Blackstone in talks to buy 47 properties from Clarion Partners for $800M

The ever-evolving Blackstone Group is continuing to make moves in the hotel industry, and is in close talks with Clarion Partners to buy a group of select-service hotels.

Bloomberg reported on the upcoming deal, which could have a price tag as high as $800 million. Blackstone is showing interest in 47 extended-stay Residence Inn and Homewood Suites properties. Neither Blackstone nor Clarion Partners was willing to comment on the transaction, as it has yet to be concluded. However, Patrick Scholes, an analyst for corporate and investment bank SunTrust Robinson Humphrey, told Bloomberg investors are being drawn to select-service hotels due to low operating costs and high returns when compared to upscale properties.

“If you look at many cities like San Francisco or New York, hotel real estate is trading at a premium price,” Scholes said. “You’re not finding a lot of value. So you have to look a little harder by going into smaller markets or by going down in the lodging categories. You have to think more outside of the box to get better returns.”

Last week Blackstone sold a chunk of its stake in Hilton Worldwide, six months after Hilton's $2.4 billion initial public offering. The Washington Business Journal reported that Hilton is selling 90 million shares of its common stock on Blackstone's behalf, though underwriters have an option to buy an additional 13.5-million shares. A price and date has not been set, though Blackstone currently owns a 76-percent stake in Hilton represented by 752.5-million shares. 

The Hilton IPO was the largest in hotel history, and Blackstone followed it up by taking La Quinta Holdings public in March. Blackstone's most recent move was the purchase of the 3,000-room Cosmopolitan Las Vegas for $1.7 billion in cash from Deutsche Bank, the owner of the hotel since 2008.