Hilton Chicago Magnificent Mile transferred to lender
As travel plans disrupted by the pandemic continue to plague downtown hotels, one owner has been forced to make an early departure.
Rhode Island-based real estate investment firm Procaccianti Companies transfers ownership of the 345 key Hilton Chicago Magnificent Mile Suites to LNR Partners, a special duty agent on a $ 77.2 million loan on the property, via a deed in lieu of foreclosure, Crain’s reported.
Procaccianti stopped repaying its loans shortly after the pandemic, which hit less than seven months before its 30-story hotel debt at 198 East Delaware Place fell due. Her current loan balance is just under $ 70 million, according to Crain’s, citing data from Bloomberg.
After the payments stopped, LNR Partners began collecting the hotel’s cash flow and revealed in July that it was in the process of making a deal with the hotel owners to transfer ownership. The hotel’s finances were not good even before the pandemic, generating less than $ 4.4 million in free cash flow in 2019 on $ 20.9 million in revenue, less than the $ 4.9 million dollars that Procaccianti paid for its debt service, according to Crain’s.
Neither Procaccianti nor LNR Partners responded to The real dealrequests for comments.
Procaccianti bought the hotel as part of a larger portfolio in 2005 and spent nearly $ 16 million renovating it before refinancing the property with the current mortgage in 2015, according to Crain’s. At the time, the hotel was valued at $ 112.4 million.
Downtown hotels have defaulted on their loans as the slow return of tourists and business travelers has reduced occupancy rates.
An Oxford Capital Group and Gettys Group partnership defaulted on a total of $ 70 million in loans on the Felix Hotel and Holiday Inn Express Chicago Magnificent Mile in March. The owner of the JW Marriott Chicago also defaulted on a $ 203.5 million loan after failing to repay debt since February.
[Crain’s] – Connie Kim