An historic Michigan Avenue hotel is up for sale for the second time amid the pandemic, offering potential buyers another big Chicago lodging property as similar assets teeter on the brink of distress.
A joint venture of New York-based Fundamental Advisors and Denver-based Sage Hospitality Group hired the Chicago office of JLL to find a buyer for the 355-room Blackstone Hotel at 636 South Michigan as they face a looming deadline to pay off the property’s debt, Crain’s reported.
The 22-story landmark hotel overlooks Grant Park and doesn’t have an asking price listed in marketing materials, although people familiar with the property told the outlet it will likely bring in bids between $55 million and $60 million, or $180,000 per room.
The owners of the hotel listed the property for sale about a year and a half ago and failed to find a buyer in the fading post-COVID hotel market. The offering was made as the June 2021 maturity of a $52 million loan against the property was approaching, though the borrowers worked out an agreement to extend the deadline to pay back the debt and held onto the property.
Adam McGaughy and John Nugent with JLL are marketing it for sale.
If the hotel sells at or around the expected price, it would be close to covering the $59.5 million that Fundamental and Sage spent on the property in 2016, yet wouldn’t cover the sellers’ total investment. They spent about $12 million on guest room renovations and amenities.
JLL is emphasizing increased leisure demand within the hospitality sector. It’s also claiming there’s been value added by the hotel’s change to a brand under Marriott’s Autograph Collection from its previous Renaissance branding. The property also has 1,000 square feet of vacant retail space on the ground floor.
It gained recognition partly because multiple U.S. presidents have stayed there. It opened in 1910 and was designated a Chicago landmark in 1998.
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