Extended Stay America, Inc., headquartered in

Charlotte, North Carolina Charlotte ( ) is the List of municipalities in North Carolina, most populous city in the U.S. state of North Carolina and the county seat of Mecklenburg County, North Carolina, Mecklenburg County. The population was 874,579 at the 2020 United ...

, is the operator of an economy

apartment hotel An apartment hotel or aparthotel (also residential hotel or extended-stay hotel) is a serviced apartment complex that uses a hotel-style booking system. It is similar to renting an apartment, but with no fixed contracts and occupants can "check ...

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 A real estate investment trust (REIT, pronounced "reet") is a company that owns, and in most cases operates, income-producing real estate. REITs own many types of real estate, including office and apartment buildings, studios, warehouses, hos ...

and the owner of the hotels. As of 2022, there are 650+ Extended Stay America branded hotels.

History

Extended Stay America was founded on January 9, 1995 in

Fort Lauderdale, Florida Fort Lauderdale ( ) is a coastal city located in the U.S. state of Florida, north of Miami along the Atlantic Ocean. It is the county seat of and most populous city in Broward County, Florida, Broward County with a population of 182,760 at the ...

by George D. Johnson, Jr. and Wayne Huizenga, both former executives from Viacom and its subsidiary

Blockbuster LLC Blockbuster or Blockbuster Video is an American multimedia brand which was founded by David Cook in 1985 as a Small business, single home video video rental shop, rental shop, but later became a public store chain featuring video game rentals, D ...

. The first two Extended Stay America hotels opened in August 1995 in

Spartanburg, South Carolina Spartanburg is a city in and the county seat of Spartanburg County, South Carolina, United States. The city had a population of 38,732 as of the 2020 United States census, 2020 census, making it the List of municipalities in South Carolina, 11th ...

and

Marietta, Georgia Marietta is a city in and the county seat of Cobb County, Georgia, United States. At the 2020 census, the city had a population of 60,972. The 2019 estimate was 60,867, making it one of Atlanta's largest suburbs. Marietta is the fourth largest ...

. The company became a

public company A public company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock exchange or in over-the-counter (finance), over-the-counter markets. A public (publicly traded) co ...

via an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...

on December 14, 1995. Extended Stay America acquired the extended-stay hotel chain StudioPLUS on April 11, 1997. The company also developed the Crossland Economy Studios brand as a budget extended-stay hotel brand. The 47 unit Crossland brand was sold to Westmont Hospitality Group for $285 Million in December, 2015. In 2013, the company moved its headquarters from

to Charlotte, North Carolina.

The Blackstone Group Blackstone Inc. is an American alternative investment management company based in New York City. It was founded in 1985 as a mergers and acquisitions firm by Peter G. Peterson, Peter Peterson and Stephen A. Schwarzman, Stephen Schwarzman, who h ...

, a

private equity firm A private equity firm or private equity company (often described as a financial sponsor) is an investment management company that provides financial backing and makes investments in the private equity of a Startup company, startup or of an existin ...

, acquired Extended Stay America in May 2004 for

US$ The United States dollar (Currency symbol, symbol: Dollar sign, $; ISO 4217, currency code: USD) is the official currency of the United States and International use of the U.S. dollar, several other countries. The Coinage Act of 1792 introdu ...

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. 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. In June 2007, Blackstone sold Extended Stay Hotels to

the Lightstone Group The Lightstone Group is a privately held real estate investment company which owns and operates a diversified portfolio of multifamily, office, industrial, hotel, and retail properties. Lightstone has invested directly in individual real estate as ...

for US$8 billion. The deal, financed with US$7 billion of debt, was one of several multibillion-dollar hotel and casino sales made that year. The

Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.

decimated leisure and business travel and Extended Stay faced shortages in

liquidity Liquidity is a concept in economics involving the convertibility of assets and obligations. It can include: * Market liquidity In business, economics or investment, market liquidity is a market's feature whereby an individual or firm can quic ...

stemming from the

leveraged buyout A leveraged buyout (LBO) is the acquisition of a company using a significant proportion of borrowed money (Leverage (finance), leverage) to fund the acquisition with the remainder of the purchase price funded with private equity. The assets of t ...

by Lightstone. On June 15, 2009, Extended Stay America filed for

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...

protection under

Chapter 11 Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...

. Through

debtor-in-possession financing Debtor-in-possession financing or DIP financing is a special form of financing provided for companies in financial distress, typically during restructuring under corporate bankruptcy law (such as Chapter 11 bankruptcy in the US or CCAA in Canada). ...

, it was able to continue operating rather than to face

liquidation Liquidation is the process in accounting by which a Company (law), company is brought to an end. The assets and property of the business are redistributed. When a firm has been liquidated, it is sometimes referred to as :wikt:wind up#Noun, w ...

. 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. After its successful

reorganization A corporate action is an event initiated by a public company that brings or could bring an actual change to the debt securities— equity or debt—issued by the company. Corporate actions are typically agreed upon by a company's board of dire ...

, Extended Stay America emerged from bankruptcy in October 2010. 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. In April 2020,

acquired a 4.9% stake in the company and Starwood Capital Group acquired an 8.5% stake in the company. 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.

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.

References

External links

* {{Hotel chains Blackstone Inc. companies American companies established in 1995 Hotels established in 1995 Real estate companies established in 1995 Companies based in Charlotte, North Carolina Companies formerly listed on the Nasdaq Extended stay hotel chains Hospitality companies of the United States Private equity portfolio companies Real estate investment trusts of the United States 1995 initial public offerings 1995 establishments in Florida Companies that filed for Chapter 11 bankruptcy in 2009 2013 initial public offerings 2021 mergers and acquisitions