Two global commercial real estate investment institutions are snapping up a big portfolio of extended-stay hotels from Brookfield Asset Management.

Blackstone and Starwood Capital Group are under agreement to acquire 111 hotel properties operating under the WoodSpring Suites brand for some $1.5B, The Wall Street Journal reported Friday, citing sources familiar with the pending sale.

The deal comes just two months after Brookfield put its portfolio of WoodSpring Suites-branded hotels on the market. Blackstone and Starwood, which could close on the Brookfield portfolio as early as next month, according to the WSJ, already made a big investment in the extended-stay hotel sector last March when they jointly purchased Extended Stay America Inc. for $6B.

The resilience of extended-stay hotel fundamentals during the pandemic has been attracting large sums of institutional capital. Extended-stay hotels posted an average occupancy of 73.2% in 2021, compared to 55.9% for the entire hotel sector, according to STR data. Extended-stay daily room rates reached pre-pandemic levels by the third quarter of last year, according to research by The Highland Group, with revenue per available room up more than 48% to $82.76. RevPAR tallied $72 per night for the entire hospitality industry in 2021, according to STR.

“Thank God we bought WoodSpring Suites,” Choice Hotels Chief Development Officer David Pepper said at a Bisnow event in October. “We're up to 300 hotels, and we had 200 days where we had 80% occupancy as a brand. So the brand is performing extremely well. We're seeing so much institutional capital that is now running because everyone wants extended stay.”

Choice Hotels purchased the WoodSpring brand and franchise operations for $231M in 2018.

Extended-stay hotels, which usually have kitchens and larger rooms than typical hotels, often act as last-resort housing for the nation's most vulnerable populations. But Blackstone and Starwood are also betting that they become increasingly popular choices for consultants, contractors and construction workers.

“The economy, mid-scale extended stay, those travelers are still traveling. We still have all of the nurses, we still have the firefighters, and if this infrastructure bill does go through we’re going to have the construction workers building the roads and bridges,” Pepper said. "Where are they going to stay when they’re out shifting around in these markets?"