MCR Development, New York City, on Friday announced it has acquired 26 Marriott and Hilton hotels from Western International for US$430 million. MCR will own and manage all 26 hotels, each of which will continue to operate under its respective Marriott or Hilton brand affiliations, with long-term franchise agreements in place.
This portfolio is comprised of 3,002 rooms in four states with an average age of approximately 4 years old. To date, MCR owns and operates 56 branded properties with some 7,000 rooms in 15 states.
"The Western International hotels are built to a very high standard, and stand out amongst the competition," said Tyler Morse, CEO of MCR Development. "This investment provides great growth opportunities for our team members, and for our company to expand into new markets and continue to deliver high returns to our investors."
Industry analyst David Loeb of R.W. Baird & Co. said a vast majority of the EBITDA is concentrated in Texas and is a targeted play on the booming energy sector. "While the geographic risk is concentrated, the per-key price appears reasonable given the average property age of four years, and MCR Development has geographic diversification across the rest of its hotel portfolio," Loeb said.
Loeb added that the acquisition could be indicative of the start of larger portfolio deals as potential buyers try to execute while the debt market is more receptive and industry performance remains encouraging.