Park Hotels & Resorts Lists Former W Hotel in Chicago

A Virginia REIT is sticking to its Chicago diet, putting its second hotel on the market in a month as investors remain cautious on the city’s lodging recovery.

Park Hotels & Resorts is looking to sell the 403-key former W Chicago City Center hotel, Crain’s reported, six months after rebranding the property to Midland Hotel Chicago and announcing a major renovation.

The REIT hired JLL to market the 22-story Beaux Arts building at 172 West Adams Street. It had previously planned to overhaul the hotel’s lobby, guest rooms, public spaces and event areas.

Park had pitched the renovation as a high-potential turnaround. CEO Thomas Baltimore in January called the project an “exceptional opportunity to reposition this Chicago landmark.” But the company is now handing that opportunity to a buyer amid its efforts to offload $400 million in “non-core” hotels this year.

The Loop hotel market has seen an uptick in activity since the pandemic slump, but investment sales are scarce. Interest rates and Cook County’s unpredictable property tax assessments have made underwriting difficult. The JW Marriott Chicago across the street, which was repossessed by its lender, has lingered on the market for over a year.

Park, which took over the Midland in 2019 via its acquisition of Chesapeake Lodging Trust, also recently listed the former W Chicago Lake Shore hotel, now rebranded the Wade, as a possible residential conversion.

No asking price has been disclosed for the Midland, but the property was appraised at $73.6 million in April 2021, about $183,000 per room, according to Bloomberg data. At the time, its revenue per available room, a key performance benchmark in hospitality, was still lagging behind peers. RevPAR in downtown Chicago surpassed 2019 levels last year, but the Midland trailed at $168.11, down 7 percent from pre-pandemic figures.

JLL is pitching the listing as a chance for a buyer to capitalize on the hotel’s recent brand refresh under Marriott’s Tribute Portfolio and planned upgrades. The flyer also nods to Google’s redevelopment of the nearby Thompson Center and to other city-backed office-to-resi incentives along LaSalle Street.

— Judah Duke