Onni Group, which is preparing to build thousands of apartments on Goose Island and bring new life to an old Loop office building, is taking on a new venture: a hotel in Chicago’s Fulton Market District.
The Vancouver-based company completed a deal to buy the 159-room Ace Hotel for $63 million, Crain’s reported. Onni’s plans for the seven-story property located at 311 North Morgan Street have not been released yet, but the Ace Hotel Group has said that it will no longer manage the hotel beginning Jan. 26.
If the sale goes through, the $400,000 per room price tag will be significantly lower than what Sterling Bay tried to sell the property for before the COVID-19 pandemic hit. The purchase price is just below the $64 million of debt Sterling Bay refinanced the property for in 2018.
Onni is currently working on a massive apartment complex called Halsted Pointe, which will consist of towers more than 50 stories high and have more than 2,600 residential units on Goose Island. In addition to the residential project, Onni is also in the process of renovating the 853,000-square-foot Loop office building at 225 West Randolph Street.
The Ace Hotel deal will be one of the highest per-room totals paid for a hotel in downtown Chicago since the beginning of the pandemic. Similarly, the Thompson Chicago and Talbott Hotel each recently sold for about $300,000 per room.
Sterling Bay, which took a loss on the 16-story Talbott Hotel, has recently been unloading its Chicago hotel properties. The developer is also in the process of selling the 200-room Hyatt House in the West Loop. It has been on the market since October. Sterling Bay is also currently building a new mixed-use tower at 300 North Morgan Avenue that will also include a hotel.
[Crain’s] — Victoria Pruitt