(Bloomberg) -- Brookfield Asset Management Inc. is exploring the sale of a portfolio of extended-stay hotels that could fetch as much as $1.5 billion, according to people with knowledge of the matter.
The Toronto-based firm is working with an adviser to solicit interest in WoodSpring Suites hotels, said the people, who requested anonymity discussing talks that aren't public.
The hotels target guests seeking affordable, basic short or medium-term housing, which have few services or associated amenities. They generate high margins due to a longer average length of stay -- about 15 days -- compared with three to five days at other hotels, S&P Global Ratings credit analysts wrote in a February 2020 memo analyzing a loan offering that counted the WoodSpring properties as collateral.
“This in turn results in lower operating expenses as these hotels employ only four to eight full-time employees, provide only bi-weekly room cleanings, and provide very few amenities,” S&P Global analysts wrote. The hotels are managed by Choice Hotels International Inc.
A Brookfield representative declined to comment.
Extended-stay hotels have drawn interest from institutional investors including Blackstone Inc. and Starwood Capital Group, which struck a deal to buy Extended Stay America Inc.
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