Hilton Suites on Mag Mile put up for Sale by Lender

Another Gold Coast building could be changing hands as Chicago’s premier luxury shopping district owners look to test the seller’s market.

The 267,800-square-foot Hilton Suites at 198 East Delaware Place is a little bit different from recent retail building sales or office redevelopment projects. LNR Partners represents the bondholders who foreclosed on the 30-story hotel three years ago, who have now hired JLL brokers Adam McGaughy and John Nugent to sell the property, according to Crain’s. Cranston, Rhode Island-based real estate investor Procaccianti, the previous owners, gave up the hotel through a deed-in-lieu of foreclosure tied to almost $70 million in debt on the property.

CoStar data has the building pegged at a $48 million valuation, according to the outlet. There is no asking price listed. Marketing from JLL positions the hotel as a residential redevelopment possibility, noting that the zoning regulations are already in place. Rebranding is also a possibility. The outlet noted that the Hilton Hotels contract runs out at the end of 2026.

As Chicago’s housing market crawls its way through a construction pipeline slowdown, more and more developers are looking to convert unused office space to hotels or residences. Chicago-based real estate firm Hearn is reportedly deep into negotiations with Marriott International to redevelop 400,000 square feet of the former John Hancock Center into a luxury 350-key hotel. Previously, the space was earmarked for medical industry tenants.

The rest of the Mag Mile is seeing changes in retail offerings. While luxury brands are still the top dog in the area, more and more spaces are being converted into destination-based experiential retail or lower-dollar apparel stores. Kim Kardashian’s Skims brand occupies the site that used to hold a Wintrust Bank, and the Candy Hall of Fame Experience is moving into 830 North Michigan Avenue. While the market hasn’t returned to pre-pandemic heights, there are signs of a rebound like MetLife’s $170 million overhaul of Water Tower Place.

— Hunter Cooke