Hawkins Way Capital Scores $5M Refinancing for Chicago Hotel

A refinancing deal set a dispute between a River North hotel owner and its lender on a course to resolution.

Hawkins Way Capital secured a $5 million loan from Symetra Life Insurance Company for its Found Chicago hotel, at 613 North Wells Street, which is operated by short-term rental company Sonder, Connect CRE reported.

The loan, brokered by Meridian Capital Group, is a lifeline for the 60-key hotel, formerly known as the Olympia Building.

Skokie-based Barnett Capital recently filed a foreclosure lawsuit against Hawkins Way, alleging it owed $5 million on a loan that matured in December.

California-based Hawkins Way claimed it was late on its payment due to “administrative reasons” over the holidays and that it was working to secure refinancing.

“Our existing lender took the most aggressive position, unfortunately,” Hawkins Way’s Lenny Ross previously told The Real Deal.

The new loan could also disjoint Hawkins and Sonder’s partnership, as Hawkins Way plans to manage the property itself, rather than lease it. Thus, Sonder’s role in overseeing the hotel is unclear moving forward.

Sonder has dealt with significant challenges over the past few years. Its stock price has plummeted nearly 90 percent since it became a publicly traded company in 2022.

The 25,000-square-foot Found Chicago, acquired by Hawkins Way in 2016, features a restaurant, cafe and speakeasy-style bar.

In other hotel refinancing news, Chicago developer Michael Reschke recently secured a $113 million loan from an affiliate of Union Labor Life Insurance for the 381-key Residence Inn Chicago, at 11 South LaSalle Street. The loan replaces a $141 million mortgage from Goldman Sachs that Reschke had obtained in early 2021 and was set to mature in February.

—Quinn Donoghue