A historic building in Chicago’s Fulton Market that housed the original Schwinn bicycle factory in the late 1800s is in line to be converted to a 140-room hotel serving the city’s ever-expanding former meatpacking district.
Developer Fulton St. and its partners hope to begin renovating the vacant Lake Street Lofts building at 910 W. Lake St. into a Drift-branded boutique hotel by the end of this summer, CEO Alex Najem told CoStar News.
The Chicago-based developer has a signed letter of intent with Drift to manage and invest in the $75 million project, which is expected to open in fall 2025. Najem said. Drift is part of Irvine, California-based TMC Hospitality, the company also behind the Bode hotel brand.
Drift Fulton Market is expected to have a rooftop bar and restaurant with skyline views, a lower-level speakeasy, and a high-end collaborative workspace on the ground floor. The developers are in talks with local food-and-beverage operators and a New York-based company to run the flexible work area, Najem said.
“We’re going to renovate the building to last another 100 years,” Najem said.
A hotel project in the brick and timber structure would add to an already full plate of projects in the neighborhood by Fulton St., which late last year achieved a national rarity by kicking off construction of a more than 360,000-square-foot office building at 919 W. Fulton. More recently, Fulton St. unveiled plans to develop more than 1,500 apartment units on sites west of the office project.
The hotel project’s development team also includes Chicago’s Weldon Development Group and SNK Capital, the investment firm of Shanna Khan, the daughter of Jacksonville Jaguars and Flex-N-Gate owner Shahid Khan. The developers are actively pursuing financing for the project, which also would require a zoning amendment from the city, Najem said.
If the hotel is built as planned, it would add to a burst of development that over the past decade has brought major office and residential towers to the neighborhood west of the Loop business district, as well as boutique hotels such as the Hoxton, Nobu and Soho House.
“Developing a new-construction hotel is very difficult today, but Fulton Market is starved for rooms,” Najem said. “There are only about 600 rooms in the neighborhood.”
The six-story building at the corner of Lake and Peoria streets was completed in the 1880s, and in 1895 it became the original factory of the Arnold, Schwinn & Co. bicycle maker.
A venture of local architect Pat FitzGerald in recent years converted it to an 89-unit apartment building, before a Fulton St. venture bought it for $49 million in December 2022 with plans to include it as part of the 919 W. Fulton office project.
That 11-story project was scaled back to secure $233 million in construction financing last year. The developers decided to use the Lake Street building to address what it views as a dearth of hotel rooms in the expanding area, which a CoStar analysis found to be the fastest-growing urban office market in the country in recent years.
With Harrison Street Real Estate Capital moving its offices to the 919 W. Fulton project and major employers such as Boston Consulting and law firm Greenberg Traurig coming to the neighborhood to join the likes of McDonald’s and Google, and with thousands of apartment units under construction or planned, Fulton St. decided to change its focus for the Lake Street to hospitality.
Rooms will be relatively large, averaging 300 to 400 square feet and ranging up to 1,500 for the penthouse suite, TMC Hospitality co-founder and CEO Philip Bates said.
“The building itself just captures the historic Chicago warehouse charm perfectly,” Bates said. “It’s the original Schwinn bicycle factory with exposed ceilings, great floor-to-ceiling height and wood pillars that are so charming. It just adds to the character of the building. You couldn’t build it again with this kind of charm.”
It will be the first Midwest hotel and the largest overall by rooms for TMC, which previously has opened hotels in Nashville and Chattanooga, Tennessee, Palm Springs and Santa Barbara, California, and San José del Cabo, Mexico.
Bates said the company also is looking to expand into areas including San Francisco, Boston, Texas and other Sun Belt markets.
TMC Hospitality has been eyeing Chicago, and particularly Fulton Market, for several years, Bates said.
“We think Fulton Market stands out from the crowd when it comes to office rents, residential rents, retail rents, food and beverage,” Bates said. “We love it. I think it’s one of the best submarkets in the country. It’s where our guests want to be. You can do anything you want to do in Chicago and then you’re around the best dining experiences you can find in the city.”