The owner of a Streeterville office tower wants to convert vacant offices in the building into short-term rental units.
The building’s owner, Group Fox, worked with short-term rental operator Sonder to unveil plans to convert five vacant floors in the office building at 446 East Ontario Street, just West of Navy Pier, into a 101-room hotel, Crain’s reported.
Floors six through 10 in the 60-story building would be redeveloped as rental units available for minimum two-night stays under the proposed plan, which will need to be approved by the City Council.
The proposed change signifies that Group Fox and Sonder have more faith in Chicago’s hotel industry — specifically between Navy Pier and the Northwestern Memorial Hospital campus — than the office market.
The Covid-19 pandemic hit the downtown hospitality sector hard, leading to multiple Streeterville hotels being sold at severe discounts over the past two years.
Demand for short-term rentals from people visiting the medical campus could be on the rise, as multiple apartment landlords have rented out big blocks of units to operators like Sonder to increase revenue on the units in recent years.
The rental units in the tower would range in size from one to three bedrooms and would likely be more similar to Airbnb or Vrbo than to a typical hotel room. An open terrace with landscaping on the sixth floor would also be included in the short-term renter area.
Some residents and aldermen have expressed concerns about the security risks of transient guests disturbing people who live in the same building.
The Streeterville Organization of Active Residents said Group Fox and Sonder’s minimum requirement of two-night stays will help to limit potential problems.
A venture of Group Fox bought the 60-story tower in 2016 for more than $225 million. The tower was built in 1986 and includes 615 residential apartments above the bottom-floor commercial space.
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Commercial
Chicago
388-key Streeterville hotel project looks way past pandemic
[CCB] — Victoria Pruitt