MCR, Three Wall Capital and the Island Capital Group have formed a joint venture to acquire The Lexington Hotel, Autograph Collection by Marriott for $185 million. The property has 725 guest rooms, equating to a sales price of $225,000 per door.
Like many hotel properties, The Lexington Hotel was shuttered during the pandemic. It is scheduled to reopen in August, and the new ownership says that the property is on track to hit that goal.
The Lexington Hotel has a notable history. Originally built in 1929, the property has hosted some of the most iconic celebrities, including Marilyn Monroe and Joe DiMaggio and Ella Fitzgerald. It features a 15,000-square-foot state of the art Crunch gym, a Starbucks on the lobby level and 3,713 square feet of event space across six rooms.
While the hotel market was depressed by the pandemic, it has already started to swiftly rebound as businesses have reopened and government regulations wane. MCR is bullish on the markets recovery. In May, hotel operator MCR 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 acquisition served as MCR has expanded into the California market, owning 110 properties in 33 states.
Although there is reason to believe the hotel market will recover as soon as people start to travel again, hotel leaders Eric Prevette, Carlos Lopes and Teresa Holden believe that luxury hotel properties will be the last to recover. In March, the trio launched Luxury Hotel Advisors to help guide leaders through these unprecedented market conditions. The boutique firm will provide asset management, acquisition, disposition and marketing guidance. At the time, they noted that the luxury sector has a long recovery road ahead, and will need to make changes to respond to the new market conditions.