Comments on: Lightstone To Lose Extended Stay, So What Happens Next?

By: Robert

Robert — Thu, 11 Dec 2008 19:26:39 +0000

I’m willing to bet that Prime Outlets aren’t doing all that hot at the moment either…

By: Hillel Spinner

Hillel Spinner — Thu, 11 Dec 2008 06:42:48 +0000

Andrew,

Like you I have been following Lighstone group because its close to home , and I grew up in the same complex as David Lichteinstein when he was a nobody.(for lack of a better word) I think most people who know the company was shocked that they took such a big risk for reasons that are unclear. I do know for a fact that they teamed up with some other under the radar mega deveopers to make this purchase. If they lose Extended Stay they likely stand to lose there cash investment of about 600 – 700 million. It will be interesting how this plays out!

By: Andrew Calvo

Andrew Calvo — Mon, 08 Dec 2008 21:53:43 +0000

Patrick – Choice, Wyndham and IHG were my first thoughts – but they are mostly franchised firms, they would rather not hold onto any real estate. Starwood Capital on the other hand has done just that – purchased the real estate and then sold the rights for development and the hotel name to another company. For example take the LeMeridien brand – when it was sold a few years ago, Starwood Cap bought (with Lehman Brothers) almost all of the LeMeridien properties around the world, and Starwood Hotels managing them and owning the LeMeridien name.
There is a first time for everything – but I dont see Choice/Wyndham/IHG changing or adding to their business model at this point, especially with the economy the way it is.

By: Patrick

Patrick — Mon, 08 Dec 2008 21:45:42 +0000

Element is in a very different category, trying to appeal to the “luxury” extended stay segment. How about one of the company’s direct competitors working with a hedge fund or other private equity group?

I could see Choice or Intercontinental Hotels go after the name and then gut the properties for geographic areas of interest. Both companies are growing their extended stay segments at a fast pace in recent years, and Choice has already partnered with hedge funds to finance some of its franchised hotels.

By: Andrew Calvo

Andrew Calvo — Mon, 08 Dec 2008 21:35:22 +0000

Erik – I should have been more specific. I was referring to Starwood Capital which is completely unrelated to Starwood Hotels

By: Erik Weinert

Erik Weinert — Mon, 08 Dec 2008 21:31:34 +0000

“…for Starwood to create an extended stay brand – the part of the equation which I thought they go after when they launched their Hotel Fund in 2006.”

Starwood already has an extended stay brand: element hotels. Been around since 2006, and growing.