Two Private Equity Firms Buy Extended Stay America
Blackstone and Starwood Capital Group pay $6 billion for lodging company >>
by: Harvey Chipkin
Extended Stay America will be acquired by Blackstone Real Estate Partners and Starwood Capital Group, both private equity firms, for about $6 billion; the deal includes Extended Stay America’s paired-share real estate investment trust, ESH Hospitality. The 50/50 joint venture will acquire the Extended Stay America brand and its owned hotel portfolio, which at the end of 2020 totaled 563 properties. The boards of directors for both Extended Stay America and ESH Hospitality unanimously approved the deal, and the transaction is expected to be completed in the second quarter of 2021. Barry Sternlicht, CEO of Starwood Capital, said the extended stay hotel segment has continued to perform well despite the pandemic. He said the purchasers are “excited” about ESA’s growth opportunities as restrictions ease. Tyler Henritze, head of US acquisitions for Blackstone, said Extended Stay America is positioned for long-term growth, adding, “We helped create this company nearly 20 years ago, and believe our expertise puts us in a unique position to add long-term value.” Blackstone previously bought the hotel company in 2004, then sold it in 2007.
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