Brookfield Asset Management is weighing the sale of a portfolio of extended-stay hotels for up to $1.5 billion, Bloomberg reported, citing people familiar with the matter.
The firm is reportedly working with an adviser in regards to a potential sale of its portfolio of WoodSpring Suites, which provides affordable short and medium-term hotel stays without many services or amenities.
The average length of stay is about 15 days, according to Bloomberg, significantly longer than the three-to-five day stays for other hotels, according to S&P Global Ratings analysts. In turn, the hotels are able to generate high margins.
In April, Brookfield negotiated a deal with Hospitality Investors Trust that gave the Toronto-based firm control of 100 hotels as part of a Chapter 11 filing. Brookfield was the largest investor in the trust.
The hotels are franchised by Choice Hotels.
News of the potential deal comes months after another extended-stay portfolio traded hands for a big price. Blackstone Group and Starwood Capital Group acquired the hotel chain for about $6 billion, at $19.50 per share. Both companies were previous investors in the hotel chain and the bid was later upped to $20.50 per share, a value of about $6.3 billion.
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Brookfield recently took its struggling real estate arm private. In an August letter to investors, CEO Bruce Flatt said the asset manager hopes to make $25 billion from its real estate portfolio.
The company paid $6.5 billion to buy out the outstanding shares of Brookfield Property Partners, pivoting from public trading to the private markets. In 2020, the firm reported net losses of $2 billion as the pandemic devastated the firm’s mall properties.
There were 281 WoodSpring Suites hotels as of June 30, 2020, according to an SEC filing.
[Bloomberg] — Holden Walter-Warner