April 18, 2007 / 12:55 AM / 12 years ago

UPDATE 2-Lightstone to buy Extended Stay Hotels for $8 bln

(Adds details, background)

NEW YORK, April 17 (Reuters) - Lightstone Group, a privately held real estate company, said on Tuesday it would buy Extended Stay Hotels from the Blackstone Group [BG.UL], a U.S. private equity firm, in a move to expand its property portfolio into the booming hotel and hospitality sector.

The latest in a line of multibillion-dollar hotel and casino takeovers would make Lightstone one of the leading players in the growing market for extended-stay lodging, which caters to guests who typically want to stay longer than a week.

Extended Stay is the largest owner of mid-price long-stay hotels in the United States, with 683 properties and about 76,000 units in 44 states and Canada. It operates under the brands Homestead Studio Suites, StudioPLUS Deluxe Studios, Extended Stay Deluxe, Extended Stay America and Crossland.

Lightstone, which owns commercial and residential real estate, will finance the deal with $1 billion in cash and $7 billion in debt, a spokesman said. The company expects the transaction to close in about two months.

Lightstone, based in Lakewood, New Jersey, has so far specialized in homes and business property, with about 18,000 residential units in its portfolio and about 30 million square feet of offices, shops and factories.

With a resurgence in travel demand and a relatively strong economy, the hotel and casino sector has grown rapidly in the last few years, triggering a bout of multibillion-dollar deals.

Earlier this month, a unit of Wall Street investment bank Morgan Stanley (MS.N) closed a deal to buy privately held CNL Hotels & Resorts Inc. in a transaction it said was worth $6.6 billion.

Harrah’s Entertainment Inc. HET.N, the world’s largest casino operator, is in the process of a $17.1 billion takeover by two private equity firms.

Blackstone — which is gearing up for a ground-breaking $4 billion initial public offering — has been active in the real estate business over the past few years. Earlier this year it took real estate firm Equity Office Properties Trust private in a deal worth $23 billion plus debt. It has since sold some of Equity Office’s property portfolio.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below