Investor Acquires Suburban Chicago Extended-Stay Hotel

A local investor is continuing his buying streak in suburban Chicago’s hospitality market, betting on a rebound with his third major hotel pickup in under two years.

A venture led by Parag Patel acquired the 107-room Home2 Suites by Hilton in Schaumburg for $13.1 million, Crain’s reported. That’s $122,400 per key.

The deal, finalized in March, marks Patel’s third suburban hotel purchase since mid-2023 and adds to a growing bet on extended-stay properties across the region.

The seller of the four-story hotel at 1300 East American Lane was an affiliate of Oak Brook-based Inland National Development, which built the property in 2017. It sold for about $122,400 per key.

It sits just blocks from Woodfield Mall and benefits from proximity to Schaumburg’s major corporate hubs, including Schaumburg Towers and the Schaumburg Corporate Center, office clusters that have outperformed much of the vacancy-ridden suburban office market.

Patel previously purchased the distressed Aloft Bolingbrook for $17.3 million last year, about $110,000 per key, and the Courtyard Chicago O’Hare for just over $20 million in September, at $105,000 per key. The three deals bring Patel’s total investment in suburban hotels to roughly $50 million.

Patel’s strategy hinges in part on two key tailwinds: a deep local labor pool and the continued rise of extended-stay travel, which gained momentum during the pandemic.

He also cited strong performance at Home2 Suites, which caters largely to corporate travelers and “bleisure” guests, those combining business and leisure travel.

Among 31 hotels in Schaumburg, revenue per available room averaged $72.49 last year, up from pre-pandemic levels but still lagging when adjusted for inflation, according to CoStar. Industry analysts say extended-stay hotels remain resilient in times of economic uncertainty and can serve as substitutes for housing in tight rental markets.

Hilton and Marriott recently launched brands aimed at extended-stay travelers, signaling investor appetite for the segment remains high. Patel has operated hotels across Illinois and Wisconsin for more than a decade. The fundamentals for suburban Chicago are solid and the Home2 Suites is already outperforming expectations, he said.

— Judah Duke