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MCR sells hotel portfolio for $407m

The firm amassed the Marriott and Hilton-branded hotel portfolio through a joint venture with an institutional investor.

MCR, the New York-based hotel operator, has sold an 18-asset hotel portfolio for $407 million, the firm said Thursday.

MCR and its joint venture partner, an unnamed institutional investor, sold the 2,187-room portfolio of Hilton and Marriott-branded properties to American Hotel Income Properties, a Vancouver-based real estate investment trust. The partners purchased half of the properties in December 2010 for $136.1 million and the other half in December 2012 for $150 million, according to data provider Real Capital Analytics. The hotels were located across Maryland, New Jersey, New York, Connecticut and Pennsylvania. The portfolio’s average capitalization rate was 7.9 percent.

A spokesman for the firm declined further comment.

“The sale of this portfolio is a reflection of MCR’s investment thesis: to purchase premium branded select service and extended stay hotels, improve operations and sell opportunistically,” said Tyler Morse, MCR’s chief executive. “The strong returns generated by this disposition are a testament to the performance of our industry-leading brand partners, Marriott and Hilton, and to the strength of MCR’s hotel operations team.”

In November, MCR launched its first commingled real estate fund, seeking $300 million to purchase hotels in secondary and tertiary markets, PERE previously reported. Morse said he expected the investor base for MCR Hospitality Fund to comprise both returning and new investors that include a mix of foundations, endowments, pension funds and high-net-worth individuals.

The firm, which was founded in 2006, previously raised capital on a deal-by-deal basis, but is pursuing a commingled structure to diversify investors’ risk and to streamline deal execution.

The company manages $2 billion in assets, according to its website.