CHARLOTTE, N.C., Nov. 23, 2020 (GLOBE NEWSWIRE) -- Extended Stay America, Inc. and ESH Hospitality, Inc. (NASDAQ:STAY) today announced the completed disposition of one hotel in California for gross proceeds of $65.0 million. The hotel is now closed and the buyer expects to convert the hotel to an alternative use in the coming months.

The gross proceeds represent:

• $445,200 per key valuation
• 20.2 times 2019 Property Adjusted EBITDA and 38.1 times trailing twelve month (“TTM”) Property Adjusted EBITDA as of September 30, 2020
• Cap rate of 3.8% on 2019 Property Adjusted EBITDA and cap rate of 1.8% on TTM Adjusted EBITDA as of September 30, 2020

Extended Stay America’s President and Chief Executive Officer Bruce Haase, commented, “This sale highlights the strong intrinsic value of our large, geographically diverse real estate portfolio. With the pace of development since the Company’s founding, it is impossible to replicate our real estate portfolio today. We believe that our strategy to strategically curate our REIT assets at significantly accretive multiples, as evidenced by this transaction, will create significant shareholder value in the coming years.”

Distribution Update

The Company expects to generate taxable income on this asset sale of approximately $0.11 to $0.12 per ESH Hospitality, Inc. common share outstanding. The Company expects to distribute most or all the taxable income from the disposition to shareholders at the same time as its 2020 catch-up dividend in the first quarter of 2021, subject to Board approval.

About Extended Stay America

Extended Stay America® is the leading brand in the mid-priced extended stay segment in the U.S. with 646 hotels. ESH Hospitality, Inc. (“ESH”), a subsidiary of Extended Stay America, Inc. (“ESA”), is the largest lodging REIT in North America by unit and room count, with 563 hotels and over 63,000 rooms in the U.S. ESA also manages or franchises an additional 83 Extended Stay America® hotels. Visit www.esa.com for more information.