World’s First Triple-Flagged Hilton Lands Financing
- Feb 13, 2017
Chicago—HFF has arranged $78 million in construction financing for a 466-key triple-flagged Hilton hotel now beginning development across the street from Chicago’s McCormick Place convention center.
HFF worked on behalf of the developer, Michigan Cermak Indiana LLC and First Hospitality Group, to place the construction loan with The PrivateBank.
The hotel, reportedly the world’s first to feature three Hilton brands, is being built on a 0.87-acre site at 123 E. Cermak Road, at the southwest corner of Cermak Road and Indiana Avenue in Chicago’s South Loop. The site is within walking distance to two stations on the Chicago Transit Authority’s Green and Red elevated lines and near offices, hospitals, retail, restaurants and entertainment venues.
The hotel will consist of a 184-key Hilton Garden Inn, a 187-key Hampton Inn and a 95-key Home2 Suites with a shared entrance, front desk and amenities, including an indoor pool, fitness room and business center.
In addition, the 21-story building will feature two Chicago-based restaurants and a Starbucks on the ground level, 7,000 square feet of flexible meeting space, and a rooftop bar and lounge. Usefully, given Chicago’s often-problematic weather, the hotel will have direct skybridge access into McCormick Place, which at 2.6 million square feet is the nation’s largest convention center.
The HFF debt placement team representing the borrower was led by Michael Kavanau, senior managing director, and Danny Kaufman, managing director. “The new hotel’s connectivity to the convention center and best-in-class Hilton franchises will significantly improve the lodging offerings available to McCormick Place,” Kaufman said in a prepared statement.
The hotel is being built by McHugh Ujamaa LLC, an affiliate of James McHugh Construction Co. and Ujamaa Construction Co.
This property will be the only Hilton Honors option south of the Hilton Chicago (about a mile and a half to the north), Hans Detlefsen, president of Hotel Appraisers & Advisors, in Chicago, told Commercial Property Executive, adding, “Its location directly across the street from the nation’s largest convention center, and near other South Loop development initiatives, should represent additional competitive advantages for this development.”
“There is a national trend to develop multi-branded hotel properties,” Detlefsen continued. “Some advocates say the justification is to reduce costs, but the smartest developers use this strategy to control supply and franchise rights.”