CHICAGO-The West is investing in the Midwest, as two California-based investors have purchased downtown Chicago hotels this week in separate deals. Aliso Viejo, CA-based Sunstone Hotel Investors is buying the 417-room Wyndham Chicago for $88.4 million to turn it into a Hyatt, and Los Angeles-based Lowe Enterprises, on behalf of an investment client, has purchased the 28-story Affinia.
Ken Cruse, president and CEO of Sunstone, said in the company’s first quarter report that lodging demand trends continue to improve and fundamentals are very positive. He announced that the company has purchased the Wyndham, at 633 N. St. Clair, with cash and by issuing $58.4 million in common shares directly to the Blackstone Group, the seller, at $10.71 per share.
Cruse said his firm will invest another $15.8 million to complete a renovation and repositioning program for the new Hyatt Chicago Magnificent Mile. “We remain focused in improving our portfolio quality and scale while gradually deleveraging our balance sheet through creatively sourced, attractively valued transactions,” he said in a statement. Sunstone owns 32 major-brand hotels throughout the country.
Denihan Hospitality Group has sold the 213-room Affinia at 166 E. Superior St. to Lowe for a reported $35 million. Denihan bought the hotel in 2006 for $31.2 million. Destination Hotels & Resorts, a Lowe affiliate, will take over the hotel management.
Lowe is rebranding the Affinia as MileNorth, a Chicago Hotel. Bleecker Seaman, Lowe co-CEO, said Denihan had completed a top-to-bottom renovation that upgraded all the guest rooms and reconfigured office floors to more units. “Our team has focused extensively on the downtown Chicago submarket, an area that we expect will grow significantly in the coming years,” Seaman said.
His firm has other Chicago properties, including the Orrington Office Plaza in Evanston, 8501 W. Higgins in Chicago and Embassy Suites Chicago-North Shore in Deerfield on behalf of pension fund clients. Eastdil Secured represented Denihan in the sale.
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