Here are the Chicago area’s 5 biggest hotel deals of 2019

Anbang’s firesale produced the two biggest deals of the year

Dec.December 24, 2019 12:00 PM
From left: 505 North Michigan Avenue, 660 North State Street,, 200 North Columbus Drive, 505 North State Street and 30 East Hubbard Street (Credit: Google Maps)

From left: 505 North Michigan Avenue, 660 North State Street,, 200 North Columbus Drive, 505 North State Street and 30 East Hubbard Street (Credit: Google Maps)

Anbang Insurance Group’s shedding of a $5.8 billion portfolio gave a major boost to the local hotel market in Chicago. The two biggest trades of the year were hotels from that portfolio, accounting for over $1 billion in sales volume.

In fact, the other three top hotel deals accounted for just $168 million in sales volume. Take away Anbang’s firesale, and the year would look a lot more like 2018, when the top five Chicago hotel deals accounted for about $200 million.

Here are the top five hotel sales in Cook County during 2019 based on TRD research and news clippings:

1. InterContinental Chicago | Mirae Asset Global Investments | $559.2 million

As part of the $5.8 billion portfolio sale, the 792-room InterContinental Chicago at 505 North Michigan Avenue sold for $559.2 million, or about $706,000 per room, in September. It was one of 15 hotels to trade from Anbang to South Korean investment fund Mirae Asset Global Investments in the portfolio sale.

Earlier this spring, Anbang started accepting bids for its hotel portfolio, which it purchased from the Blackstone Group for $5.5 billion in 2016. Other bidders included Brookfield Asset Management, Fortress Investment Group and Blackstone Group.

Anbang has been selling off its holdings in the U.S. since its former chairman was sent to prison last year for orchestrating a $12 billion fraud.

2. Fairmont | Mirae Asset Global Investments | $488.6 million

The 687-room Fairmont at 200 North Columbus Drive sold for $488.6 million as part of the same $5.8 billion portfolio sale. That’s about $711,000 per room.

Anbang purchased the 15-hotel portfolio from Blackstone for $5.5 billion in 2016, just three months after Blackstone bought it for $6 billion.

3. Eurostars Magnificent Mile | Ponte Gadea | $72.5 million

Spanish billionaire Amancio Ortega’s investment firm, Ponte Gadea, purchased the Dana Hotel at 660 North State Street for $72.5 million in April. With 216 rooms, that’s nearly $335,700 a key.

It was the top commercial investment sale of April 2019.

The hotel, which was renamed “Eurostars Magnificent Mile,” is managed by the Spanish firm Eurostars Hotel Company.

In 2008, the 26-story hotel was completed by the Neighborhood Development Corporation, which was later rebranded as Rebel Hospitality. Company founders Anthony Klok and Gene Kornota manage the entity that sold the building to Ortega’s Ponte Gadea.

4. Kimpton Hotel Palomar Chicago | Service Properties Trust | $54.5 million

In October, Kimpton Hospitality Partners sold its 261-room hotel at 505 North State Street to Service Properties Trust, a Massachusetts-based real estate investment trust, for about $209,000 per room.

The 36-story building, whose upper floors consist of apartments, was developed in 2010 by John Buck Company and Teachers Retirement System of Illinois.

The Kimpton Hotel Palomar Chicago is one of over 60 Kimpton-branded hotels worldwide.

5. Courtyard by Marriott Downtown/River North | Blackstone Group | $40.9 million

New York-based financial giant Blackstone Group invested in Downtown’s strong hotel market with the purchase of this 337-room River North Marriott at 30 East Hubbard Street in July. It paid about $121,000 per room.

Earlier this year, the seller, Maryland-based Host Hotels & Resorts, was seeking to offload a number of other Chicago-area Mariotts, including the 256-key Marriott Suites O’Hare and the 254-key Chicago Marriott Suites Downers Grove, as part of a portfolio sale.

In 2018, Blackstone sold its majority stake in the Hilton hotel chain for $1.3 billion, and in 2012, the firm paid $1.9 billion for the Motel 6 chain.

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