New York-based Blackstone Group LP, the largest private equity investor in property worldwide, sold 4.7 million shares of its stake in Charlotte-based hotel chain Extended Stay America for $69 million.
Blackstone still owns about 33 million shares in the company.
The Nov. 22 Securities and Exchange Commission form 4 can be found here.
The company’s third quarter earnings beat analysts’ expectations, N.C. Business News Wire reportedon Oct. 25.
Blackstone and two other private equity firms, Centerbridge Partners and Paulson & Co., bought Charlotte, North Carolina-based Extended Stay out of bankruptcy in 2010 and brought in Jim Donald, the former head of Starbucks Corp., as chief executive officer.
Gerry Lopez replaced Donald as chief executive officer in August of last year. Before Extended Stay, Lopez was chief executive officer of theater chain AMC Entertainment.
Extended Stay, which owns and operates almost 700 hotels with about 76,000 rooms in the U.S. and Canada, went public three years after its owners invested about $626 million in renovations, consolidated five brands under the Extended Stay name and introduced amenities such as free Wi-Fi and breakfast.
The largest operator of company-branded hotels in North America raised $565 million in the November 2013 IPO, selling about 14.1 percent of the company and giving it a market value of about $4 billion. The company used the proceeds to pay debt, according to a regulatory filing.
Blackstone founded its real estate business in 1991 and has approximately $102 billion in investor capital under management. Major holdings include McLean, Virginia-based Hilton Hotels Corp., which Blackstone bought for $26 billion in 2007 at the tail end of the biggest buyout boom in history.
Some investors are attracted to hotels because they offer investment yields, as measured by capitalization rates, of about 7.8 percent, or about 2 percentage points higher than the average of the other major commercial-property types. Cap rates are net operating income divided by purchase price.
A rise in interest rates would boost borrowing costs and may reduce the prices that buyers who rely on debt financing are willing to pay for hotel assets.
Shares of Extended Stay closed at $15.67 Wednesday, up 1.69 percent.
