The world's first Virgin Hotels property is changing hands, with an investment firm known for turning residential and hospitality properties into timeshares taking the plunge on the Loop asset.
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An affiliate of Michigan-based Accelerated Assets bought the 250-room hotel at 203 N. Wabash Ave. at the end of June for about $77.4M from a joint venture of Lionstone Development and Virgin Hotels, Crain's Chicago Business reported. Accelerated Assets targets existing real estate to convert into "world-class consumer vacation ownership resorts in partnership with the leading, branded operators," according to its website.
The sale price works out to over $300K per room, among the highest prices per key paid for a downtown hotel since before the coronavirus pandemic.
The Chicago property opened in 2015 as the first-ever Virgin Hotel after Lionstone and Virgin spent over $117M redeveloping the old Dearborn Bank Building. The hotel was hailed at the time for offering free WiFi and "normal minibar prices," according to a Forbes article on the opening.
It's not immediately clear what Accelerate plans to do with the property, but it has converted resorts to timeshares in New Orleans, Orlando and Chicago. The firm worked with Bluegreen Vacations in 2013 to convert the Hotel Blake boutique hotel into a timeshare.
The hotel still has a few years remaining on a unique tax exemption Lionstone and Virgin used to develop the property. Because the pair refurbished a city landmark, they secured a property tax status allowing the hotel to be taxed at 10% of its assessed value instead of the standard 25%. The incentive ratchets up to 15% of the value in the 11th year and 20% in the 12th year before expiring, which it is set to do in 2027.
A Virgin entity will continue to manage the hotel under the Virgin Hotels brand after the sale, a spokesperson confirmed to Crain's.
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