Sterling Bay has sold a 200-room hotel in Chicago’s Fulton Market, the latest result of the developer’s efforts to unload properties in the former meatpacking district that it has played a major role in transforming in recent years.
Sterling Bay and Greenwich, Connecticut-based investment partner Wheelock Street Capital on Monday announced they have sold the 14-story Hyatt House Chicago/West Loop-Fulton Market hotel. The buyer was Columbus, Ohio-based hospitality investor Rockbridge.
The sale price was not disclosed for the hotel at 105 N. May St., which Sterling Bay completed in 2019, the year before the arrival of COVID-19 devastated the hospitality industry.
A sale of the hotel comes as Sterling Bay has been looking to sell other properties in Fulton Market as the firm tries to line up new investors to restart work on its $7 billion Lincoln Yards mixed-use project on the city’s North Side. Sterling Bay also has put sites near the 55-acre Lincoln Yards site on the market for sale.
Before the recent move to cash in on several Fulton Market properties, Sterling Bay was one of the driving forces in the neighborhood’s evolution from gritty past to waves of residential, office and hotel high-rise development. Fulton Market in recent years emerged as the fastest-growing urban office market in the country, a CoStar analysis found.
Sterling Bay developed McDonald’s global headquarters and Google’s Midwest headquarters in the neighborhood west of the Loop business district.
Sterling Bay three times this year has put land zoned for large projects on the market for sale in Fulton Market, most recently hiring brokers to seek a sale of a site at 1200 W. Carroll Ave. where the firm previously had planned to build a 14-story, nearly 500,000-square-foot office building.
Before that, Sterling Bay put a site at 345 N. Aberdeen St. that has zoning approval for 559 apartments and a neighboring site at 370 N. Carpenter St. zoned for a 390-unit multifamily tower on the market for sale.
Sterling Bay’s sale of the Hyatt House comes around the time a $61 million loan on the property was set to mature. The floating-rate loan from Argentic was for five years, JLL said in a statement in 2019 when it arranged the financing.
Pancake House Lease
Before the sale, Sterling Bay filled all 5,244 square feet of retail space at the base of the building with a lease to The Original Pancake House, Sterling Bay said in the statement.
It will be the breakfast restaurant group’s sixth Chicago-area location, and its first in Fulton Market, upon opening in spring or summer of next year, according to Sterling Bay’s statement.
The extended-stay Hyatt hotel has benefitted from business generated by McDonald’s and its Hamburger University training program within the headquarters at 110 N. Carpenter St. alongside the hotel, generating thousands of booked room nights per year, Crain’s Chicago Business reported in 2021 when the hotel first went on the market for sale, citing JLL materials.
Rockbridge did not immediately respond to a request for comment from CoStar News. Rockbridge’s deal for the hotel was previously reported by Hotel Business.
“Hyatt House was an exciting and important development for Fulton Market, and we are pleased to see the property fully leased before the sale,” Sterling Bay CEO Andy Gloor said in the statement. “Our ability, in close partnership with Wheelock, to successfully take such a project from construction to financing, leasing and sale is a testament to our team’s incredible track record in commercial property development.”
For the Record
The sellers were represented by JLL brokers Adam McGaughy and John Nugent.