MCR closes USD300m hospitality fund

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MCR, the seventh largest hotel owner-operator in the United States, has closed the MCR Hospitality Fund with capital commitments totalling USD300 million, providing MCR with approximately USD1 billion in purchasing capacity.

The MCR Hospitality Fund LP 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,” says Tyler Morse, Chief Executive Officer and Managing Partner of MCR. “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 favourable terms and applying our operating and management platform to unlock significant yield potential.”
Since August 2017 the MCR Hospitality Fund LP has acquired 11 hotels (1,272 rooms), comprising USD160 million in total transaction volume and USD62 million in total equity (20 per cent 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 USD126,000 per room, 20 per cent below replacement cost.
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.