Prime Group lands $140 million refi on Residence Inn
Chicago Hotel occupancy sits at just under 30%, but a new refinance deal on a downtown property could be a beacon of hope for the future.
A Prime Group-controlled company has secured a $141 million loan on its 381-key Residence Inn Chicago Downtown, Crain reported. It’s one of the few downtown hotels to get a new loan last year, according to the report. Debt includes senior and mezzanine loans on its 38-story building.
The financing repaid a $68 million construction loan from 2013, in addition to an unspecified amount of Goldman Sachs preferred stock. This was used for the $140 million redevelopment to transform the historic building at 11 South LaSalle Street into a hotel. It opened in 2015.
First CEO Michael Reschke did not name the lender of the new debt, or indicate its term, according to the report.
In Chicago, hotel occupancy has been among the lowest in the country throughout the pandemic. As of the last week of January, occupancy was 29% and revenue per available room was just $21.81, according to hotel research firm STR.
But Reschke said he sees better days ahead, especially in the early spring of 2022. That’s when he said Chicago’s hotel market would reach “near full recovery,” according to Crain’s.
Prime has been an active player in the Chicago market. Among his projects was a $93 million effort to convert the top five floors of the downtown JW Marriott hotel into a separate boutique hotel. [Crain’s] — Alexis Friedman