CHICAGO (CBS) — Two hotels in Streeterville have new names and owners, and will soon be undergoing major renovations.
The 417-room Wyndham Hotel, at 633 N. St. Clair St. amid the buildings of the Northwestern Memorial Hospital campus, was sold for $88.4 million and will be rebranded as a Hyatt.
A couple of blocks north, the 213-room Affinia, 166 E. Superior St., will become an independent hotel with the new name MileNorth, after a source told the Chicago Sun-Times a sale commanded $35 million.
The deals are examples of investors taking a renewed interest in the Chicago hotel market, in some cases buying out owners who rode out lean years during the recession.
California-based Sunstone Hotel Investors Inc. bought the Wyndham from the Blackstone Group and will rechristen it the Hyatt Chicago Magnificent Mile. The company said it will embark on a $25 million renovation, part of it funded by Hyatt Hotels Corp.
The city of Chicago will retain one Wyndham location – the Wyndham Blake in the old Morton Salt building at 500 S. Dearborn St. Wyndham took over the Blake Hotel in 2007, after the failure plans by federal tax evasion defendant Robert D. Falor, who wanted to turn it into the “Nicky O Chicago” hotel, branded after Nicky Hilton.
When the St. Clair Street hotel becomes a Hyatt, it will join three other Hyatt Hotels just in or near the Central Business District alone – the Hyatt Regency at 151 E. Wacker Dr.; the Hyatt Regency McCormick Place at 2233 S. King Dr.; and the Park Hyatt Chicago, which unlike the soon-to-be-Hyatt Chicago Magnificent Mile, is actually located on the Magnificent Mile at 800 N. Michigan Ave.
Sunstone is a real estate investment trust and the sale was a cash and stock transaction. Blackstone got $30 million in cash and $58.4 million worth of shares, valued at $10.71 each.
Jonathan Gray, global head of real estate for Blackstone, said the investment firm believes Sunstone is “well positioned to take advantage of the continued recovery” in the hotel market.
Meanwhile, the MileNorth, formerly the Affinia has been sold to a unit of Lowe Enterprises Investors by Denihan Hospitality Group, which was advised in the sale by Eastdil Secured.
Lowe is based in Los Angeles and an affiliate, Destination Hotels & Resorts, will assume management.
“We’ve been looking to plant our flag in downtown Chicago for a long time. We think this property is outstanding,” said Mike Everett, senior vice president of acquisitions for Lowe Hospitality Group.
Everett said he expects average room rates and occupancies to rise in downtown Chicago because few new hotels are expected to be built in the near future, and most that arrive are likely to be smaller properties, not giants with thousands of rooms.
He said he’s looking at making the lobby more inviting and giving the hotel a more Chicago personality, with a higher level of service. The prior owners took care of the hotel well and spent $35 million to expand it, converting office floors to rooms, Everett said.
The Lowe firm owns an Embassy Suites in Deerfield, the Orrington Office Plaza in Evanston and an office building at 8501 W. Higgins Ave.
The Chicago Sun-Times’ David Roeder contributed to this report, via the Sun-Times Media Wire.
(Source: Sun-Times Media Wire © Chicago Sun-Times 2012. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)