US Lodging REITs: History, Structure & Performance

Since their introduction to the public in the early 1960s, Real Estate Investment Trusts (REITs) have become a significant force in the global equity marketplace. In fact, it has been noted that REITs have become the third largest asset class available to investors, behind stocks and bonds. In recent years, one burgeoning sub-sector of the US equity REIT market has been the lodging or hotel sub-sector. Although hotel REITs existed from as early as 1969, they did not appeal to investors as viable investment vehicles until their re-introduction to the public in 1993. Since then, hotel REITs have grown significantly both in terms of numbers-from 2 at the start of 1993, to a total of 11 at the end of 2007, and capitalization, from $100 million to an estimated equity market capitalization in excess of $21 billion. This work documents the history and structure of US REITs. It also examines the performance of US lodging REITs over a thirteen year period.