This Week's Chicago Deal Sheet
Chicago's hotel sector continued showing signs of distress this week, this time with the announcement of the city’s second-largest hotel moving toward a foreclosure sale for a fraction of its value.
Cook County Judge Edward Robles issued the order of foreclosure against New York-based Thor Equities for defaulting on its $333.2M mortgage tied to the Palmer House Hilton Chicago, Crain’s Chicago Business reported.
The 1,635-room hotel, the second largest in the city after the Hyatt Regency, was valued at $328M in March, a far cry from the $560M it was appraised for in 2018 when Thor took out the mortgage.
Thor has a separate $94M mezzanine loan tied to the Palmer House that was sold off to CMBS investors.
A sheriff's foreclosure sale is likely in the future for the property, as Wells Fargo, a trustee overseeing the $333.2M loan, could bid and take control of the hotel with court approval. The lender could then sell the hotel free and clear of the court system. Crain’s cited a Bloomberg report tied to the CMBS loan stating that Wells Fargo expects a sale to be approved and completed in August.
Thor has another pending foreclosure lawsuit on the 60K SF retail part of the Palmer House property, per a foreclosure complaint filed in December 2020.
Residential real estate firm Baird & Warner has hired Bob Kohler, formerly of Compass, as vice president and sales manager of the firm’s Winnetka office. Kohnler brings 17 years of experience with Coldwell Banker, where he served in various roles in residential and commercial markets.
The company has also promoted Negeen Masghati, who has been with the firm since 2014, from assistant manager of the Lincoln Park office to vice president and sales manager at Baird & Warner South Loop.
Commercial real estate firm Urban Innovations promoted Joi Harrell to general manager and Fabian Ratulowski to vice president of accounting. Harrell is responsible for overseeing daily operations of Urban Innovation’s commercial portfolio and supervising a team managing 1M SF of commercial properties in River North and Milwaukee’s Westown. Ratulowski will continue directing fiscal responsibilities for the company and is tasked with improving the company’s financial performance.
Rick Nevarez has been promoted to director of acquisitions and Joe Young to managing director of asset management and acquisitions at Clear Height Properties in west suburban Oak Brook. Nevarez, who has been with Clear Height Properties since 2015, will focus on developing new broker relationships as the company looks to expand in markets across the U.S. Young, who has been with the company for four years, will now oversee and manage the asset management department.
Interra Realty, a Chicago-based commercial real estate investment services firm, negotiated the sale of a two-building multifamily portfolio in Logan Square for $2.9M, or approximately $205K per unit. The portfolio comprises 3856 West Diversey Ave. and 2544 North Harding Ave., totaling 15 units. The properties have one studio, two one-bedroom, nine two-bedroom and three three-bedroom units. Interra Senior Managing Partner Brad Feldman and Director Jeremy Morton represented the confidential seller.
Riverside Investment and Development has signed three new tenants to a combined 153K SF at a property at 320 South Canal. The new deals are 89K SF to Skadden Arps, 55K SF to National Futures Association and 8K SF for Ullico. They join anchor tenant BMO and two other law firm tenants, Chapman & Cutler and Faegre Drinker. The property, which is connected directly to Union Station, first opened its doors in January.
Highpoint at 8000 North, a luxury apartment building in northwest suburban Skokie, is over 50% leased. Located at 8000 Lincoln Ave., the 12-story, 153-unit property features one-, two- and limited three-bedroom units and has housed residents since February in downtown Skokie. The project is a public-private partnership with the Village of Skokie and Murphy Real Estate Services, with property management services provided by Lincoln Property Co.
Luxury rental community One Oak Brook Commons is 50% leased. The 17-story, 250-unit apartment building at 2150 McDonald Drive is western suburb Oak Brook’s first luxury residential building and is part of a mixed-use community consisting of restaurants, retail and medical office space. The building has achieved the highest rental rates in the suburbs, according to Luxury Living Chicago Realty founder and CEO Aaron Galvin.
CONSTRUCTION AND DEVELOPMENT
Bell Works Chicagoland has begun construction on Fairgrounds World’s Fair, a café concept from Fairgrounds Craft Coffee and Tea, in northwest suburban Hoffman Estates. The 6K SF space will feature 137 seats, a 45-seat outdoor patio and a cocktail bar with beer and wine on tap in addition to coffee and tea drinks. It is expected to begin welcoming customers in Q4.
THIS AND THAT
French fashion house Celine is opening a 5K SF boutique at 939 North Rush St., near the Waldorf Astoria hotel. The boutique will be the first Midwest store for Celine and will join other luxury retailers like Versace and Dior in the Gold Coast area. The storefront is a new two-story building developed by JMB Realty.