A River North hotel listing could test investors’ appetite for hospitality assets in Chicago.
New York-based Junius Real Estate Partners has hired JLL brokers Adam McGaughy, John Nugent, Mark Jindra and Nick Sullivan to sell the 297-room 21c Museum Hotel at 55 East Ontario Street, Crain’s reported.
It’s unclear how much Junius expects to make in a sale, but the firm bought the 16-story building for $83.1 million in 2018, when it was the James Hotel. That’s about $280,000 per room. The hotel reopened in 2020 after Junius performed a $33.5 million renovation.
JLL is playing up the listing as a value-add investment, with opportunities to upgrade the lobby-level gallery space and 7,000 square feet of meeting and event spaces on the second floor, potentially boosting group occupancy and revenue.
Chicago’s lodging industry continues to make strides on the road to recovery following a few rough years during the pandemic. Revenue per available room in the downtown area averaged $148.29 over a 12-month stretch that ended in November, the outlet reported, citing CoStar. That’s a slight increase from the same period in 2019.
In June, Chicago’s hotel occupancy rate reached 80.4 percent, which was the highest level since pre-Covid days. Hotel revenue through the first half of 2023 was a record high of $1.12 billion. That’s a 24 percent jump from the same period last year, according to data from Choose Chicago.
Only a handful of Chicago hotels have traded in the past year. In May, a joint venture of Miami-based Gencom and Denver-based GD Holdings paid $134 million for the 192-room St. Regis hotel, almost $698,000 per key. Apart from that deal, there have been four hotel sales in the Central Loop over the past 15 months, totalling just under $20 million, the outlet said.
Nationwide, hotel sales dropped 47 percent year-over-year in 2023, according to research firm MSCI Real Assets.
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