The Hotel Felix in River North is heading to the auction block.
Paramount Lodging Advisors will sell the $44.7 million mortgage on the 228-room hotel at an online auction scheduled for Sept. 8, Crain’s reported. A partnership of Oxford Capital Group and Gettys Group defaulted on a combined $70 million in loans on the Hotel Felix and Holiday Inn Express Chicago Magnificent Mile more than a year ago.
The Hotel Felix was among downtown hotels hit hard by the pandemic. In July 2020, it was appraised at $23.5 million, less than half of the $68.8 million it was valued at in 2013, when the venture refinanced the loan. The owners paid $24 million for it in 2007.
More recently, the return of large group events at hotels and an increase in leisure travel has brought occupancy and room rates up to their highest since before the pandemic. Occupancy for downtown hotels averaged 78 percent last month, up from 59 percent the same time last year.
Miami Beach, Fla.-based special servicer LNR Partners is overseeing the loan on behalf of CMBS bondholders. Paramount is marketing the loan as an opportunity to complete the foreclosure and take control of the hotel. Buyers can look into “alternative branding or potential alternative use” for the 12-story building.
Oxford President and CEO John Rutledge said the owners tried and failed to come up with a plan to keep the property.
“Despite several years attempting to create solutions to overcome (pandemic-related) challenges at this hotel, such as identifying a social services agency to occupy the hotel as we did at many other hotels, the lender would not agree to any of our proposals,” Rutledge’s statement said. “As such, we and our partners, reluctantly but voluntarily, agreed to an amicable resolution with the lender.”
The starting bid for the auction will be $7.5 million.
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