Tyler Morse, CEO of MCR Development, joined REIT.com for a CEO Spotlight video interview at NAREIT’s 2015 Washington Leadership Forum.
MCR Development maintains an active renovation platform and is currently renovating approximately 30 hotels in its portfolio. Morse said the firm is focusing on renovations that “impact the consumers most directly.” These include changes to rooms to accommodate personal electronic devices.
In terms of acquiring new properties, MCR was active on the market in 2014. Looking at the acquisitions environment this year, Morse noted that yields generally remain low for investors across all asset classes. In contrast, he pointed out that the hotel sector’s “rich” yields make it an attractive sector for investors, including from overseas sources of capital seeking out safe havens.
“There’s a lot of foreign capital coming to the United States right now,” Morse said. “I think the acquisition environment is going to be quite rich.”
Looking at trends currently affecting the lodging real estate sector, Morse cited the influence of technology. He also pointed out that consumers are starting to travel more.
“There are a lot more people out on the road,” commented Morse, who noted that low-cost airlines are driving more air travel.
Morse described his company, which owns select-service hotels, as “accessible,” in so far as its average room rate is $100 per night, and that includes amenities such as free meals and parking.
“I think you’re seeing a secular shift to select-service products because the value proposition is greater at that level of the market,” he said.