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Thor Equities secures $427M refinancing on Palmer House Hilton
Many Downtown investors are opting to restructure debt instead of selling as property values rise
Thor Equities took out a $427 million loan on the Palmer House Hilton, joining the trend of investors restructuring debt in order to hold on to properties as values rise.
New York-based Thor secured the refinancing from lenders led by JPMorgan Chase, replacing $420 million in financing from 2014 that was set to mature next month, according to Crain’s.
It is the third refinancing for the 1,639-key hotel at 17 East Monroe Street in the past six years for Thor, which put the hotel on the market twice during that period. Most recently it tried to sell it for about $575 million before deciding to hold on to it instead.
Thor bought the Palmer House for $230 million in 2005 and finished a $131 million renovation in 2008.
Revenue per available room Downtown bounced back this year after falling each of the past two years, according to Crains.
The Palmer House’s revenue peaked for the current cycle at $137.5 million in 2015, up from $126.4 million in 2014 and $115.6 million in 2013, according to a report tied to its previous loan.
The hotel posted net operating income of $41.2 million last year on $130.8 million in revenue, according to the report.
Other hotels that have refinanced in recent years include the JW Marriott Chicago, Chicago Athletic Association and the former Hard Rock Hotel, which is reopening as the St. Jane Chicago hotel after renovations. [Crain’s] — John O’Brien