Hotel of Presidents Sold to Vinayaka Hospitality for $43M

A slice of American history in downtown Chicago sold to a local investor for upwards of $43 million.

Vinayaka Hospitality acquired the Loop’s 355-key Blackstone hotel from Fundamental Advisors and Sage Hospitality Group, according to CoStar. JLL brokers Adam McGaughy and John Nugent represented the sellers. Vinayaka paid around $121,000 per room to purchase the property.

The sale comes in the middle of a substantial push from the Chicago tourism board to juice its hospitality sector via a 1.5 percent surcharge. The added tax is intended to double the budget of tourism agency Choose Chicago, and was self-imposed by downtown hotel owners.

The site, which sits at 636 South Michigan Avenue, was where Ohio Senator Warren Harding emerged from what was described as a “smoke-filled room” with the 1920 Republican nomination for president. The phrase stuck in American political vernacular ever since as a way to describe secret political gatherings where high-level decisions are ratified behind closed doors.

The 23-story Blackstone hotel has hosted a dozen presidents over its century-plus existence, earning the nickname “Hotel of Presidents,” and enjoys status as an official Chicago landmark, according to the publication. As a part of Marriott’s Autograph Collection inventory of unique hotels, the Blackstone offers a three-room suite named after the political phrase that the hotel claims to be the exact place where Harding was nominated.

Despite the building’s deep ties to the country’s history, it sold for a fairly steep discount. According to the outlet, New York-based Fundamental Advisors and Denver-based Sage acquired the building for $59.5 million in 2016, and the duo has tried multiple times to offload the property. Chicago-based Vinayaka snagged the property for $16.5 million less than the 2016 purchase price. That’s a nearly 28 percent discount.

Fundamental Advisors and Sage have been trying to sell the Blackstone hotel for years, including a desperate 2022 attempt with debt deadlines rapidly approaching. Over the years, they’ve made around $12 million in renovations to the landmark.

— Hunter Cooke