Inside Chicago’s hotel construction boom
Hotel construction is booming in downtown Chicago. At least 12 hotels representing about 2,700 guestrooms have?recently opened or are under construction, according to The New York Times.
“The city exceeded its 2007 occupancy peak of 74.4 percent last year and there?s lots of room for average daily rate growth,” said Adam McGaughy, managing director of the Midwest hotel business of Jones Lang LaSalle. “When that happens, new supply starts to become part of the conversation.”
The growth is being fueled by smaller lifestyle hotels that appeal to leisure and international travelers.
According to TR Mandigo & Company, a hotel consulting firm, leisure travel now accounts for about 15 percent of the downtown hotel market. That is an increase from 10 percent in the early 2000s, and further increases are anticipated because of an aggressive city marketing program.
Oxford Capital Partners is turning the London Guarantee Building, which it bought recently for $53 million, into a 400-room hotel. Construction is expected to begin early next year and be finished in the fall of 2015.
A.J. Capital also has a project in the same area, a 250-room hotel carved out of the landmark Chicago Athletic Association Building on Michigan Avenue across from Millennium Park. The hotel, which will have 250 rooms and be operated by Geolo Capital?s Commune Hotels and Resorts division, will cost $125 million and be finished in late 2014. It has not been named yet.
A.J. Capital also is working on the new $50 million Soho House in the west Loop meatpacking district. The hotel, which will open next spring, occupies an old industrial building on Green Street and will have about 40 rooms plus extensive restaurant, bar and spa facilities.
London-based Langham Hospitality has opened its fourth U.S. property,?The Langham, Chicago, last week. Located at 330 N. Wabash ? built in 1971 as IBM?s regional headquarters and the last office building designed by famed architect Ludwig Mies van der Rohe ? the 52-story riverfront hotel has 316 guest rooms and 15,000 square feet of meeting and event space, an onsite restaurant and lounge, a fitness center, a pool and a fine art collection featuring more than 140 works.
A Loews Hotel will occupy the lower floors of a 52-story residential building under construction on the north bank of the Chicago River several blocks from Navy Pier. The developer is the DRW Trading Group of Chicago. Loews Hotels will own the hotel, which will consist of about 400 rooms plus 25,000 square feet of meeting space. It will open in 2015. The hotel is costing about $400,000 a room, or about $160 million.
There’s also a 1,200-room?convention hotel?that will be built just west of McCormick Place. The hotel will be operated by Marriott International. The hotel, expected to open in late 2016 next to the West Building, will be a Marriott Marquis, the company’s premium convention center brand.