Mike Patel ended a dry spell for suburban Chicago hotel deals with the $19 million purchase of adjacent Hyatt-branded properties, DuPage County records show.
Patel’s SSM bought the two properties along Maecliff Drive in west suburban Warrenville from Kentucky-based lodging company Corporex. The hotels, Hyatt House and Hyatt Place, combine for 246 rooms, and the price was a little over $77,000 per room.
The deal closed in the final days of 2023, running counter to the general trend of a year with few notable Chicagoland hotel deals.
The few hotel deals that did close last year— including the $134 million sale of the newly opened St. Regis in downtown Chicago, as well as more recent trades of suburban Deerfield and Bolingbrook hotels — were thought to be bargains for their buyers.
Corporex made it out of the deal without any trouble from a lender. The price was a little less than the $19.5 million construction loan Corporex took out from U.S. Bank in 2008. Corporex likely made profit during its 13 years of owning and operating the assets; it took out debt against them a couple of times.
The deal shows that SSG has faith — at that price — in the suburban Chicago hotel market’s recovery, despite challenges such as lower office usage in the wake of the pandemic. That trend hits travel, too, crimping demand for hotels near corporate campuses.
DuPage County’s population growth and increasing revenue per available room — an important metric in the hotel industry — were attractive to the Lafayette, Indiana-based buyer SSG, spokesperson Neal Patel said. SSM plans to renovate the properties, which were built in 2010, and “have an incredible upside with hands-on management,” he said.
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Goldman Sachs and Phoenix Development took losses on hotels near corporate campuses in north suburban Deerfield last year. Those properties, which included hotels under the Hyatt and Marriott brands, traded for less per room than SSG’s Warrenville deal.
In southwest suburban Bolingbrook, a separate group of hoteliers named Kevin and Parag Patel in September paid nearly $112,000 per room for a 155-key Aloft hotel that had fallen into foreclosure.