Iconic Chicago Venue Could be Converting Into Hotel Space

Chicago-based real estate firm Hearn is deep in negotiations with Marriott International to bring a luxury hotel to the former John Hancock Center.

If the deal goes through, it would mean a new era for one of the Magnificent Mile’s jewels, according to Crain’s. Around 400,000 square feet that was previously earmarked for medical tenants would be transformed into a 350-key, Edition-branded luxury boutique hotel at 875 North Michigan Avenue.

Rooms would be built from floors 23 through 34 of the 100-story tower, according to the outlet.

Hearn has held the office portion of the building since 2013, but has struggled to reduce its vacancy after the pandemic pivot to remote work, according to the publication. Portions of the available space were rebranded to the “Mag Mile Medical Pavilion” in 2022, explicitly targeting hospitals and physician practices with administrative and outpatient office space. The skyscraper’s 900,000 total square feet of office space still sit roughly half-empty.

There is however one potential carrot left to dangle: Hearn still controls the naming rights to the hotel, which lost the “John Hancock Center” moniker in 2018. The outlet could not confirm whether the naming rights to a hotel are a part of the deal or not. The mixed-use building also contains retail space in its lower floors as well as upwards of a hundred residential condos.

As the Chicago tourism industry attempts to rebound from a half-decade-spanning post-pandemic depression, iconic downtown venues are pivoting to hotel space. In May, the Chicago City Council approved a 1.5 percent surcharge on downtown hotel room rates as part of the renewed tourism effort, in efforts to double the Choose Chicago tourism budget. The surcharge is tacked on to an existing 17.5 percent tax, potentially giving the city a substantial war chest for tourism marketing efforts. Elsewhere, the lower 10 floors of the BMO Harris Bank building are also being converted into hotels in the Bethesda, Maryland-based Marriott International family.

— Hunter Cooke