June 6, 2022
MCR — the country’s 4th-largest hotel owner-operator — has completed $2 billion of investments and deployed more than $500 million of equity since 2020. In the last 24 months, the company has acquired 46 select service hotels, five full-service hotels, four non-performing loans and two hospitality-related software companies. These acquisitions bring the company’s portfolio to 145 hotels and nearly 25,000 rooms across 102 cities.
MCR completed 26 transactions during the COVID-19 pandemic. The team got creative with new investment structures and sourced opportunities in new asset classes, including buying:
• Hotels directly from developers and owner-operators with limited due diligence
• Real estate-owned hotels from special servicers
• Hotels out of bankruptcy
• Undervalued publicly traded equity securities
• Non-performing loans
• Hotels via public auctions on the steps of city hall
• Hospitality-related software companies such as StayNTouch and Optii
MCR’s size and scale allowed it to act quickly. For example, MCR closed on the 197-key Staybridge Suites Palm Springs in 14 days and the former Hotel Constance Pasadena in 30 days.
With properties in 37 states, MCR’s investments have focused on high-growth markets like Charlotte, Nashville, Phoenix, Naples and Dallas and urban downtowns such as New York, Houston and Minneapolis. Among the Manhattan acquisitions: the 1,780-room Sheraton New York, the 168-room Royalton New York and the 725-room The Lexington Hotel, Autograph Collection.
MCR has leveraged its team of 6,000 operations professionals to expand its third-party management business to 20 properties. The company’s in-house Creative team, which oversees design and marketing for all of MCR’s bespoke hotels, re-branded four independent hotels in the past 24 months, including strategic brand conversions such as the formerly independent 102-key Killington Mountain Lodge to a Hilton Tapestry Collection property.
MCR has realized seven investments in the last 24 months resulting in internal rate of returns (IRR) between 30% and 330%. As the travel industry rebounds from the pandemic, MCR plans to continue its accelerated transaction activity with five assets under construction, several additional software acquisitions and $1.8 billion in adaptive reuse development projects underway.