$8B Deal For Lightstone
May 2007

In one major move, Lakewood-based Lightstone Group became the major player in the extended stay hotel business.  As this issue went to press, Lightstone had agreed to buy, on behalf of an affiliate, the Spartanburg, SC-based Extended Stay Hotels.  The deal involves 683 properties in 44 states and Canada, and it also involves a lot of debt.  According to a published report it involves $1 billion in cash and $7 billion in debt.  The company was sold by affiliates of the New York-based Blackstone Group, which had acquired the hotelier just three years ago for $3.1 billion, including assumption of $1.1 billon of debt.  At the time, Extended Stay was a 475-hotel company. 

Lightstone has been known mostly as an owner of residential, retail, and some office properties.  In this case, “it was a perfect opportunity to expand into the hotel industry,” says David Lictenstein, Lightstone’s chairman/CEO.  Acquiring Extended Stay puts us in a leadership position within the extended stay market.

“This transaction is also consistent with our strategy of acquiring companies with brand identity and using our resources to unlock long-term value,” he says.

In this case, that long-term value may be entry into new markets.  Extended Stay’s properties are mostly on the two coasts, and Lichtenstein has signaled his intention of moving inland with the brand.

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