Private equity firms Blackstone Real Estate Partners and Starwood Capital Group have announced the acquisition of Extended Stay America. The deal, which is valued at about $6 billion, the Extended Stay America brand and its owned hotel portfolio, which at the end of 2020 totaled 563 properties.
The agreement also includes Extended Stay America’s paired-share real estate investment trust, ESH Hospitality.
The boards of directors for both Extended Stay America and ESH Hospitality unanimously approved the deal, which is expected to close in the second quarter of 2021.
The extended stay hotel segment has continued to perform well despite the pandemic, according to Barry Sternlicht, CEO of Starwood Capital. He said the purchasers in the 50/50 joint venture are “excited” about ESA’s growth opportunities as restrictions ease.
Earlier this month, Extended Stay America announced the launch of a new brand, Extended Stay America Premier Suites with a portfolio of more than 30 new-build and fully renovated properties with a footprint of properties concentrated in the Southeast and West Coast.
The company says it also plans to rebrand the remaining hotels in its portfolio as Extended Stay America Suites.
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.