Less than two months before the pandemic took hold, Akara Partners snagged a $57 million refinance on its newly built 206-room extended-stay hotel in River North.
Almost exactly a year later, as Covid-19 continues to devastate Chicago’s hospitality industry, the developer has recapitalized its Home2 Suites by Hilton property with an investment from Hersha Hospitality Management, Crain’s reported.
Nationwide, the rise in Covid cases and government closures of indoor dining contributed to a loss of nearly 500,000 leisure and hospitality jobs in December.
Earlier this month, Magellan Development Group slashed 301 hotel rooms from its planned mixed-use tower in Lakeshore East. The developer said it would cut the room count to 269 from its approved 570 rooms at 193 North Columbus Drive.
For the Home2 Suites property, Crain’s reported that Pennsylvania-based Hersha now has a controlling interest in the 17-story building, and has assumed the refinance provided by Pimco.
Akara’s Home2 Suites has remained open since the start of the pandemic, though occupancy rates at hotels across the city haven’t cracked 30 percent, according to the report, citing STR research figures.
Akara paid $3.7 million for the then-vacant lot on West Huron Street in 2013, and developed the hotel with a $53.5 million construction loan from Goldman Sachs in 2017. It opened in February 2019.
[Crain’s] — Alexi Friedman