BLACKSTONE Group plans to file for an initial public offering of its La Quinta Inns & Suites hotel chain rather than sell the company on the private market.
Blackstone, which had started a sales process for La Quinta and received initial bids last month, is betting it can get higher returns through an IPO.
Blackstone, the world's largest alternative-asset manager, is taking some of its biggest real estate holdings public as US stocks rise to records and hotel occupancies climb. La Quinta, valued at about $4.5bn (€3.3bn), would be the New York- based company's third lodging IPO.
In addition to Extended Stay, Hilton Worldwide Holdings is poised for a $2.25bn offering next month that would set a record for the industry.
"It's an advantageous point in the hotel cycle," said Drew Babin, senior lodging analyst at CBRE Clarion Securities, a Radnor, Pennsylvania-based firm that manages about $20bn.
"Supply growth is limited and we expect three more years of above-average gains in rates and occupancy."
Peter Rose, a spokesman for Blackstone, declined to comment on the IPO plans.
La Quinta, based in Irving, Texas, may file for the stock offering before the end of the year, said the people with knowledge of its plans. Blackstone hired JPMorgan Chase and Morgan Stanley earlier this year to explore a sale or IPO of the company, and received first-round offers in early October.
La Quinta operates more than 800 mid-price, limited-service hotels with about 80,000 rooms in the US, Canada and Mexico. Select-service hotels offer limited food and beverage and other services. (Bloomberg)