A Marriott Courtyard near O’Hare International Airport traded hands earlier this month, in a bright spot for Chicagoland’s hospitality sector.
Buyers Parag Patel and Kevin Patel bought the hotel at 2950 South River Road in Des Plaines for $21 million, or $105,000 per key. They secured a loan from Midland States Bank and closed on the sale of the 200 room property Sept. 10.
Tourism has been returning to Chicago, but hotel revenues haven’t bounced back to pre-pandemic levels. Revenue per available room averaged $148 last year, which is a little lower than in 2019, but it lags far behind when accounting for inflation, according to CoStar.
The sale was a win for its Dallas-based seller NewcrestImage, which bought the property for $18 million ($90,000 per key) last year, records show.
The hotel benefits from its proximity to O’Hare and the Rivers Casino Des Plaines, Parag Patel said. The casino is located directly next to the hotel. The investors are planning a $5 million renovation of the hotel, beginning in December and finishing in one year.
Parag Patel said he hopes to expand his portfolio throughout Illinois as well.
The same buyers were behind the purchase of a 155-key Aloft Hotel in Bolingbrook last year. They snagged the property for $17 million out of a foreclosure sale. The price was $109,700 per key.
The prior owner, LTD, had defaulted on a $26 million loan leading to the foreclosure. It stopped making loan payments in April 2020, when the hotel’s revenue stream, deprived by the pandemic, wasn’t enough to cover its debt service and operational costs. The foreclosure suit was filed in 2021.
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Leading into the foreclosure sale, revenues were coming back. The property’s net cash flow reached $900,000 in 2022 with 63 percent occupancy, up from when it lost $300,000 in 2020 on only 29 percent occupancy, according to Morningstar Credit.
Meanwhile, O’Hare is undergoing a significant expansion and renovation. Renderings of the first phase of the project, known as the O’Hare 21 Terminal Area Plan, were made public in May.
In addition to renovations, the airport will gain a new concourse serving international and domestic flights.
Editor’s note: the subheadline of this article was updated to correct the status of the Marriott Courtyard prior to its sale.