the spin transaction, the new La Quinta will continue to benefit from the unique growth opportunities that currently exist within its franchise and management businesses. New La Quinta expects to actively capitalize on the embedded growth opportunity of a large and growing pipeline, strong interest from developers in expanding the La Quinta brand into the more than 30% of U.S. markets where the brand is not yet represented, and a highly scalable property management platform.

As a stand-alone company, post-spin La Quinta’s Total Adjusted EBITDA for full year 2017 is estimated to be between $110 million and $115 million, including fee revenue under ongoing franchise and management agreements with CorePoint.

As part of the spin transaction, it is expected that new La Quinta will enter into amended and restated franchise and management agreements with CorePoint Lodging. These agreements are expected to provide that CorePoint Lodging will pay new La Quinta a management fee of 5.0% of gross hotel revenues in return for day-to-day management of its hotels, and a royalty fee of 5.0% of gross room revenues. The management agreements are expected to have an initial term of 20 years with two additional 5 year renewal options, and the franchise agreements are expected to have an initial term of 20 years with one 10 year renewal option.

CorePoint Lodging Inc.: Strong Hotel Portfolio with Significant Potential

Following the spin transaction, CorePoint Lodging expects to qualify and elect to be treated as a Real Estate Investment Trust (“REIT”) for federal income tax purposes. CorePoint Lodging expects to be the only publicly-traded U.S. lodging REIT strategically focused on serving the midscale and upper-midscale select-service segments, offering a geographically diverse portfolio of hotels with significant underlying real estate value. CorePoint Lodging offers attractive cash flow characteristics with a strong portfolio consisting of 316 hotels, excluding three hotels held for sale, with approximately 40,500 rooms located in attractive U.S. locations, including 32%, of its rooms located within the Top 25 markets as defined by Smith Travel Research (STR). The hotel portfolio contains assets that are well-positioned competitively within their markets, located near major employment centers, airports and transportation corridors. In addition, CorePoint Lodging will benefit from the continuation of a long-standing and mutually beneficial relationship with La Quinta, a highly-recognized and growing brand with a 49-year history of operating select-service hotels.

As a stand-alone public company, CorePoint’s Total Adjusted EBITDA for the full year 2017 is estimated to be between $200 million and $215 million. CorePoint Lodging will have significant scale and plans to grow and enhance its portfolio primarily within the highly desirable midscale and upper-midscale select-service lodging segments.

During 2016, La Quinta identified approximately 50 hotels that will be part of CorePoint’s portfolio that, with the appropriate scope of capital investment and renovation, have the opportunity to be repositioned upward within their respective markets, capturing additional occupancy and rate. Beginning in the fourth quarter of 2016 and continuing through 2017, La Quinta expects to invest more than $180 million in these assets with a focus on enhancing guestrooms, expanding public areas and upgrading exterior elements. With the majority of these renovations scheduled to be completed throughout the second half of 2017, CorePoint Lodging will be a primary beneficiary of these strategic investments by La Quinta.

Subsequent to the spin transaction, CorePoint Lodging’s focus will be to generate attractive long-term total returns by enhancing the value of its properties and utilizing its scale to efficiently allocate capital while maintaining a strong and flexible balance sheet.


Subject to market conditions, post-spin La Quinta and CorePoint Lodging each expect to complete one or more financing transactions concurrent with or prior to the completion of the spin-off, including the refinancing of substantially all of La Quinta’s existing indebtedness. These financing transactions are expected to be completed at market appropriate terms, including levels of leverage (approximately 3.5x to 4.5x of trailing twelve month Total Adjusted EBITDA for new La Quinta and approximately 5.5x to 6.5x of trailing twelve month Total Adjusted EBITDA for CorePoint). There can be no assurances that any such financing transactions will be completed in the timeframe or size indicated or at all.

Transaction Summary

La Quinta plans to execute a spin-off transaction of its real estate business, CorePoint Lodging, that will be taxable at both the corporate and shareholder levels, with the intention that CorePoint Lodging will elect REIT status at the earliest practical date. This spin transaction will be effected through a distribution of all of the outstanding shares of CorePoint Lodging’s common stock to existing La Quinta shareholders as of the applicable record date. Those shareholders would then own shares in both companies following the completion of the transaction. La Quinta’s franchise and management businesses will continue to operate within the current La Quinta Holdings Inc. entity, and will maintain the NYSE ticker symbol LQ.

Completion of the spin-off transaction is subject to a number of conditions, including, among others, declaration of effectiveness of CorePoint’s Form 10 Registration Statement filed with the SEC, and other customary matters. Approval by La Quinta’s shareholders is not required for completion of the spin-off transaction, although La Quinta’s shareholders have authorized a reverse stock split of La Quinta’s common stock in connection with the spin-off.

A copy of the Form 10 Registration Statement is available for review at under the name CorePoint Lodging Inc., and at La Quinta’s investor relations website

J.P. Morgan is acting as financial advisor to La Quinta Holdings Inc. Simpson Thacher & Bartlett LLP is acting as legal advisor.