Cerberus’s investment in a U.S.-based extended stay hotel property company showcases the Firm’s ability to use its strong real estate expertise and significant capital resources to uncover and execute on opportunities in the real estate market.
At the time of Cerberus’s investment, the lodging company was in the midst of a restructuring brought on by an over-burdened balance sheet and declining occupancy rates from the U.S. recession in 2009 and 2010.
Cerberus’s experienced real estate professionals recognized the potential value the company represented. The lodging company had invested $60 million in renovations and improvements, leaving its properties in excellent condition. Further, the company’s more than 60 properties located in prime areas across 18 states were well placed to benefit from rising demand spurred by a recovering U.S. economy.
After securing seller financing for the acquisition, Cerberus co-invested with a public hotel real estate investment trust (REIT) with long-time ties to and deep knowledge of the company.
The investment allowed the company to emerge from its restructuring with access to extensive resources. Cerberus and its JV partner have worked to improve the operations and financial health of the company, facilitating access to capital and providing operating resources that have ushered in increasing occupancy rates and greater guest satisfaction.