MCR Hotels Refinances Hotel Portfolio With $333M CMBS Loan
Hotels within the portfolio include Hilton and Marriott Properties in Texas, Arizona, North Carolina, and Florida
By Brian Pascus February 8, 2024 1:54 pm
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MCR Hotels — the nation’s third-largest hospitality owner and operator — has secured $333 million to refinance a 16-hotel portfolio of Hilton and Marriott properties that encompasses 2,274 rooms stretched across 11 states.
The refinancing retires $268 million in existing debt.
Deutsche Bank (DB) and BMO Capital Markets led the floating-rate, single-asset single-borrower (SASB) commercial mortgage-backed securities (CMBS) deal. Eastdil Secured negotiated the debt on behalf of the borrower.
Tyler Morse, chairman and CEO of MCR Hotels, noted in a statement that his firm overcame a difficult financing environment amid interest rate challenges to finalize a complex transaction.
“Securing a refinancing in today’s challenging debt environment demonstrates MCR’s success as an owner-operator,” said Morse. “We bought good hotels at the right time, in the right markets, and implemented our business strategies to boost operating performance.”
MCR had initially purchased the 16 hotels – which includes hotels in Texas, Arizona, North Carolina, and Florida and six other states – throughout 2020 and 2021. Among the brands included within the 16 hotel portfolio are Home2 Suites by Hilton, Hilton Garden Inn, DoubleTree by Hilton, Hampton by Hilton, Residence Inn by Marriott and Courtyard by Marriott.
The deal appears to be a favorable one for the New York City-based hospitality operator. The $333 million refinancing is expected to produce $51 million in proceeds. Moreover, within three years of purchase, MCR doubled the net operating income of the portfolio from $15 million to $36 million, according to a press release.
MCR owns some of the most notable hotels in the nation, including the TWA Hotel at JFK International Airport in Queens, The New Yorker Hotel in West Manhattan, and the Pasadena Hotel and Pool in California.
Fried Frank served as legal advisor in the transaction.
Deutsche Bank and BMO Capital Markets officials did not respond to requests for comment.
Brian Pascus can be reached at bpascus@commercialobserver.com
