The Marcus Corporation (
recently announced that its operational arm Marcus Hotels &
Resorts and associate MCS Capital LLC have inked a deal to buy The
Cornhusker Hotel and its attached office property - The Cornhusker
Office Plaza situated in Lincoln, Nebraska. The transaction is
expected to leverage Marcus Hotels' 50 years of expertise in
landmark hotels refurbishment and portfolio streamlining activity.
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This acquisition is the first transaction financed by MCS Capital,
which is a new hotel investment business arm of The Marcus
Corporation, formed last year. The acquired hotel is the debut
property of the Marcus Hotels in Nebraska.
Nebraska on the Great Plains of the Midwestern U.S., is one of the
emerging economies of the country with a rapidly developing tourism
industry. The state generates over $3.3 billion of annual revenue
from the tourism industry. Lincoln - the state capital - and the
city of Omaha are the major growth drivers with a majority of
world-class hotels. The area already boasts major hoteliers such as
Starwood Hotels & Resorts Worldwide Inc. (
Choice Hotels International Inc. (
Marcus Hotels and MCS Capital LLC have entered into a joint venture
agreement with a fund associate of LEM Capital of Philadelphia for
the acquisition of the property. According to the agreement, Marcus
hotels will hold 73% ownership in the joint venture. The financial
terms of the transaction, which is expected to close in the coming
several weeks, have not been divulged.
LEM Capital engages in management of a series of private equity
funds with over $500 million of capital commitments under
management. In the last 10 years, LEM Capital ihas provided
structured debt and equity solutions for real estate owners. It
includes joint venture equity, senior equity, preferred equity,
mezzanine loans and others.
The 297-room Cornhusker Hotel is located in the midst of downtown
Lincoln and in close proximity to major facilities and
transportation networks of the state. The hotel, one of the oldest
and most prominent hotels in Lincoln, is well furnished with high
class amenities. Since its inception in 1983, the hotel has catered
for both business and leisure travelers. After the acquisition
closure, Marcus Hotels intends to finance extensive renovations.
Post-renovation, the property will be branded under the
Marriott International, Inc. (
and renamed accordingly as The Cornhusker Marriott Hotel. The
adjoining Cornhusker Office Plaza is a seven storey building
spanning 85,592 square feet and is 90% occupied.
Marcus Hotels is on line to fulfill its strategy of addition and
renovation of high class hotels to boost its portfolio base.
Recently, the company also completed the renovation of an AAA Four
Diamond hotel - Hilton Milwaukee - located in the heart of downtown
With the addition of the Cornhusker Hotel, Marcus Hotels now has
ownership or management interest in 19 hotels, resorts and other
properties across 10 states of the U.S. The company's portfolio
includes a wide range of properties comprised of city-center
meeting hotels, upscale resorts and branded first-class hotels.
The Marcus Corporation currently carries a Zacks #2 Rank, which
translates into a 'short-term Buy rating'. We also have a long-term
Outperform recommendation on the stock.