Hotel operator MCR has acquired a Staybridge Suites Cathedral City Palm Springs at a foreclosure auction. With the acquisition, MCR has expanded into the California market, owning 110 properties in 33 states.

Staybridge Suites Cathedral City Palm Springs is a 197-room property in the Coachella Valley, near the Palm Springs Airport and Downtown Palm Springs. The extended-stay property has in-room kitchenettes with a full-sized refrigerator, microwave, two-burner stovetop and dishwasher, and the onsite amenities include a fitness center.

The auction is an early example of the distress in the hotel sector, which was triggered by the pandemic. There is likely more distress to come in the second half of the year. Last month, a CMBS special servicer retained JLL's hotels and hospitality team retained for the sale of an $80 million, non-performing loan portfolio that includes six loans collateralized by full limited-service hotels totaling 1,022 keys across five states. The portfolio includes two full-service and four limited-service hotels located in Lexington, Kentucky, Springfield, Virginia, King of Prussia, Pennsylvania, Indianapolis and Portage, Indiana, and West Coxsackie, New York. Like Staybridge Suites Cathedral City Palm Springs, the transaction was considered an early example of emerging investment opportunities in the hotel space.