Blackstone Real Estate Partners and Starwood Capital Group have partnered to acquire economy hotel chain Extended Stay America Inc. for $6 billion.
The deal, under which ownership of the company will be split 50-50, is on track to close by the second quarter of this year.
Headquartered in Charlotte, Extended Stay America operates 650 properties across the U.S. Around 564 of those hotels are owned by the group's real estate investment trust subsidiary, ESH Hospitality, with the remaining 86 franchised under the Extended Stay America brand.
Extended Stay America's accommodations feature fully equipped kitchens with full-size fridges, on-site laundry facilities and other amenities designed to cater to longer-stay guests.
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The takeover comes as data is showing the economy, extended-stay category is faring better than other hotel segments throughout the pandemic. According to STR, the segment saw a RevPAR decline of just 5.4% in the U.S. in 2020, compared with a drop of 25.8% and 41.6% for the midscale and upscale extended-stay tiers, respectively.
"Extended Stay has demonstrated resilience over the past year despite persistent challenges due to government lockdowns and travel restrictions," Starwood Capital CEO Barry Sternlicht said in a statement. "We are excited about the company's growth opportunity as restrictions ease, and we're confident that, in partnership with Blackstone and [Extended Stay America], our team has the right experience to drive continued success."