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Blackstone, Starwood pick up stakes in Extended Stay America
Both firms had sought control of the hotel chain years ago
Two of the largest real estate investors are funneling funds into an extended-stay hotel chain.
Barry Sternlicht’s Starwood Capital Group recently paid $136.8 million for an 8.5 percent stake, or about $9.05 per share, in Extended Stay America, the Wall Street Journal reported. And Blackstone Group picked up a 4.9 percent stake in the chain for about $6.50 a share, sources told the outlet.
Blackstone has experience with the hotel firm: The private investment group acquired it in 2004 for about $2 billion then sold the portfolio to Lightstone group for $8 billion in 2007, according to the Journal. Three years later, Blackstone and Starwood fought for control of the firm, working to emerge from bankruptcy. Blackstone ended up acquiring the chain again for about $3.9 billion then took it public in 2013.
While the coronavirus has crippled the hotel and travel industries, more affordable extended-stay brands are still seeing some customers, the Journal reported. For instance, while 9 percent of luxury hotels were occupied during the week ending April 11, economy-class hotels were about one-third full, according to data company STR.
Extended Stay withdrew its 2020 guidance in March but has yet to close properties because of the coronavirus, according to the Journal. It focuses on those who need temporary housing and workers, like those on construction sites, flight attendants or those in the healthcare field. [WSJ] — Mary Diduch