Make us your home page

Extended Stay America files for Chapter 11 bankruptcy

Extended Stay America Inc., which operates eight limited-service hotels in the Tampa Bay area, filed for bankruptcy protection on Monday in one of the largest commercial real estate industry defaults in years.

The Spartanburg, S.C., chain operates 684 properties in 44 states under the Extended Stay America, Homestead Suites and Studio Plus nameplates.

The company plans to continue managing its inventory of 770,000 rooms without interruption during the bankruptcy case.

"All hotels are open and welcoming guests as usual," said Gary DeLapp, president of HVM LLC, which is not part of the bankruptcy but manages the chain for Extended Stay America Inc. and 69 other connected ownership entities.

After paying $8 billion for the chain at the peak of the real estate boom in 2007, the new owners, Lightstone Group, a New Jersey real estate investment group, soon had trouble refinancing the $7.6 billion debt, half of which is short-term notes that come due this year. The company reported assets of $7.1 billion in its Chapter 11 bankruptcy filing in New York.

Extended Stay was a 1990s brainchild of Florida billionaire Wayne Huizenga, who also started the Blockbuster video company. He later sold his interest in the hotel chain.

Extended stay properties are a hybrid hotel and apartment complex for people staying more than a week. There's no room or maid service. The oversized units — usually suites — come with small kitchens, an on-site laundry and rent by the week at nightly rates that currently are $40 to $65. Guests often are moving to a new city, visiting to take job training or on assignment working as a contractor for weeks or months.

The business model is under stress. Business travel is way down, and people are not moving as frequently. The company's $1 billion in revenue in 2008 declined as revenue per available room, a measure of room occupancy and average daily rate, plunged 23 percent.

Meantime its mortgage debt was sold and resold to investors as cheaply as 10 to 60 cents on the dollar. About half the debt is owed to Bank of America, Wachovia (now Wells Fargo & Co.) and a government trust administering some of the remains of Bear Stearns, the brokerage and investment bank that collapsed last year.

The banks moved to take over after Extended Stay owners missed a $3.5 million phone bill payment in May. The other debt holders sued to shift the case to bankruptcy court, claiming the banks were trying to ace them out.

Mark Albright can be reached at or (727) 893-8252.

Extended Stay America files for Chapter 11 bankruptcy 06/15/09 [Last modified: Tuesday, June 16, 2009 2:08pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. 'Toxic' times: How repeal of Florida's tax on services reverberates, 30 years later

    State Roundup

    TALLAHASSEE — Long before Hurricane Irma attacked Florida, the state faced a troubled fiscal future that the storm will only make worse.

    Robertson says the tax debate is now “toxic.”
  2. Fewer Tampa Bay homeowners are underwater on their mortgages

    Real Estate

    The percentage of Tampa Bay homeowners underwater on their mortgages continues to drop. In the second quarter of this year, 10.2 percent of borrowers had negative equity compared to nearly 15 percent in the same period a year ago, CoreLogic reported Thursday. Nationally, 5.4 percent of all mortgaged homes were …

    The percentage of Tampa Bay homeowners underwater on their mortgages  continues to drop. [Times file photo]
  3. 'What Happened'? Clinton memoir sold 300,000 copies in first week


    Despite being met with decidedly mixed reviews, What Happened, Hillary Clinton's new memoir about the 2016 presidential campaign, sold a whopping 300,000 copies in its first week.

    The new memoir by former presidential candidate Hillary Clinton sold 300,000 copies in its first week.
  4. After Irma topples tree, home sale may be gone with the wind

    Real Estate

    ST. PETERSBURG — To house hunters searching online, the home for sale in St. Petersburg's Shore Acres neighborhood couldn't have looked more appealing — fully renovated and shaded by the leafy canopy of a magnificent ficus benjamini tree.

    Hurricane Irma's winds recently blew over a large ficus tree, left, in the yard of a home at 3601Alabama Ave NE, right, in Shore Acres which is owned by Brett Schroder who is trying to sell the house.
[SCOTT KEELER   |   Times]

  5. Unemployment claims double in Florida after Hurricane Irma


    The number of Americans seeking unemployment benefits dropped by 23,000 last week to 259,000 as the economic impact of Hurricane Harvey began to fade.

    Homes destroyed by Hurricane Irma on Big Pine Key last week. Hurricane Irma continued to have an impact on the job market in Florida, where unemployment claims more than doubled from the previous week.
[The New York Times file photo]