Select-service hotel real estate investment trust CorePoint Lodging will "explore strategic alternatives" including a potential company sale to maximize value for shareholders, according to a business update issued Tuesday.
The company has been executing a disposition strategy for noncore assets since March 2019.
"We have created substantial value through the execution of our ... disposition strategy," President and CEO Keith Cline said in the release. "Having addressed over 80% of the 210 hotels we identified as noncore, and given the strong market interest in our assets, the Board has determined now is the proper time to explore strategic alternatives to fully maximize value for our stockholders."
The release also states that CorePoint's Board of Directors "intends to consider a full range of available strategic alternatives to maximize stockholder value, including a potential sale of the company or other transactions."
The REIT sold 25 noncore hotels in the second quarter of 2021 for a combined gross sales price of $143 million. An additional 36 hotels are under contract and expected to fetch approximately $220 million in gross proceeds.
In the first quarter of 2021, CorePoint closed on the sale of nine noncore hotels for $42 million.
According to the business update, the REIT currently owns 175 hotels.
In March, Cline told Hotel News Now's Danielle Hess in a video interview that the company's goal was to achieve a core portfolio of 105 hotels.
At that time, he said the company did see opportunity "to become a consolidator" in the future, adding new brands beyond its La Quinta flags managed by Wyndham Hotel & Resorts.
"Diversifying as we grow would absolutely be a big part of [the acquisition strategy], but in the meantime, we certainly have an excellent strategy right now that's driving shareholder value through our disposition program," he said in March.
The company used proceeds from its second-quarter sales to repay $125 million in CMBS debt. As of June 30, the company has $564 million in outstanding CMBS debt.
Strategic alternatives may include a sale of the company or other transactions, and no set timetable is in place, according to the statement.
The company will report its full second-quarter financial results on August 5.