Extended Stay America

Last updated
Extended Stay America, Inc.
FormerlyExtended Stay Hotels
Company type Private company (1995-2013, since 2021)
Public company (2013-21)
Nasdaq: STAY (2013-21)
Industry Hotels
FoundedAugust 1997 (1997-08) in Fort Lauderdale, Florida
Founders
Headquarters Charlotte, North Carolina, U.S.
Number of locations
650 hotels (2022)
Area served
 North America
Key people
Greg Juceam (CEO)
RevenueDecrease2.svg $1.218 billion (2019)
Decrease2.svg $0.165 billion (2019)
Total assets Increase2.svg $4.030 billion (2019)
Total equity Decrease2.svg $1.176 billion (2019)
Number of employees
1,800 (2019)
Website www.extendedstayamerica.com
Footnotes /references
[1]
An Extended Stay Deluxe hotel in Hillsboro, Oregon Extended Stay Deluxe Tanasbourne - Hillsboro, Oregon.JPG
An Extended Stay Deluxe hotel in Hillsboro, Oregon

Extended Stay America, Inc., headquartered in Charlotte, North Carolina, is the operator of an economy apartment hotel chain in the United States and Canada. Prior to June 2021, when the company was acquired by Blackstone Real Estate and the Starwood Capital Group, it was publicly traded as a "paired share" with ESH Hospitality, Inc., a real estate investment trust and the owner of the hotels. As of 2022, there are 650+ Extended Stay America branded hotels.

Contents

History

Extended Stay America was founded on January 9, 1995 in Fort Lauderdale, Florida by George D. Johnson, Jr. and Wayne Huizenga, both former executives from Viacom and its subsidiary Blockbuster LLC. [2] The first two Extended Stay America hotels opened in August 1995 in Spartanburg, South Carolina and Marietta, Georgia. [3]

The company became a public company via an initial public offering on December 14, 1995. [4]

Extended Stay America acquired the extended-stay hotel chain StudioPLUS on April 11, 1997. [5] The company also developed the Crossland Economy Studios brand as a budget extended-stay hotel brand. [6] The 47 unit Crossland brand was sold to Westmont Hospitality Group for $285 Million in December, 2015. [7]

In 2013, the company moved its headquarters from Spartanburg, South Carolina to Charlotte, North Carolina. [8]

The Blackstone Group, a private equity firm, acquired Extended Stay America in May 2004 for US$3.1 billion in cash and debt. At the time of the merger, Extended Stay America operated 475 hotels; Blackstone increased that number with the addition of 132 from Homestead Studio Suites. [9] [10] Homestead, which was founded by Security Capital in 1992, had been acquired by Blackstone in November 2001 for US$740 million. All of Blackstone's extended-stay hotels consisting of the Crossland, Extended Stay America, Homestead, StudioPlus, and, eventually, Extended Stay Deluxe brands were managed together by Extended Stay Hotels. [11]

In June 2007, Blackstone sold Extended Stay Hotels to the Lightstone Group for US$8 billion. [12] The deal, financed with US$7 billion of debt, was one of several multibillion-dollar hotel and casino sales made that year. [13]

The Great Recession decimated leisure and business travel and Extended Stay faced shortages in liquidity stemming from the leveraged buyout by Lightstone. On June 15, 2009, Extended Stay America filed for bankruptcy protection under Chapter 11. Through debtor-in-possession financing, it was able to continue operating rather than to face liquidation. [14]

In July 2010, an investment consortium made up of Blackstone, Paulson & Co., and Centerbridge Partners bought Extended Stay America through a bankruptcy auction for US$3.93 billion. [15]

After its successful reorganization, Extended Stay America emerged from bankruptcy in October 2010. [16]

A year after the bankruptcy, Blackstone was sued by creditors of Extended Stay America alleging that Blackstone "skimmed" US$2.1 billion off of the sale to Lightstone and knew that the amount of debt would have been unsustainable for the hotel chain; Blackstone settled the lawsuit in June 2013 for US$10 million. [17]

In April 2020, The Blackstone Group acquired an 4.9% stake in the company and Starwood Capital Group acquired an 8.5% stake in the company. [18] The company went private in June 2021 when Blackstone Real Estate and the Starwood Capital Group acquired the remaining shares and the company was delisted from Nasdaq. [19]

Properties

As of December 31, 2019, the company owned and operated 557 hotel properties consisting of approximately 61,900 rooms and franchised or managed 73 hotel properties consisting of approximately 7,500 rooms. [1]

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References

  1. 1 2 "Extended Stay America, Inc. 2019 Form 10-K Annual Report". U.S. Securities and Exchange Commission.
  2. ↑ Form S-1 1996, pp. 3–4.
  3. ↑ Form S-1 1996, p. 21.
  4. ↑ Form S-1 1996, p. 12.
  5. ↑ "Extended Stay America, Inc". Form 8-K . U.S. Securities and Exchange Commission. April 11, 1997. p. 2. CIK 0001002579 – via EDGAR.
  6. ↑ "Extended Stay America, Inc". Form 10-K . U.S. Securities and Exchange Commission. March 4, 1997. p. 10. CIK 0001002579 – via EDGAR.
  7. ↑ "Extended Stay America unloads Crossland hotels". www.travelweekly.com. Retrieved 2022-02-16.
  8. ↑ Gailey, Alex (June 14, 2017). "Extended Stay America settles lawsuit over trade secrets against WoodSpring Hotels". American City Business Journals .
  9. ↑ "Extended Stay America, Inc". Form 8-K. U.S. Securities and Exchange Commission. May 11, 2004. CIK 0001002579 – via EDGAR.
  10. ↑ "The Blackstone Group Completes Acquisition of Extended Stay America, Inc" (Press release). The Blackstone Group. 11 May 2004.
  11. ↑ "Security Capital Sells Homestead Village to Blackstone Affiliate for $740 Million" (Press release). The Blackstone Group. 20 November 2001.
  12. ↑ "The Lightstone Group Closes $8 Billion Acquisition of Extended Stay Hotels From The Blackstone Group" (Press release). The Blackstone Group. 12 June 2007.
  13. ↑ "Lightstone to buy Extended Stay Hotels for $8 bln". Reuters . April 17, 2007.
  14. ↑ Nadgir, Santosh (June 15, 2009). "Debt-strapped Extended Stay files for bankruptcy". Reuters .
  15. ↑ Emery, Chelsea (July 20, 2010). "US judge backs Extended Stay's reorganization plan". Reuters .
  16. ↑ "Extended Stay Emerges From Chapter 11 After Buyout". CNBC. Associated Press. 8 October 2010.
  17. ↑ Hals, Tom (June 20, 2013). "Blackstone settles Extended Stay lawsuit for $10 million". Reuters .
  18. ↑ "Blackstone, Starwood pick up stakes in Extended Stay America". The Real Deal . April 21, 2020.
  19. ↑ "Blackstone, Starwood Capital complete acquisition of Extended Stay America". Hotel Business. June 16, 2021.
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