UPDATE, Feb. 12, 8:20 p.m.: Avantgarde Hospitality bought the Ivy Boutique Hotel in Streeterville for $23.7 million with plans to upgrade what firm co-founder Frank Anderson said is a hidden gem among Chicago’s hotel market.
California-based Avantgarde closed on the hotel at 233 East Ontario Street on Jan 31, Anderson confirmed to The Real Deal. The deal was financed with a $16.9 million acquisition loan from Prime Finance Partners, Cook County property records show. Selling the property was local developer Branko Tupanjac, records show.
Though Avantgarde co-founder Andre Koren has acquired three other boutique hotels in Chicago, the purchase of the Ivy is Avantgarde’s first acquisition in the Chicago market, Anderson said.
“He’s been looking for an opportunity to expand his holdings in Chicago,” Anderson said of his business partner.
That opportunity presented itself in the Ivy Boutique Hotel, which Anderson said was little known even among locals. He said his firm is planning nearly $3 million in upgrades to the facility, plus a tweak in its marketing to make it more well known and attractive.
The biggest renovation will be the $1.5 million spent on a new retractable roof for the hotel’s sky lounge, which will turn the rooftop into a year-round destination for guests and locals alike. Avantgarde will also redevelop the hotel’s existing meeting space into as many as five additional rooms, Anderson said.
“We look forward to increasing the visibility of this hidden gem, and to immerse the hotel in the local community,” Anderson said in a statement.
Avantgarde’s Koren in 2008 bought three North Side boutique hotels for $30 million. A separate venture of Koren’s defaulted on its acquisition loans for the hotels at the height of the recession. Koren refinanced the portfolio and held on to the hotels, which are now worth more than the initial investment of $30 million, a spokesperson for Avantgarde said.
The hotel business has changed since 2010. Years of record-setting tourism in Chicago caused occupancy rates in local hotels to jump 10 basis points in 2018, while revenue for downtown-area hotels jumped 9 percent last year.
Koren will seek to have the Ivy Boutique Hotel stand out in a crowded field by spending $1.5 million on a new retractable roof for its sky lounge, Crain’s reported. Koren did not respond to requests to comment.
Chicago’s hotel market has been strong despite a development boom: More than 3,000 hotel rooms were under construction as of June.
Massive Downtown developments, like the 101-story Vista Tower and Riverside Investment and Development’s Union Station redevelopment are all expected to add hotel capacity over the next several years.
This story has been updated to reflect the correct buyers of the property.