Hotel MDR, Marina del Rey, CA

 Closed in March 2013, the Hotel MDR (“MDR”) was a value-add, joint venture equity investment in a 283-key full-service hotel located in Marina del Rey, CA. The asset was an under-managed and under-improved select service asset that was being removed from its existing franchise/reservation system (Courtyard by Marriott). The Marina del Rey submarket was in the midst of a transformation with its “Silicon Beach” neighbors (Venice and Playa Vista) experiencing explosive technology growth in jobs and image.

Our business plan called for: 1) Rebranding the asset at acquisition as a “soft branded” Doubletree by Hilton; 2) Executing a comprehensive public area renovation (lobby, exterior, food and beverage and pool area) and a minor rooms renovation; 3) Re-launching the asset to capture boutique hotel rate premium while driving occupancy through utilization of the powerful Hilton reservation system; and 4) Employing upgraded management by Evolution Hospitality to contain costs and exploit other revenue opportunities identified during due diligence. Significant barriers to entry and almost non-existent West Los Angeles supply prospects created a strong dynamic to own a renovated and re-branded asset at significant discount to replacement cost.

After completion of the renovation in mid-2014, the hotel was stabilized in 2015. A refinancing and subsequent upsizing of the acquisition / redevelopment financing took place in late 2015 and 2016 respectively, materially lowering the cost of debt and allowing for return of all invested equity.

Key Investment Stats