A Dallas-based real estate investment trust is buying the Sofitel Chicago Water Tower in the Gold Coast, ending a period of uncertainty including a loan default and takeover by Blackstone Group, the giant private-equity firm.
Ashford Hospitality Prime Inc. has entered into an agreement to pay $153 million, or about $369,000 a room, for the 415-room hotel at 20 E. Chestnut St., according to a filing yesterday with the Securities and Exchange Commission. The sale is expected to close in the first quarter, the filing said.
The transaction brings the Sofitel full circle from 2006, when a joint venture between Chicago-based Gem Realty Capital and a Goldman Sachs fund?bought the hotel?as part of a $370 million acquisition of six Sofitels. But the venture gave up the property through a?deed-in-lieu of foreclosure?in 2012 after Blackstone bought $85 million in defaulted debt on the hotel. Blackstone?hired Jones Lang LaSalle Inc.?to sell the hotel last year.
The Sofitel is one of several downtown hotels that ran into loan trouble after the crash, a group that includes the?Hotel Burnham?in the Loop, the?Renaissance?on Wacker Drive and the?Allerton?on Michigan Avenue. But hotel values have risen with occupancies and room rates over the past few years, allowing investors that bought at the bottom to cash out for a big profit.
Calculating Blackstone’s take in the Sofitel sale is difficult because it’s unclear how much the New York-based firm paid for its debt. Blackstone must also pay off a $75 million senior loan on the hotel.
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