MCR closes hospitality fund worth $300 million

New York City's High Line Hotel is a member of MCR's portfolio. Photo credit: MCR

MCR, the seventh largest hotel owner-operator in the United States, successfully closed its fund, MCR Hospitality Fund. The fund’s capital commitments total $300 million, providing MCR with approximately $1 billion in purchasing capacity. The MCR Hospitality Fund targets investments in institutional-quality Marriott and Hilton select-service and extended-stay hotels throughout the country.

“This important milestone reflects the success our operations team has had in creating value through better management,” Tyler Morse, CEO and managing partner of MCR, said in a statement. “By investing strategically and being disciplined in our approach to capital allocation, we have continued to produce strong investor returns. We expect to build upon this success by using the proceeds we raised to acquire additional properties at favorable terms and applying our operating and management platform to unlock significant yield potential.”

Since August 2017 the MCR Hospitality Fund has acquired 11 hotels (1,272 rooms), comprising $160 million in total transaction volume and $62 million in total equity (20 percent of the Fund’s total capital commitments). The 11 properties include four Marriott hotels (496 rooms) and seven Hilton hotels (776 rooms), and represent an average purchase price of $126,000 per room, 20 percent below replacement cost. The acquired hotels are located within strong business and leisure markets, including:

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  • Chicago
  • Salt Lake City, Utah
  • Cincinnati, Ohio
  • Milwaukee, Wis.
  • Richmond, Va.
  • Providence, R.I.
  • Champaign, Ill.
  • Allentown, Pa.

On track to acquire 25 hotels by the end of 2018, the fund has five hotels (550 rooms) in the pipeline that are expected to close by the end of August 2018.

The MCR Hospitality Fund comprises a mix of investors including endowments, foundations, charitable trusts, high net worth individuals and principals of MCR. Morse, along with Chris Korinek, SVP of operations; Kym Janney, chief financial officer; and Russ Shattan, SVP, acquisitions & development, will oversee the fund’s management.