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North America

MCR Refinances Its Hotel Portfolio

Alan Woinski and Kim Woinski
February 8th, 2024 at 5:06 PM EST

Skift Take

MCR has refinanced a 16-hotel portfolio for $333 million, generating $51 million of net proceeds. In less than three years, MCR doubled the portfolio’s new operating income, increasing it from $15 million at acquisition to $36 million.

The DJIA was up 49 points, while Nasdaq was up 37, the S&P 500 rose 3 points and the 10-year treasury yield was up .06 to 4.17%. Lodging stocks were higher with IHG and MAR hitting highs.

Truist upped their price targets on both Wyndham and Choice Hotels. For WH, their new PT is $105 and for CHH it is $142. Subsequently, they said CHH’s supposed $90 per share offer that was made during the summer is now looking increasingly stale. Truist believes it fundamentally undervalued shares of WHTruist said that additionally, in a scenario where the offer is accepted following CHH getting their proposed board members elected in May, it may take an additional year for the DOJ to approve the acquisition, making the current $90 per share offer even more unattractive. Truist said while they believe CHH stock is currently undervalued, it may remain range-bound until the acquisition battle is resolved. It would not surprise them if CHH raises its offer closer to $100 per share. The problem that we see is if they do that and the offer still contains stock, CHH shares may come under so much pressure it won’t pencil out as $100. Should CHH be unable to complete the merger, Truist assumes CHH stock would re-rate higher but then could face continued organic growth questions.

Hilton announced the opening of Ka La’i Waikiki Beach, LXR Hotels & Resorts. Nestled in the lively center of Waikiki, Honolulu, the 462-room hotel spans 38 stories and offers a wellness facility, fitness center, infinity pool with an expansive sun deck, five indoor and outdoor venues and event spaces, two signature restaurants, a variety of beach services and amenities, and a business center. A renovation is scheduled to begin in early 2025 and will be completed in phases over several months and will encompass upgrades to guest rooms and suites, public areas including lobbies, pool areas, spa, fitness center, landscaping, and interiors. In addition, the property’s signature restaurants will be reconceptualized.

Home2 Suites by Hilton is being planned for San Pablo Parkway in Jacksonville, Florida. Hotel Development Partners received a $17.5 million permit to construct a five-story hotel with 124 guestrooms, a bar, meeting rooms, fitness center, and a pool.

Crawford Hoying announced the acquisition of the Courtyard by Marriott Hamilton in partnership with Shaner Hotel Group. This will be Crawford Hoying’s first hotel in Hamilton, Ohio, and fifteenth hotel in its portfolio. The 120-key hotel consists of three event rooms and breakout rooms for a total of more than 5,800 square feet of event space, a fitness center, and an indoor heated pool.

The JW Marriott in Grand Rapids, Michigan, is undergoing the first major guestroom renovation since it opened in 2007. AHC Hospitality has launched a $12 million renovation of all 20 of its guestroom floors. The remodel comes after AHC completed renovations on the ground-floor restaurant, lobby meeting rooms, and opened a spa and fitness center. In the latest project, construction teams will completely demo all of the guestrooms while making minor décor upgrades to the bathrooms. AHC will close three floors at a time until the project is completed, likely within 18 months. As part of the guestroom renovations, AHC Hospitalityalso will convert four of its rooms into a connected suite geared toward families, and a hospitality suite that will allow for small-scale meetings. The suite conversion will bring the number of hotels rooms at the JW from 335 down to 333.

Sonesta International Hotels Corporation announced the grand opening of the 131-room Sonesta Essential Houston Hobby Airport in Houston, Texas.

IHG Hotels & Resorts celebrated the opening of a newly converted Kimpton Hotel in Mexico City’s Polanco neighborhood. The 48-room Kimpton Virgilio offers a fitness center, rooftop pool, a tapas bar and lounge, and a rooftop bar. Kimpton Virgilio is owned by Virgilio 7, S.A.P.I. DE C.V.

The Newport Harbor Island Resort, a quintessential New England coastal destination and the only resort on Goat Island, announced its April 15th grand opening following a full re-imagination. Located in Newport, Rhode Island, the property is owned by Pebblebrook Hotel Trust and operated by Davidson Resorts. The $50 million renovation is comprised of refreshed, expansive guestrooms and suites, The Spa at Newport Harbor Island Resort, upgraded culinary outlets, meeting spaces, and 22-slip marina.

Study Hotels unveiled its latest project in a 100-year-old Charles Village building across the street from Johns Hopkins University in Baltimore, Maryland. The Study Hotel at Johns Hopkins houses 115 guestrooms, a three-meal restaurant, and an art gallery.

PTM Partners purchased the 1100 block of Central Avenue in St. Petersburg, Florida, from Tricera Capital and Eastman Equity for $14.75 million. The second phase of a mixed-use development dubbed EDGE Collective will be built on the site. It will include approximately 350 residential units, 350 parking spaces, and 20,000 square feet of retail. Phase one, which broke ground nearly two years ago, includes the 163-room Moxy hotel, complete with a rooftop bar, Floyd’s Barber Shop, and Solidcore pilates studio. Next door to the hotel, PTM is renovating a historic four-story commercial building adding 16,000 square feet of office space on the upper floors and 8,000 square feet of food and beverage space on the ground floor.

MCR has refinanced a 16-hotel portfolio for $333 million, generating $51 million of net proceeds. In less than three years, MCR doubled the portfolio’s new operating income, increasing it from $15 million at acquisition to $36 million, representing a 9.4% cap rate of MCR’s cost basis in the hotels. MCR acquired the 16 hotels, totaling 2,274 guestrooms, primarily in 2020 and 2021. Spread across 11 states, the portfolio is concentrated in high-growth markets, including Texas, North Carolina, Florida, and Arizona. The portfolio is comprised of 11 Hilton and Marriott extended stay and select service brands, including Home2 Suites by HiltonHilton Garden InnDoubleTree by HiltonHampton by HiltonResidence Inn by Marriott, and Courtyard by Marriott. The loan was securitized in a floating-rate single asset, single borrower CMBS transaction. The new financing replaces the original debt with an outstanding balance of $268 million at the time of payoff. Deutsche Bank Securities and BMO Capital Markets acted as Co-Lead Managers and Joint Book Runners on the transaction. Eastdil Secured LLC served as exclusive advisor to MCR on the transaction.

Personnel Moves

Aligned Hospitality Management appointed Deborah Lahti as chief operating officer, effective immediately. Lahti will manage the company’s daily business operations, working closely with department heads and supervisors to support day-to-day hotel and corporate initiatives. Lahti comes to Aligned from Visit Phoenix where she served as director of hotel and resort sales.

PPHE Hotel Group appointed Greg Hegarty co-chief executive officer effective immediately. Hegarty will work alongside company president and CEO, Boris Ivesha. Hegarty has been with the company for 18 years in various leadership roles, including COO and CEO. Hegarty will manage the day-to-day business operations as well as have a key role in defining and implementing the group’s long-term strategy as it continues in it current phase of significant growth.

International Highlights

Aareal Bank announced its pivotal role in financing the majority of the Edwardian hotel portfolio in London acquired by a controlled affiliate of Starwood Capital Group. The portfolio comprises a unique collection of ten hotels with 2,053 rooms, all located in London and operated under the Radisson Blu brand. Aareal Bank provided a loan for eight assets within the portfolio while acting as the arranger, facility agent, and security agent, thus contributing to the successful structuring and execution of this landmark deal.

BWH Hotels welcomes Best Western Premier Dynasty as a new addition to the brand’s properties in Addis Ababa, Ethiopia. K&T PLC owns the 89-room hotel that features amenities such as an indoor pool, serene spa, gym, ample parking space, and multiple food and beverage venues.

Alan Woinski and Kim Woinski
February 8th, 2024 at 5:06 PM EST

Companies: MCR, Aligned Hospitality Management, Best Western Premier, Choice Hotels International, Courtyard by Marriott, DoubleTree by Hilton, Hampton by Hilton, Hilton Garden Inn, Hilton Hotels & Resorts, Home2 Suites by Hilton, Hotel Development Partners, IHG Hotels & Resorts, JW Marriott Hotels & Resorts, Kimpton, LXR Hotels & Resorts, Marriott International, Moxy Hotels, Pebblebrook Hotel Trust, Residence Inn by Marriott, Shaner Hospitality Group, Sonesta Essential, Starwood Capital Group, Study Hotels, Wyndham Hotels & Resorts

Locations: Arizona, Baltimore, Ethiopia, Florida, Houston, Jacksonville, London, Mexico City, Michigan, North Carolina, Ohio, Rhode Island, Waikiki

Photo credit: The tarmac at MCR's TWA Hotel next to New York's John F. Kennedy International Airport.  Skift

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