CHICAGO — A luxury hotel, the closest one to Navy Pier in Chicago, has traded hands for $126 million, or approximately $242,000 per key. Chesapeake Lodging Trust (NYSE: CHSP) has acquired the 520-room W Chicago — Lakeshore from Starwood Hotels & Resorts (NYSE: HOT).
“This is a unique opportunity for Chesapeake to expand its Chicago footprint with the only lakefront, luxury-branded hotel in Chicago,” says James Francis, president and CEO of Chesapeake. “The acquisitions further complements and creates operational and sales synergies with our W City Center property that we also purchased from Starwood in May of last year.”
The W Chicago — Lakeshore features one three-meal restaurant, two full-service bars, the 9,600-square-foot Bliss Spa, SWEAT fitness center and more than 12,000 square feet of meeting and event space. The 32-story hotel is located at 644 N. Lake Shore Drive in Chicago.
The buyer plans to invest between $35 million and $38 million to renovate the property, which is expected to begin in the fourth quarter of 2013. Starwood will continue to manage the hotel under the W flag.
“The W brand has evolved into one of the world’s most recognized luxury lifestyle brands and we are energized about elevating the Lakeshore property to the highest of standards and exceeding our guests’ expectations,” Francis says. “This is an outstanding piece of real estate with a truly unique market position and through this renovation program, we will ascertain the true potential of the W Lakeshore.”
Starwood’s stock price closed at $54.10 per share on Wednesday, up from $37.66 per share a year earlier.
Chesapeake owns 13 hotels totaling 4,036 rooms in six states and Washington, D.C. It’s stock price closed at $17.99 per share on Wednesday, up from $11.66 per share a year earlier.
— Savannah Duncan