226 W. Jackson Blvd., Chicago
CHICAGO—Locally-based Phoenix Development Partners' redevelopment of a storied 14-story office building into a dual-branded hotel will be funded in part by $9.5 million in crowdfunding raised on online platform CrowdStreet.
Phoenix Development recently acquired the 238,000-square-foot building located across the street from Willis Tower in Downtown Chicago from City Colleges of Chicago for $32.7 million. The building was designed by Frost and Granger and completed in 1904, according to Chicago Architecture.
The firm plans to redevelop the property at 226 W. Jackson Blvd. into a dual-branded hotel, with a 135-room Hilton Garden Inn and a 214-room Canopy by Hilton. The total cost of the project, including property acquisition, has been estimated at $136 million. The project will also include a rooftop restaurant.
In addition to the crowdfunding, the project's financing also involves $90 million senior debt and $26.5 million in sponsor equity. According to Phoenix Development's website, Goldman Sachs is a lender on the project.
John Mangel, CEO of Phoenix Development Partners, says this was the first time the firm raised money online, but notes that the adaptive reuse project is in the company's largest to date, "so we thought we'd give it a try." A total of 200 individuals invested in the offering on CrowdStreet.
He adds, "We also thought a wider group of individual investors would find this project attractive, with its superior location, superior product with Hilton, and historic tax credit component. The CrowdStreet community recognized and embraced what's special about this deal. We look forward to sharing more opportunities on CrowdStreet, and to developing long-term relationships with the new investors who have joined with us to fund this project."
Construction on the redevelopment project is expected to be completed in 18 months.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
