New Jersey-based private real estate company The Lightstone Group is acquiring US hospitality chain Extended Stay Hotels from The Blackstone Group for $8 billion (€5.9 billion).
An active investor in the hospitality space, Blackstone acquired the Extended Stay portfolio via a number of different acquisitions. Its largest purchase was the acquisition of Extended Stay America, which it bought in 2004 for $1.9 billion and the assumption of $1.1 billion in debt. I
t combined the 485 properties in the Extended Stay portfolio with assets that it had acquired a few years earlier under the Homestead Studio Suites brand. In 2004 and 2005, Blackstone also added a number of properties to the Extended Stay portfolio that it had purchased via the acquisition of other hospitality companies, including Prime Hospitality.
“This was a perfect opportunity for The Lightstone Group to expand its growing portfolio into the hotel industry and acquiring Extended Stay Hotels immediately puts us in a leadership position within the extended-stay market,” David Lichtenstein, chairman and CEO of Lightstone, said in a statement.
Extended Stay Hotels is the largest owner of mid-price, extended-stay lodging properties in the US with 683 hotels and around 76,000 rooms in 44 states and Canada. The company has properties under the Extended Stay Deluxe, Extended Stay America, Homestead Studio Suites, StudioPlus and Crossland banners.
Since the economic slowdown earlier in the decade, the real estate arm of Blackstone has been active in the hotel space: It has acquired stakes in other lodging chains like La Quinta and Wyndham International, as well as the Meristar REIT and the Rihga Royal in New York City.
In 2005, Lightstone acquired Chicago-based office REIT Prime Group Realty Trust for $890 million. The Extended Stay purchase is reportedly its first in the lodging industry.
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