Chicago’s Kimpton Hotel Monaco is being sold for 35 percent less than its appraised value eight years ago, a stark reminder of just how hard the pandemic has hit the hotel industry.
Xenia Hotels & Resorts, a Florida real estate investment trust, is in contract to sell the the 191-key hotel at 225 North Wabash Avenue to an undisclosed buyer for the equivalent of $188,500 per room, Crain’s reported. Xenia expects the sale of the 13-story building to close by the end of March.
Local investor Inland American Real Estate bought the hotel in 2013 as part of a three-property deal for $189 million. The hotel was valued at $56 million, according to Real Capital Analytics. Inland spun off its hotels into Xenia in 2015.
As of September 21, 62 percent of Chicago hotel loans packaged in commercial mortgage-backed securities had gone into special servicing, with a total unpaid balance of $1.2 billion. None were in special servicing at the end of 2019, according to DBRS Morningstar.
Hotel revenue from business travelers in Chicago this year is expected to have slumped by about $2.1 billion from $2.5 billion in 2019, according to the American Hotel & Lodging Association.
The occupancy rate for Chicago hotels in the last week of November was 48.2 percent, down from 49.8 percent from the same period two years ago, according to STR. Nationally, the lodging association doesn’t expect business travel revenue to return to pre-pandemic levels until 2024.
[Crain’s] — Connie Kim