CHICAGO—As reported in GlobeSt, earlier this week Olshan Properties completed its roughly $60 million purchase of the Hilton Orrington in suburban Evanston. The big price will certainly heighten the interest of the many owners in the region exploring the possibility of a sale, and it also seems apparent that investors from across the US are checking out a number of Chicago-area properties. 

"With our focus on upscale hotels in supply-constrained markets, we've been looking at Chicago for some time and were particularly drawn to the Hilton Orrington Evanston for its proximity to Northwestern University as well as its recent renovation," Michael Odell, managing director of capital markets at Olshan, tells GlobeSt.com.

And the New York-based company was far from the only interested party. "Due to the high quality of the asset, its location in a dynamic urban destination market and its strong operating fundamentals bolstered by strong Big 10 university demand generators, the hotel was highly sought after," JLL managing director Adam McGaughy tells GlobeSt.com.  Along with senior vice president John Nugent, he represented Carlyle Group and Dow Hotel Co. in their sale of the hotel

"The deal size and positioning as one of Chicago's premier North Shore assets led to strong interest across all major investor types including REITs, private equity groups and third party management companies. Investors recognized the uniqueness of this hotel and scarcity of similar product in Evanston, which led to competition for the asset very similar to what we have seen in marketing hotels in downtown Chicago."

The 269-key, full-service Hilton Orrington first opened in 1928. The previous owners completed a $5.1 million renovation this year that focused on guestrooms, the lobby and select meeting areas. The hotel hosts many weddings in its 5,800 square foot Grand Ballroom, which includes a promenade with panoramic views over Lake Michigan and downtown Evanston. It also features a 12,000 square foot IACC-certified conference center.

"Chicago and its suburbs are always of interest to national hotel investors," McGaughy adds. "I would say that this particular hotel was unique since it is fee simple interest and located within blocks of Northwestern University's main campus and Lake Michigan. In addition to its string value as a going concern, the underlying real estate fundamentals helped enhance value. Evanston is a destination hotel market and is able to generate the highest ADR levels when compared to other Chicago suburban markets."

And 2016 could also shape up as a great year for hotel sales. "We are seeing a number of local owners explore sale possibilities in downtown Chicago as well as the suburbs," McGaughy says. "Operating fundamentals are positive, the capital markets remain highly liquid and several owners that bought hotels over the past five years are nearing the end of their holding term."