The two investment firms agreed to evenly split ownership in the largest lodging-related acquisition during the pandemic
Blackstone Group Inc. and Starwood Capital Group have agreed to acquire hotel owner and operator Extended Stay America Inc. for $6 billion, a bet that a rare bright spot for the lodging industry during Covid-19 can shine brighter as the U.S. emerges from the pandemic.
The companies said details of the deal, which real-estate executives say is the largest sale in the hotel sector during the Covid-19 period, will be released Monday.
Extended Stay is a midprice hotel chain that focuses on lodging for guests interested in staying for weeks or longer, offering kitchen facilities and more space than a typical hotel room. During the pandemic, its rooms and suites attracted essential workers, healthcare professionals and others who needed to travel.
That business helped Extended Stay achieve a 74% occupancy rate last year, Blackstone said. The average occupancy rate across all U.S. hotels was 44%, according to hotel data-tracking firm STR.
Now, as vaccinations roll out, hiring increases and more Americans think about traveling again, Blackstone and Starwood believe a different breed of customer will fill beds in Extended Stay’s properties with the economy bouncing back. This group includes construction workers, contractors and professionals such as lawyers and consultants.
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