NEW YORK CITY—Following up on a letter from activist shareholder Jonathan Litt, FelCor Lodging Trust Inc. said Friday it's in negotiations to sell its Morgans and Royalton hotels in New York. Litt, the founder and CIO of Land and Buildings Management, had called for Irving, TX-based FelCor to sell all three of its New York properties as part of a plan to enhance strategic value, which could include a sale of the company

Locally-based Litt wrote in a letter to FelCor's board earlier this week that he believes the lodging REIT is "uniquely positioned in the hotel REIT sector to outperform and close the substantial gap between its share price and net asset value. The company's suburban, airport and resort locations are insulated from elevated supply growth in the gateway markets, positioning the Company for superior growth compared to its lodging REIT peers in 2016."

That being said, Litt added, "strategically the Company is at a crossroads, as the stock is down approximately 50% from 2015 highs and continues to trade well below current private market real estate value taking into account real-time market conditions. We believe FelCor must pursue a value-enhancing strategy that will significantly lower leverage, increase NAV per share and crystalize value through a sale of all or part of the company."

FelCor's board issued a statement Thursday afternoon saying it welcomes Land and Buildings' input. "In fact, we began implementing virtually the same plan last fall. We have sold 40 assets since 2010, raising proceeds of close to $1 billion, and are already in the process of selling Morgans, Royalton and some or all of the Knickerbocker, as well as two other hotels, and using the proceeds to reduce debt and repurchase shares under our previously announced $100 million stock buyback program."