SPARTANBURG, SC-Now that Centerbridge Partners, LP has come out the winner in the auction to take Extended Stay, Inc. out of bankruptcy protection, after offering $3.93 billion for the hotel chain, “the company will have a clearer direction and get back to normal, (with regard to) strategic planning for stabilization, growth and marketing,” says Frank Nardozza, CEO of REH Capital Partners, LLC, a real estate and hotel investment advisory firm based in Ft. Lauderdale. “Over the last year, the future direction of the hotel chain was in flux,” awaiting bankruptcy restructuring. “Now, executives in charge can know the chain’s financial structure and what capital will be available to continue growth in the company,” he says.

Early last Friday morning, the investor consortium, which includes Paulson & Co. and the Blackstone Group, bested its rival for Extended Stay, a group led by Starwood Capital Group, which offered $3.88 billion for the hotel chain. J.P. Morgan Chase & Co. and Deutsche Bank AG are important backers of the Centerbridge bid, sources told the Wall Street Journal last week.

The cash offer, which must be approved by the bankruptcy court, would come close to paying back Extended Stay’s $4.1 billion first mortgage, according to the Wall Street Journal. Extended Stay Hotels, which currently has 680 properties, was purchased by the Lightstone Group for $8 billion in 2007 from the Blackstone Group. At the time, there was only $600 million worth of equity in the deal supplied by Lightstone and preferred equity partner, Arbor Realty Trust.

The first order of business, says Nardozza, now that there will be a new group in charge at the Extended Stay chain, will be to figure which properties in the portfolio are core properties with stable cash flow and which are not. “If there is an underperforming hotel, (Extended Stay) can decide whether to make capital improvements or sell it,” he says. “If there is a drain on cash flow,” says Nardozza, and the hotel needs a significant amount of money to refurbish it, unless it fits into the current format for the chain, it might make sense to sell it at a discount, he says.

“Selling is good if there is an asset that can better fit into another company’s portfolio,” says Nardozza. “Already there has been a price adjustment with the restructuring of the debt and wiping out of the equity originally in the deal, so there will be a lower overall basis in those assets,” he says.

The new owners may have already completed this evaluation process, says Nardozza. “A lot of smart people were looking over the Extended Stay portfolio.”