Hotel REIT secures $200M refinancing on River North Marriott, six other properties

Maryland-based RLJ Lodging Trust owns 10 Chicago-area hotels, including the Courtyard by Marriott
By Alex Nitkin |
Research by Haru Coryne
April 22, 2019 02:00PM

RLJ Lodging Trust CEO Leslie Hale and the Courtyard by Marriott at 165 East Ontario Street

A Maryland-based hotel REIT took out a $200 million loan on a portfolio of properties including a Courtyard by Marriott in River North.

RLJ Lodging Trust secured the loan earlier this month from Bank of America, according to Cook County property records. The publicly-traded REIT owns 150 hotels around the country, including 10 in the Chicago area.

RLJ will use the proceeds of the five-year, floating-rate loan to pay back two other loans, saving it about $2 million in interest payments, according to a press release. The loan was secured by seven hotels.

RLJ bought the 306-key Courtyard by Marriott in 2006, part of a 100-hotel portfolio it acquired from Indiana-based White Lodging in a $1.7 billion deal. The firm in 2017 launched a renovation of the building at 165 East Ontario Street, including interior work on 15 floors and a complete re-roofing.

The mortgage comes on the heels of a bumpy year for hospitality REITS, whose stock prices flagged then recovered last year only to fall again during December’s stock market sell-off. At $17.89 per share, RLJ is up 9% from its January low point but well below its 2015 peak of $35.62 per share.

The Magnificent Mile saw some of the city’s priciest hotel transactions last year, including Denihan Hospitality’s $83 million sale of the 297-key James Chicago Hotel. Marriott also sold the nearby Tremont Chicago Hotel at 100 East Chestnut Street in a $26 million deal.

Downtown hotel operators saw huge spikes in revenue and occupancy last year, backed up by the city’s record levels of tourism and its enduring reputation as a convention destination. But the roughly 2,000 new rooms set to come online in the city this year might pressure property owners to keep their room rates flat or shell out for upgrades.