CHICAGO — Carey Watermark Investors Inc. (CWI), a New York-based, non-traded REIT, has acquired a 553-room, full-service hotel in downtown Chicago for $139 million.
CWI purchased the Renaissance Chicago Downtown Hotel, which is located at 1 W. Wacker Drive across from the Chicago River, from the Royal Bank of Scotland Group PLC. The bank repossessed the property last year from Chicago-based private equity firm Walton Street Capital LLC, which owed $175 million in debt, according to Chicago Real Estate Daily.
“Given an attractive purchase price, the growing Chicago market, and what we anticipate will be the positive impact of our planned capital improvements over the next two years, we believe that the investment will generate solid risk-adjusted returns for our investors,” says Michael Medzigian, CEO of CWI.
The purchase price also includes an additional $27 million for renovations and other acquisition-related costs. The acquisition was financed with $90 million of debt.
Constructed in 1991, the 533,323-square-foot hotel features 35,000 square feet of meeting space and 7,800 square feet of retail space. The Renaissance Chicago Downtown Hotel also includes an indoor pool and whirlpool, full-service spa, fitness and business centers and three food and beverage outlets — Great Street Restaurant, Bar Novo and Aroma Cafe
Located across from and overlooking the Chicago River in Chicago's Central Business District, the hotel is within close proximity to 129 million square feet of office space and leisure destinations such as Millennium Park, Navy Pier, the Magnificent Mile and River North entertainment district.
“We view the acquisition of the Renaissance Chicago Downtown as a rare opportunity to invest in a premium-branded, institutional-quality hotel, with an A-plus location in one of the largest and strongest markets in the United States,” says Medzigian.
Marriott International will continue to operate the hotel under a long-term management agreement.
Carey Watermark is a real estate investment trust formed in 2008 by New York-based W.P. Carey Inc. and Watermark Capital Partners LLC, a Lake Forest, Ill.-based hotel investment firm.