CHICAGO- Robert Habeeb looks carefully at aging office buildings when he walks through a downtown. In the past ten years, as the president of the Rosemont-based First Hospitality Group, a development and management firm, he has helped transform several under-appreciated properties, whether from the dawn of the skyscraper era or the pre-war fad for Art Deco, into hotels and says this niche now plays a vital role in the revival of the Midwestern region's downtowns.

“These are stately buildings and you can't replicate them today,” he says. A century ago, downtown buildings were more important to a city's identity, and architects were expected to design them with a flourish. “It's rare to find a building that doesn't measure up in terms of aesthetics.”

“But one of the keys to success in this is being selective,” Habeeb adds, since not all historic buildings, however impressive looking, will make great hotels. “The economics have to work for us to do a gut-rehab. Sometimes we look at a building's core and find serious defects,” such as a history of standing water. And others simply have poor views or space too difficult and expensive to sub-divide into hotel rooms.