Marcus® Hotels & Resorts to Acquire the Cornhusker Hotel and Office Plaza in Lincoln, Neb.
Expands portfolio of leading downtown Midwestern hotels
Marcus® Hotels & Resorts, a division of The Marcus Corporation(NYSE: MCS) and its affiliate, MCS Capital LLC, today announced an agreement, subject to the satisfaction of certain standard and customary conditions to closing, to purchase the Cornhusker Hotel and Office Plaza in Lincoln, Neb. Marcus Hotels will be the majority owner of a joint venture with a fund affiliate of LEM Capital of Philadelphia. The Cornhusker Hotel acquisition is the first transaction sourced by MCS Capital, The Marcus Corporation's new hotel investment business. Marcus Hotels & Resorts assumed management of the property as of September 6. Terms of the transaction were not disclosed.
"We are excited about this opportunity because the project will leverage Marcus Hotels' 50 years of experience in restoring landmark hotels and will be an excellent fit for our portfolio. We believe we can make this distinctive hotel an even greater asset to the community and return the property to its former position as the social center of Lincoln," said Gregory S. Marcus, president and chief executive officer of The Marcus Corporation. "The Cornhusker Hotel renovation is similar to several other premier downtown hotel restorations we have successfully completed, including The Pfister Hotel in Milwaukee, Wis., the Skirvin Hilton in Oklahoma City, Okla. and the Hotel Phillips in Kansas City, Mo."
"The purchase of the Cornhusker Hotel also aligns well geographically for us. We have been a part of the Lincoln community since 2008, when our movie theatre division, Marcus Theatres®, entered the market through the acquisition of Douglas Theatres. We are pleased to be expanding our presence in Lincoln and look forward to improving and repositioning the Cornhusker Hotel as the first choice for business and leisure travelers," said Marcus.
Marcus said the company plans to renovate the hotel lobby, all guest rooms and suites, meeting space, restaurant and bars. The company, known for its exciting food and beverage operations, will also bring to the hotel and the city of Lincoln its successful restaurant and bar concept, Miller Time Pub & Grill, developed in association with world class brewer MillerCoors. The Miller Time Pub & Grill concept focuses on the history of brewing beer in America, while serving as a lively neighborhood social spot. The menu consists of more than 20 types of specialty crafted burgers and beers, in addition to other quality beer-inspired menu options such as salads, soups, wings and hearty entrees such as crab cakes and steaks.
"Residents and guests alike will enjoy the Miller Time Pub & Grill, with its extensive selection of Miller beer, happy hours and high-quality food, all in a warm and comfortable atmosphere. The restaurant will feature authentic Miller artifacts, separate bar and dining areas, a retail shop and other signature design elements. In addition to bringing the Miller Time Pub & Grill to the hotel, our focus will be on improving the total guest experience, from the hotel quality, service and amenities, to the banquet and catering operations," said Marcus.
The company also today announced Charles Harper will be the Cornhusker Hotel's general manager responsible for overseeing hotel operations and management. Harper has extensive experience in the hospitality industry, previously serving as general manager of Marcus Hotels' Sheraton Clayton Plaza Hotel in St. Louis, Mo. Prior to joining Marcus Hotels & Resorts in 2008, he held various positions with Ritz-Carlton hotels, including general manager of The Ritz-Carlton, St. Louis, and positions focused on sales and marketing at the Ritz-Carlton, Laguna Niguel in Dana Point, Calif. and The Ritz-Carlton, Aspen in Aspen, Colo. Harper graduated from the University of Wisconsin – Stout in Menomonie, Wis. with a bachelor's degree in hotel and restaurant management.
The Cornhusker Hotel is centrally located in downtown Lincoln, close to the State Capitol, the University of Nebraska and Pershing Center. Features include a restaurant, coffee shop/café, bar/lounge, indoor pool, fitness center, business center, wireless access throughout, meeting rooms, convention center and a 10,500 square foot ballroom. Parking for 400 cars is available in a city-owned garage adjacent and connected to the hotel and office building.
The Cornhusker Hotel was developed by Castle & Cook in 1983 on the site of the original Cornhusker Hotel. The property has had several owners and managers over the years. Most recently, MCS Capital and LEM, a lender to the previous owner of the hotel, worked through an ownership restructuring process to obtain ownership of the property, plan its renovation and acquire the Marriott franchise.
"This acquisition is a significant step forward in our strategy to grow our hotel business by acquiring additional properties as an investment fund sponsor, joint venture partner or sole investor," said William H. Reynolds, Jr., senior managing director of MCS Capital. "This is exactly the type of major hotel renovation and enhancement project that we excel at and I am especially pleased to bring The Marcus Corporation and Marriott together for the first time. We are actively seeking additional opportunities to acquire hotels through a variety of different ownership structures where we can add value and improve performance."
"Along with their strength in the Midwest, the ability of MCS Capital and the Marcus Hotels development team to structure the financing and business plan for the hotel and office building and to attract Marriott made the company a great financial and business partner for us," said Jay Eisner, a founding partner of LEM.
The transaction is expected to close in the next several weeks, assuming all closing conditions are satisfied.
For Miller Time Pub & Grill photos and more information on the latest news and updates, please visit http://media.marcushotels.com.
About Marcus Hotels & Resorts
Marcus Hotels & Resorts is a division of The Marcus Corporation (NYSE: MCS). With the addition of the Cornhusker Hotel, the company will own and/or manage 19 hotels, resorts and other properties in 10 states. A force in the hospitality industry, Marcus Hotels & Resorts provides expertise in management, development and historic renovations. The company's portfolio includes a wide variety of properties including city-center meeting hotels, upscale resorts and branded first-class hotels. For more information on the latest news and updates, please visit: http://media.marcushotels.com and follow the company on Facebook and Twitter (@MarcusHotels).
About The Marcus Corporation
Headquartered in Milwaukee, Wis., The Marcus Corporation is a leader in the lodging and entertainment industries, with significant company-owned real estate assets. In addition to its Marcus Hotels & Resorts division, the company's movie theatre division, Marcus Theatres®, is the sixth largest theatre circuit in the United States and currently owns or operates 695 screens at 56 locations in Wisconsin, Illinois, Iowa, Minnesota, Nebraska, North Dakota and Ohio. For more information, visit the company's web site at www.marcuscorp.com.
About LEM Capital
LEM Capital manages a series of private equity funds with over $500 million of capital commitments under management. Since 2002, LEM Capital has provided structured debt and equity solutions for real estate owners, including joint venture equity, senior equity, preferred equity, mezzanine loans and subordinate financing.
Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we "believe," "anticipate," "expect" or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division, as well as other industry dynamics such as the maintenance of a suitable window between the date such motion pictures are released in theatres and the date they are released to other distribution channels; (2) the effects of increasing depreciation expenses, reduced operating profits during major property renovations, and preopening and start-up costs due to the capital intensive nature of our businesses; (3) the effects of adverse economic conditions in our markets, particularly with respect to our hotels and resorts division; (4) the effects of adverse weather conditions, particularly during the winter in the Midwest and in our other markets; (5) the effects on our occupancy and room rates of the relative industry supply of available rooms at comparable lodging facilities in our markets; (6) the effects of competitive conditions in our markets; (7) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; and (8) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States or incidents such as the recent tragedy in a movie theatre in Colorado. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.