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HLT spinoff of real estate assets

GregT

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http://www.forbes.com/sites/joecornell/2015/12/29/hilton-hlt-to-spin-off-real-estate-assets/

"The parent will be able to take advantage of the increasing growth opportunities within the timeshare industry. "

It looks like they plan on expanding and investing in TS business with the cash they get from the spinoff.

Good for us.

Thanks for posting this -- interesting that they are keeping the timeshare business and not spinning it off (yet) like the others have.

Best,

Greg
 

CalGalTraveler

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http://www.forbes.com/sites/joecornell/2015/12/29/hilton-hlt-to-spin-off-real-estate-assets/

"The parent will be able to take advantage of the increasing growth opportunities within the timeshare industry. "

It looks like they plan on expanding and investing in TS business with the cash they get from the spinoff.

Good for us.

I understand why they are doing this with the hotels, however I am not quite understanding what is meant by the timeshare properties.

What exactly are they spinning off if we are the owners of the property who own deeds? I am curious how can they do this without approval of the owners or at least a vote of the governing board of each property?
 

GregT

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I understand why they are doing this with the hotels, however I am not quite understanding what is meant by the timeshare properties.

What exactly are they spinning off if we are the owners of the property who own deeds? I am curious how can they do this without approval of the owners or at least a vote of the governing board of each property?

They are taking the real estate that is owned by Hilton (the hotels) and spinning them off into a Real Estate Investment Trust. But they are keeping the timeshare system (the management of the properties, and sales of new properties) for the moment.

Will be interesting to see if they are done.

Best,

Greg
 

SmithOp

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I understand why they are doing this with the hotels, however I am not quite understanding what is meant by the timeshare properties.



What exactly are they spinning off if we are the owners of the property who own deeds? I am curious how can they do this without approval of the owners or at least a vote of the governing board of each property?


They will continue selling the intervals they own, none of the timeshare properties are going into the REIT, only the hotels.

"Under the timeshare business the company will continue to market and sell timeshare intervals, operate timeshare resorts and a timeshare membership club and provide consumer financing."


Sent from my iPad Mini 4 using Tapatalk
 

CalGalTraveler

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They will continue selling the intervals they own, none of the timeshare properties are going into the REIT, only the hotels.

"Under the timeshare business the company will continue to market and sell timeshare intervals, operate timeshare resorts and a timeshare membership club and provide consumer financing."


Sent from my iPad Mini 4 using Tapatalk

Thanks for clarifying. I read this a bit too quickly and did not catch that.

I am not sure what they could possibly put into the REIT from the timeshare group given that they don't own the deeds to the units and the units they own are actually inventory they need to sell as a real estate transaction.
 

jestme

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Thanks for clarifying. I read this a bit too quickly and did not catch that.

I am not sure what they could possibly put into the REIT from the timeshare group given that they don't own the deeds to the units and the units they own are actually inventory they need to sell as a real estate transaction.

I'm not a lawyer, but I do know that as "owners", we only own the units. We do not own the halls, inside or outside walls, roof, etc. although we are responsible for maintaining them to protect our units. I'm sure someone can correct me, but I believe those are owned by the HOA, which in all cases are currently majority controlled by Hilton people.
I am also not sure what they will do with the Kalia building, as it is part hotel and part timeshare, all in one building.
 

Maverick1963

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I'm not a lawyer, but I do know that as "owners", we only own the units. We do not own the halls, inside or outside walls, roof, etc. although we are responsible for maintaining them to protect our units. I'm sure someone can correct me, but I believe those are owned by the HOA, which in all cases are currently majority controlled by Hilton people.
I am also not sure what they will do with the Kalia building, as it is part hotel and part timeshare, all in one building.

Hello, Jestme. If you own a HGVC interval, you have your share of land and building. As part of MF, all owners pay property tax. Kalia tower is owned by both of timeshare owners and Hilton. Hilton should be able to put their ownership of Kalia into REIT if they would want to.

I believe articles from FT and Bloomberg would give us a little more information about the move.
http://www.ft.com/cms/s/0/46ba06ec-a43f-11e5-8218-6b8ff73aae15.html#axzz3voqDNLe2
http://www.bloomberg.com/news/artic...p-5-2-after-report-of-spinoff-plan-for-hotels

I do not know the details regarding corporate tax and the overall REIT scheme. But in a nutshell, this REIT spin-off is just like timeshare business. That means Hilton lets someone else own real estate property, makes their asset lighter and focuses on hotel management. From those articles, it is clear that Hilton will be able to reduce federal tax. And Hilton is only following actions made by asset heavy companies before they are banned by legislation.
 
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