Sunday PropTech Acquiring, Repositioning Dozens of Hotels

A proptech firm backed by the likes of Airbnb and SoftBank is acquiring and repositioning dozens of hospitality properties across the country.

Sunday PropTech landed $286 million in financing for a 38-hotel portfolio, the Commercial Observer reported. Citigroup provided the vast majority of the debt, $242 million, while Intervest Capital Partners subsidiary Access Point provided the other $44 million via mezzanine debt.

The total capitalization of the portfolio reaches $375 million. It encompasses more than 4,000 rooms.

The firm purchased eight hotels from a joint venture of Blackstone and Starwood Property Group in November for $31 million. The acquisition cost of the remaining 30 hotels wasn’t disclosed, but Sunday PropTech closed on the deal this month.

Sunday PropTech is teaming with G6 Hospitality to reposition the portfolio, rebranding the properties from Extended Stay America Select Suites to Studio 6 hotels. The hotels are largely in the Southeast, though there are also properties in New York and California, among other states.

“By combining disciplined operations, brand repositioning to Studio 6, and technology-led efficiencies, we believe we can help the ownership and investors unlock significant value across the portfolio in a short period of time,” G6 chief executive officer Sonal Sinha said in a statement.

The extended-stay segment has seen its share of major deals in recent years. Blackstone and Starwood acquired Extended Stay America for about $6 billion in 2021, paying $19.50 per share for the hotel operator, following previous investments in the hotel chain by each company.

But while luxury hotels are setting record room rates due to high-end leisure demand, extended stay, midscale and economy operators have been slower to rebound in recent years as cost-conscious travelers resist spending.

Sunday PropTech is under the same Prism umbrella as Belvilla, an Amsterdam-based firm making its own moves in the United States. Belvilla recently acquired the rights to 10 of the 79 properties available through Sonder’s Chapter 7 liquidation process.

— Holden Walter-Warner