The owner of two South Loop hotels is facing a nearly $188M foreclosure lawsuit over allegedly failing to make debt repayments on the properties.
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The lawsuit from an affiliate of Acore Capital alleged a venture of SB Yen Management Group failed to pay off debt on the dual-brand Hilton Garden Inn and Homewood Suites at 1101 S. Wabash Ave. and the Best Western Grant Park hotel at 1100 S. Michigan Ave., Crain's Chicago Business reported.
Acore alleges SB Yen defaulted on a nearly $147M mortgage tied to the two properties when the debt matured in September and now owes almost $188M in principal, accrued interest and other fees. SB Yen stopped making monthly loan payments in April 2024, the complaint said.
Acore is looking for a Cook County judge to appoint a receiver for the properties and issue a foreclosure judgment against the SB Yen venture.
Neither Acore nor SB Yen immediately responded to a request for comment.
The properties total 453 rooms.
SB Yen refinanced the debt on the two properties by tying them together with a $146.7M loan from Acore in 2019 — more than the combined total of its $90M construction loan for the dual-brand hotel and $42M loan backed by the Best Western, according to Crain's.
SB Yen and Acore reached an agreement during the pandemic to defer interest payments and restructured terms of the loan to push back the maturity date to September 2024. SB Yen put up at least $3.7M into extending the loan’s maturity date, The Real Deal reported.
But the extension allegedly did not give the hoteliers enough time to repay the loan. Over $60K is being added to the loan each day it remains in default, according to TRD.
Chicago’s hotel and hotel tax revenue reached records in the central business district in 2024, potentially signaling the city had moved past the worst of the pandemic lows. Hotel revenue eclipsed $2.8B in the CBD last year, while tax revenue was about $157M.
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