CHICAGO — The real estate investment banking team at Jones Lang LaSalle has secured a $365 million refinancing package for Chicago’s Palmer House Hilton, a 1,639-room, full-service luxury hotel owned by Thor Equities. J.P. Morgan Chase provided a five-year, floating-rate loan as part of the overall financing.
“This refinancing will allow Thor Equities to continue to augment its ongoing efforts to maintain the Palmer House’s status as a crown jewel of Chicago,” says Joe Sitt, CEO of New York-based Thor Equities, which acquired the Palmer House Hilton in August 2005 from Hilton Hotels Corp. for $230 million.
One of the most famous hotels in the world, the Palmer House was built by wealthy entrepreneur Potter Palmer. The hotel opened on Sept. 26, 1871, and burned to the ground 13 days later during the Great Chicago Fire.
Undeterred, Potter Palmer began construction on a new hotel across the street from the former building and reopened it in July 1873. It was the first hotel to be equipped with electric lights and telephones in each room.
Between 1923 and 1925, a new hotel was built on the same site to accommodate increased demand. The property is situated on two-thirds of a city block within the Loop, with the entrance on Monroe Street and frontage on State Street and Wabash Avenue.
The 24-story main building is comprised of the 1,639-room hotel sitting atop a 57,000-square-foot, street-level retail arcade, a 177-space underground valet parking garage and a full basement.
In October 2008, Thor Equities completed a $131 million renovation that resulted in numerous infrastructure improvements, refurbished guestrooms, public spaces and meeting spaces and a number of food and beverage operations.
Matt Comfort, JLL executive vice president, and Keith Largay, senior vice president, led the team on this transaction along with Managing Director Dave Hendrickson and Vice President John Nugent.
“The strong cash flow of the Palmer House Hilton was integral to securing financing for the loan,” says Comfort. “This historic landmark and an irreplaceable trophy asset recently underwent a comprehensive renovation that strengthened its operating performance and market positioning.”
Thor Equities has an international retail, office, hotel, and residential portfolio valued at more than $5 billion and totaling more than 15 million square feet. The company also is widely recognized as a leader in urban real estate development, leasing and management.
Some of Thor’s other notable holdings include 760 Market Street, a mixed-use retail and office building in San Francisco, and Burlington Arcade, a retail street in Westminster, London, England.
— Matt Valley