Marcus Hotels and Resorts, Waterton to Form Joint Venture to Acquire Sheraton Madison, Wis.

Acquisition Part of Expanded Growth Strategy to Co-invest with Selected Owners

MILWAUKEE & MADISON, Wis.–(BUSINESS WIRE)–Marcus Hotels and Resorts, a division of The Marcus Corporation (NYSE: MCS), today announced that it will form a joint venture with Waterton Tactical Real Estate Fund I, a discretionary value add real estate fund sponsored by Chicago-based Waterton Commercial LLC. The joint venture will acquire the Sheraton Madison Hotel in Wisconsin from Woodmen of the World Life Insurance Society for an undisclosed amount. Marcus Hotels and Resorts will own a 15 percent minority interest in the joint venture and will manage the hotel and oversee a major renovation of the property. The transaction is expected to close March 1, 2007.

“This will be our first joint venture, which is part of our previously announced strategy to co-invest on a selective basis with quality hotel investors like Waterton,” said Bill Otto, president of Marcus Hotels and Resorts. “We approach all of our hotels from the owner’s perspective, but as a co-investor our interests are even more closely aligned. We look forward to the opportunity to build on our relationship with Waterton.”

“The Sheraton Madison will be our third hotel investment, and we continue to seek opportunities to invest in hotels that have strong repositioning potential in the top 50 markets,” said Rich Silverstein, vice president-investments of Waterton Commercial. “We intend to undertake a major, multi-million dollar renovation to make it one of the leading hotels in the market. When completed in late 2007, the hotel will be in like-new condition. We selected Marcus because of their proven track record of maximizing the potential of the hotels they operate.”

Renovation plans for the hotel are still being developed but will likely include exterior renovations and significant upgrades to the lobby and public space, as well as remodeling all guest rooms.

Located at 706 John Nolen Drive, the Sheraton Madison has 237 rooms and suites. The hotel features an indoor heated swimming pool, whirlpool and fitness center. Room amenities include the Sheraton Sweet Sleeper bed, high-speed Internet access and a refrigerator.

“The hotel’s location appeals to a broad cross-section of guests, including business, group and leisure travelers,” Otto said. The Sheraton has one of the city’s largest hotel meeting facilities with 18,000 square feet, capable of handling groups of 10 to 500 people. The property is adjacent to the Alliant Energy Center, which boasts more than 150,000 square feet of exhibit space and is located approximately 1.5 miles from the Monona Terrace Convention Center, the city’s convention center facility. The hotel also is proximate to numerous corporate headquarters, the University of Wisconsin campus, downtown Madison, and the De Joppe Bingo Casino.

About Waterton Associates, LLC

Founded in 1995 by David R. Schwartz and Peter M. Vilim, Waterton Associates, LLC and its affiliate Waterton Commercial acquires multi-family properties, hotels and other commercial property types that can achieve superior returns through re-positioning, renovation and management. Waterton’s portfolio currently includes 35 apartment communities, containing more than 14,500 apartment homes, 1 million square feet of industrial buildings and three hotels. The company employs more than 450 people nationwide. Additional information about Waterton is available at

About Marcus Hotels and Resorts

As of March 1, Marcus Hotels and Resorts will own or manage a distinctive portfolio of 20 hotels, resorts and other properties, with one additional hotel under development. Including the Sheraton Madison, the company is a third-party manager for 11 hotels, resorts and other properties. Marcus Hotels and Resorts also owns and operates nine hotels and resorts, including the newly restored Hilton Skirvin in Oklahoma City, Okla., opening later this month. The company currently is providing technical services for the development of a Hilton in Bloomington, Minn.

About The Marcus Corporation

Headquartered in Milwaukee, Wis., The Marcus Corporation is a leader in the lodging and entertainment industries. In addition to its Marcus Hotels and Resorts division, the company’s movie theatre division, Marcus Theatres®, owns or manages 498 screens at 41 locations in Wisconsin, Illinois, Minnesota and Ohio, and one family entertainment center in Wisconsin. Marcus Theatres also has one new theatre under construction in Brookfield, Wis. For more information, visit the company’s Web site at

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 will 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 that could 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 and pre-opening 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 from 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 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, the United States’ responses thereto and subsequent hostilities. 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.


The Marcus Corporation


Douglas A. Neis, 414-905-1100


Marcus Hotels and Resorts


William J. Otto, 414-905-1200