A suburban Chicago hotel that’s mired in a foreclosure lawsuit is up for sale in what may be a test of the market as the hospitality industry haltingly emerges from a pandemic that slammed travel worldwide.
The 155-room Aloft hotel at 500 James Avenue in Bolingbrook, owned by LTD Hospitality, was appraised at $17.9 million in April, down from $21 million a year earlier, though an asking price wasn’t disclosed, Crain’s reported. Frontline Real Estate, the broker on the offering, is also the court-appointed receiver.
Chicago hotels have struggled as business conventions, which hotels rely on to fill their rooms, have shut down or gone virtual. Hotel revenue from business travellers probably dropped by $2.1 billion last year from 2019.
Aloft Bolingbrook, which was recently renovated and doesn’t rely on big group bookings, has done better than most, according to Crain’s. Hotels in western Chicago suburbs reported average revenue per available room of $52 in November, or 90 percent of the 2019 average for the same month, the outlet said, citing data STR. Downtown, by contrast, hotels made just 66 percent compared with three years ago.
LTD, based in Virginia Beach, stopped making payments on the loan for the Aloft in April 2020, when it defaulted on its $14.2 million mortgage. The loan has been packaged with other mortgages and sold to commercial mortgage-backed securities investors and the marketing flyer says a buyer could assume the loan. Rialto Capital is overseeing the loan on behalf of CMBS bondholders.
[Crain’s] – Harrison Connery