Fulton Market Developers Eye Global Ambassador Hotel

Developers Shawn Clark and Jeff Shapack are a step closer to starting construction on a massive Fulton Market mixed-use project by closing in on a luxury hotel operator.

Global Ambassador, an upstart five-star hotel brand with a 141-room Phoenix location, is nearing a deal to run the lodging component of Shapack Partners’ and CRG’s planned development at 170 North Green Street, according to people familiar with the deal.

The hotel could take space within a 40-story mixed-use building approved by the city for the site. The plans also include office, retail and apartments, but the developers may still end up further emphasizing one use while scaling back others as they and competitors with shovel-ready sites in Fulton Market vie for corporate tenants.

A Global Ambassador arrangement isn’t closed, but if kept on track, it would add another high-end hotel option to Chicago’s hottest neighborhood for commercial real estate, which already includes a Nobu hotel as well as Soho House and the Hoxton.

Its ultimate outcome will be determined in large part by the office market, which across the nation has become increasingly concentrated in high-end new buildings within transforming neighborhoods, such as Fulton Market.

Meanwhile, the Shapack-CRG venture behind the 170 North Green plan is eagerly awaiting decisions by potential office tenants scouting development sites in the area, according to market sources. As are Sterling Bay and Related Midwest, which respectively have city-approved office tower plans at 330 North Green Street and 725 West Randolph Street.

The logjam in the development market could be unlocked with a move to anchor one of those potential towers by a handful of firms in the financial, legal and consulting sectors considering Fulton Market office space, although commercial real estate decision-making has slowed this year as economic uncertainty ballooned, leasing brokers have said.

The Global Ambassador deal could also be put on hold should a major office deal take shape for 170 North Green that would require non-workspace uses to be whittled down, the sources said. It could also be accelerated, should an office user sign on for some of the space within the building allotted to office by the plans, thus adding more momentum to the development team’s search for financing. Some office tenants may prefer a building with an on-site hotel.

The 170 North Green site and Related Midwest’s on Randolph Street previously made shifts away from hospitality in plans submitted to the city. Related in 2023 pivoted 725 West Randolph from a mixed-use hotel-and-apartments project into office to compete for potentially lucrative tenants seeking upscale workspace in buzzy Fulton Market.

Since developers received city approval in 2022 to build at 170 North Green, it has proven tricky to fund as construction loans got tougher to nail down when interest rates elevated. In 2023 they received city permission to remove the hotel element and replace it with an additional 65,000 square feet of office space, public records show. Now, they’re again leaning into including lodging; they’re approved for 150 hotel rooms in the property.

They also turned the vacant 62,000-square-foot lot — which previously contained the Bridgford Foods building that they bought for $60 million and later demolished — into pickleball courts while waiting to start construction on the permanent development.

The building is also approved to include 275 apartments, with 20 percent of them set aside for households making 60 percent or less of the area median income, as well as 350,000 square feet of office space, in addition to some retail. It’s unclear whether a deal for the Global Ambassador, if finalized, would reduce the amount of space within the building planned for offices and apartments.

Shapack and CRG didn’t return requests for comment, and neither did the Global Ambassador.

Securing the hospitality business could add some allure in their search for a construction lender. It’s unclear if the project will also require an anchor office tenant to sign onto a lease in order to gain funding. The site is encumbered by a $31.3 million mortgage from Missouri-based Citizens Bank that was taken out by the developers to fund their purchase of the site in 2022. The developers’ goal is to replace that debt with a construction loan.

Global Ambassador was started by restaurateur Sam Fox, who opened his first property in Phoenix in late 2023 to critical acclaim, after about a decade of plotting and building the development. If its potential Chicago location is anywhere close to similar, expect it to be swanky: the Phoenix property contains five restaurants, a spa that offers cryotherapy and room rates for an early June stay start at just under $500 a night before taxes, with the 2,000-square-foot presidential suite available for about $3,400, the property’s website said.

Should CRG and Shapack Partners start construction at 170 North Green, it would be the second major Fulton Market project they’ve kicked off in recent memory, after another joint venture of the firms landed an $84 million construction loan for a 29-story, 308-unit apartment building at 220 North Ada Street last year. That project’s total reported cost is $140 million.