A 174-room hotel near Chicago’s Magnificent Mile shopping district that was hit with a foreclosure suit less than a year into the COVID-19 pandemic has sold for less than $17 million, a discount to the previous owners’ debt.
The Holiday Inn Express Chicago Magnificent Mile hotel sold last week for $16.43 million in an auction by Ten-X, according to the real estate auction firm and CoStar data.
A Florida-based buyer took over the 15-story hotel at 640 N. Wabash Ave. more than three years after the property joined waves of hotels falling into financial distress in the months after the pandemic began.
The previous Chicago-based owners, Oxford Hotels & Resorts and Gettys Group, were hit with two foreclosure suits on two hotels for about $70 million combined in late 2020.
Those firms in 2022 sold the other Chicago hotel, the 228-room Hotel Felix in River North, to a different investor for almost $29 million, also below the value of the debt.
In the latest deal, Oxford and Gettys still owed almost $21 million on a commercial mortgage-backed securities loan that matured this January, according to CoStar loan data. The special servicer on the loan, LNR Partners, took back the property in a judicial sale in December 2022, according to Cook County property records.
The buyer of the Holiday Inn Express near North Michigan Avenue retail was Peter Patel of Delray Beach, Florida-based Formation Capital, according to the CoStar data. Patel declined to comment to CoStar News. A limited liability company connected to the property lists Piyush Viradia, also of Delray Beach, as the manager, according to the Illinois secretary of state’s website.
The sale price is $94,440 per room.
Previously known as the Hotel Cass, the Holiday Inn Express reopened in May 2023 after shutdowns early in the pandemic and the subsequent foreclosure, according to a brochure from the auction offering.
The sale included the ability to retain the Holiday Inn Express brand with a new long-term license agreement with IHG, according to the brochure.
Gettys declined to comment to CoStar News about the sale, while LNR and Oxford did not respond to requests to comment.
Ten-X is a unit of CoStar Group, the publisher of CoStar News.
For the Record
The sale was brokered by Andrew Makhlouf, Mike Schlictman, Brent Clemens and Bennett Webster of Paramount Lodging Advisors.