Sale of 53 Hotel Characteristic to Nearby Year End; ESA to Run Under Single Brand
Charlotte, NC-based Extended Stay America, Inc. struck an offer to sell its continuing to be 47 Crossland Economy Studios extended-stay homes and six Extended Stay America hotels to Westmont Hospitality Group for $285 million. The deal is anticipated to nearby year end.
The sale of the 53 homes, which make up about 8 % of Extended Stay America’s portfolio, will achieve the company’s goal of running under a single brand. The purchaser, DW Crossland Owner LLC, is indirectly possessed in part by affiliates of Mississauga, Ontario-based Westmont Hospitality Group, which possesses more than 500 hotels worldwide.
The Crossland homes are spread out across 15 states, with the biggest concentrations in California, Florida and Texas. The profits per offered room (RevPAR) of $27.89 for the last 12 months ending June 30, 2015, 40 % lower than the RevPAR of $45.95 produced by Extended Stay’s continuing to be 629 owned-and-operated hotels over the same period.
“We believe our best development opportunity is within our Extended Stay America branded hotels,” Extended Stay America Chief Financial Officer Jonathan Halkyard stated in announcing the agreement. “This deal enables us to focus our resources on the home improvement and marketing of a single brand, is economically attractive and enhances our product quality and marketing effectiveness.”
Westmont Hospitality’s brands consist of Fairmont, InterContinental Hotels, Hilton, Accor, Starwood, Wyndam, Choice Hotels, Renaissance, Radisson and Best Western.
Prolonged Stay America is the largest owner/operator of company-branded hotels in North America, with 682 hotels in the U.S. and Canada comprising 76,000 spaces and utilizing over 9,000 people.