Sunstone Hotel Investors to Purchase Hilton Garden Inn Chicago Downtown
- Jun 20, 2012
By Gabriel Circiog, Associate Editor
Sunstone Hotel Investors Inc. has entered into a purchase and sale agreement to acquire the Hilton Garden Inn Chicago Downtown/Magnificent Mile for a gross purchase price of $91.75 million. The 357-room hotel, located at 10 E. Grand Ave. in downtown Chicago, is expected to generate around $4.1 million of EBITDA and $3.7 million of net operating income.
The acquisition will be funded entirely with cash and, upon closing the purchase, Sunstone will own 14 unencumbered hotels.
Situated across the street from another Sunstone hotel—the Embassy Suites Chicago—the company plans to apply a similar management strategy to the Doubletree Guest Suites Times Square and the Hilton Times Square. Sunstone aims to capitalize on market complexing opportunities and significantly improve revenue management.
The 23-story hotel, which features around 5,700 square feet of combined meeting space, is just one block from Chicago’s Magnificent Mile and within walking distance of over 30 million square feet of high-end office space.
According to a market study carried out by PKF Hospitality Research, Chicago is expected to have an above-average performance out of the Top 25 U.S. Lodging Markets in future RevPAR growth.
The increased number of city-wide events already reported by Chicago’s McCormick Place foretells stronger convention years compared to prior peaks and is expected to take RevPAR growth from the forecasted 8.3 percent in 2012 to 10.3 percent in 2014.
With the acquisition of The Hilton Garden Inn Chicago Downtown/Magnificent Mile, the REIT will have interest in 33 hotels—taking the total investment portfolio to 13,698 rooms.
Photo Courtesy of: www.hiltongardeninn3.hilton.com
For more market data on Chicago, please click here.