Related exited ownership of the top floors of a downtown Chicago hotel it seized in 2018 after making a $92 million foreclosure complaint against its previous owner.
The New York real estate firm’s lending arm sold the fourth and likely final package of rooms on the highest six floors of the 26-story Hilton DoubleTree at 300 East Ohio Street in Streeterville, public records show. The deal marks the completion of a conversion of 122 hotel rooms — a quarter of the 500 previously there — into 78 studio and one-bedroom timeshare units that Orlando-based Hilton Grand Vacations agreed to buy in phases for $54 million.
The four bulk sales of timeshare units posted in Cook County records since that agreement was made with Hilton Grand total just $45 million, and a termination of the timeshare sales agreement was also recently filed on the property along with Hilton Grand’s latest closing on a $15 million chunk of units.
Related and Hilton Grand didn’t respond to requests for comment on the discrepancy nor the final cost of the conversion project, which was started well before the pandemic bludgeoned travel. Chicago’s tourism sector has lagged the recovery of other cities, yet records show dozens of timeshares have been sold by Hilton Grand for prices as much as the low six figures over the past two years. The property’s overall performance since its repositioning isn’t clear.
Related wrested control of the property from San Francisco’s Chartres Lodging Group, which gave its lender the keys in 2018 in lieu of battling a foreclosure after defaulting on debt, although it remained an investor in the property.
Chartres’ ownership was stymied by an expanding supply of Chicago hotel rooms last decade. Some 6,000 were added between 2014 and 2017, when its Ohio Street property fell into distress just after the company lost two other Chicago hotels to foreclosure.
Oversupply remains a factor in the recovery from the health crisis and was cited by California’s Sunstone for its decision to sell two Hilton-operated hotels in Chicago for $130 million this year, a big drop from their pre-pandemic valuations.
Hilton Grand last year also bought a Midtown Manhattan hotel under development while the property was in distress for $58 million from a lender.
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