Blackstone to sell Extended Stay Hotels

NEW YORK — One of the country’s largest private real estate investors, Lightstone Group, will buy Extended Stay Hotels from private equity firm Blackstone Group for $8 billion, a sign that investors see strength ahead for the booming hotel sector.

Lightstone announced the deal Wednesday. It will finance the deal with $1 billion in cash and $7 billion in debt.

Extended Stay Hotels -- the biggest owner of mid-priced extended-stay hotels -- owns 683 properties with 76,000 rooms in 44 states across the U.S. and in Canada.

It operates properties under the brands Extended Stay Deluxe, Extended Stay America, Homestead Studio Suites, StudioPlus and Crossland.

The deal is expected to close in about two months, the group said. Lightstone won the deal over competing bids from Fortress Investment Group and Goldman Sachs Group Inc., a spokesman for Lightstone said.

Lightstone, headquartered in Lakewood, N.J., has a portfolio of more than 18,000 residential units.