Chicago hotel occupancy is hovering at just under 30 percent, but a new refinancing deal on a Downtown property may be a glimmer of hope for the future.
A venture controlled by Prime Group secured a $141 million loan on its 381-key Residence Inn Chicago Downtown, Crain’s reported. It is one of the few Downtown hotels to snag a new loan in the last year, according to the report. The debt includes senior and mezzanine loans on its 38-story building.
The financing paid off a $68 million construction loan from 2013, in addition to an unspecified amount of preferred equity from Goldman Sachs. That went toward the $140 million redevelopment to transform the historic building at 11 South LaSalle Street into a hotel. It opened in 2015.
Prime CEO Michael Reschke did not name the lender on the new debt, or provide its term, according to the report.
In Chicago, hotel occupancy has been among the lowest nationwide throughout the pandemic. As of the final week in January, occupancy was at 29 percent and revenue per available room was just $21.81, according to hospitality research firm STR.
But Reschke said he sees better days ahead, specifically by early spring 2022. That’s when he said the Chicago hotel market would hit “near full recovery,” according to Crain’s.
Prime has been an active player in the Chicago market. Among its projects was a $93 million effort to convert the top five floors of the JW Marriott Hotel downtown from office into a separate boutique canopy hotel. [Crain’s] — Alexi Friedman