A Chicago developer began construction on a long-stalled hotel project in the Illinois Medical District, on track to complete the third phase of the $300 mixed-use complex project.
A venture of Higginbottom’s East Lake Management & Development is finalizing a $19 million construction loan for a 135-key Hampton Inn & Suites at the Gateway, a 10-acre mixed-use project at the corner of Ogden and Damen avenues, Crain’s reported citing East Lake and its lender Republic Bank of Chicago.
“Hotels are a little tough to finance today, but that location and the proximity to the density there- it’s our belief it will do well,” said Dave Livingston, Republic Bank’s executive vice president and senior lending officer.
While hotels in Chicago, heavily reliant on business travel and conventions, are still clawing their way back to recovery from the pandemic, some real estate investors are betting that the hospitals and academic centers at the Illinois Medical District in the Near West Side will create strong demand for hotels.
Revenue per available room in the city was 40 percent below 2019 levels, compared with an average of 33 percent in the nation’s top 25 markets, according to hospitality data and analytics firm STR.
The hotel, slated for completion by summer 2023, will be the third finished project in Gateway. A pair of single-story retail buildings are almost fully leased to retailers including Starbucks, Chipotle, and Five Guys, and construction of a 161-unit apartment building for medical workers in the medical district is expected to be finished this summer.
Development for Gateway was mostly at a standstill for five years as Chicago developer Jack Higgins struggled to secure financing. In early 2020, Higgins sold his stake in the Gateway to a venture controlled by Elzie Higginbottom, one of the project’s development partners.
[Crain’s] – Connie Kim