Hotel Impresario Ian Schrager Grabs Chicago’s Landmark Ambassador East Hotel, Plans Extensive Renovations for Property
- Apr 12, 2010
April 12, 2010
By Barbra Murray, Contributing Editor
Celebrated boutique hotel inventor Ian Schrager plans to leave his indelible mark on the Chicago hospitality market with his recent acquisition and planned renovation of the historic Ambassador East Hotel. Details of the purchase by New York City-based Ian Schrager Co. (ISC) are being held close to the vest; however, the landmark 285-room hotel, home to the famed Pump Room restaurant, last changed hands in late 2005 when a joint venture involving the Fordham Company, the Harp Group and Mid-America Development Partners purchased the property for $47 million.
Developed in 1926, the Ambassador East is located at 1301 North State Parkway in Chicago’s elite Gold Coast neighborhood, about 13 miles northeast of Midway International Airport and 17 miles southeast of Chicago O’Hare International Airport. Schrager will submit both the hotel, which also features 8,900 square feet of meeting space, and the restaurant to sweeping upgrades. The new owner politely, but firmly, declined to discuss financial specifics of the renovation and the acquisition, but he conceded that New York City-based finance company iStar Financial Inc. played a role in the transaction.
Chicago’s hotel market has taken its hits from the recession and the global financial crisis, but Schrager believes the timing is precisely right for his entrée into the Windy City. “We’re bullish on the future of the hotel business here even though it’s a down market, and the Ambassador East is a once in a lifetime opportunity,” Schrager told CPE. “It is the right time of the cycle to buy because we’re in the acquisition and development business. By the time we’re done with the renovations, we’ll be hitting the market just right.”
And when demand picks up, he believes that the new hotel that will ultimately emerge from the famous Schrager makeover will attract clientele despite the competitive environment. “There is always demand for something that’s distinct,” he said. “There is always an opportunity to come in with a unique distinctive product.”
Schrager is just getting started in Chicago; he hopes to rely on the new Ambassador East to leverage ISC’s presence into at least two more hotels. He’s already scouring the city for his next purchase. But he also has his sights set on other locations for the expansion of ISC’s portfolio. “Even though the hotel market is not doing well, we’re contrarians,” Schrager noted. “We think its time to get into the market because it is so down, and that presents opportunities for acquisitions for people like myself. We will be very aggressive about making acquisitions. We’re focusing on 24-hour gateway cities, but we’re looking at other locations as well.”