History Rhymes
It was announced today that The Blackstone Group is teaming up with Starwood Capital to buy Extended Stay America (link below). It conjures up the old Mark Twain quote that “History Doesn’t Repeat Itself, but It Often Rhymes.” Both of these firms have a long history with the hotel business, although it has changed a lot over time.
For instance, The Blackstone Group at different times has been one of the largest owners of hotel real estate in the world. In the last twenty years, Blackstone Group has bought portfolios of hotel real estate (like when they bought Wyndham in 2006, part of the purchase included a lot of hotel real estate), hotel brands (they purchased the Hilton brand in 2007), entire hotel REITS (as they did buying Strategic Hotels in 2015), and one-off purchases like when they bought the Cosmopolitan Resort in Las Vegas in 2014).
Starwood Capital’s history in the hotel business involved owning a number of hotels (especially in the budget extended stay space) and launching what later became “Starwood Hotels & Resorts.” Barry Sternlicht reorganized a little known REIT in 1995, which he used to launch the W brand and acquire several others (Le Meridien, Sheraton). Marriott International bought Starwood in 2015.
Now Blackstone and Starwood Capital are teaming up to buy a brand that Blackstone has owned twice before in Extended Stay America. Blackstone executed a buyout in 2004, sold it to The Lightstone Group in 2007, bought it out of bankruptcy in 2010, took it public in 2013, and is now buying it back.
Mark Twain’s quote is attributed to a speech he gave in 1968 in North Carolina. It’s hard not to evoke his famous quote from time to time.