Chicago Hotel Investments

Chicago Hotel Investments

Chicago Hotel Investments

Chicago IL  – Hotel Investments & Developments – Hotel Equity Fund

Chicago IL – Hotel Market Report 2020

According to STR, during the week of December 1-7, 2019, the Chicago hotel market saw the greatest rise in all three key performance metrics. Occupancy increased 15.8% to 72.2%, ADR rose 29.5% to US$154.74, and RevPAR saw a gain of 49.9% as it spiked to US$111.75. The greater Chicago lodging market has experienced years of consistent economic strength.

The city’s lodging sector has seen continuing growth in hotel demand. This prosperous area captures the attention of private and public investors. Since 2009, the Chicago hotel market had positive year-over-year RevPAR growth.

Almost 12,000 rooms have opened in Downtown Chicago between 2015 and the beginning of 2019. Strong demand will continue to fuel the hospitality market in this area during the coming year and beyond.

The number of hotel sales rose in 2018 compared to the previous year. Seven lodging property sales happened between January 2018 and January 2019. These hotels sold at about $400,000 per key.

During March 2018, however, a 40-room hotel sold for a record $2,375,000 per key; this sale also included a private club. Several of that year’s hotel transactions involved significant renovations and brand conversions.

2018 was a record year for the Chicago hotel market. As well, summer 2019 was particularly strong with high average rates and a rising occupancy despite an increase in supply.

More than 24 Fortune 500 companies from several categories (everything from finance to food) make their home in the Chicago area. Indeed, during the past decade, 30 plus headquarter offices have set up in Downtown Chicago.

New companies choose this dynamic region for its progressive transportation infrastructure, central location, and reasonable cost of living, as well as the city’s world-class culture, entertainment, and sports.

Chicago hotel owners will be pleased to welcome a multitude of visitors for the NBA All-Star game in February 2020. This phenomenal sports event will be making a return to the city for the first time in 30 years.

As well, Chicago is a convention destination. Of course, this activity can vary from year to year. Indeed, many major conventions have been using a biennial cycle – which means that “even” years are more active than “odd” years.”

Yet with Chicago’s massive commercial base and its popularity as a convention spot, there are always groups looking for rooms.

When it comes full cycle for huge corporations to have conventions, they get massive attendance. For example, the 2018 International Manufacturing Technology Show, Chicago’s largest trade show, had 129,000 attendees.

During 2019, convention and group business accounted for one-third of the hotel stays in Chicago. The business of conventions has a definite impact on the hotel market.

Major events (sports, music, etc.) and conventions of every type have a significant effect on hotel occupancy and rates. Of course, Chicago’s tourism also targets leisure and regular business travelers because these visitors account for 67% of hotel stays.

The Chicago market will have several hotel openings between 2020-2021 including a 115-room brand hotel in early 2020 and an exclusive 222-room property (next to Navy Pier’s Festival Hall) scheduled for the spring.

The new fall supply will see the Vista Tower come to life; it will be Chicago’s third tallest skyscraper. Designed by Jeanne Gang, it is the tallest structure in the world to be designed by a female architect. The luxurious 210-room Wanda Vista Hotel (with a Shui day spa, gymnasium, pool with garden terrace, …) will be part of this skyscraper project.

The 165-room Equinox Hotel (featuring a health club and apartment tower) will open during 2021 at the corner of the Kennedy Expressway.

Chicago has a diverse mix of hotel rooms (everything from small boutique hotels to spectacular modern towers to big-box hotels) ready to greet the city’s millions of visitors per year.

Based on “Choose Chicago” data (the city’s tourism resource), its central business district has over 140 hotels and 45,000 rooms. During the past five years, this dynamic metropolis added 37 new hotels (8,100 plus rooms).

The properties include a group of boutique hotels between Fulton Market and Hyde Park. These neighborhoods were not a traditional hotel district.

Originally, hotels set up in the North Michigan Avenue area. Yet with a growing demand for hotels (as well as diverse properties), the hospitality sector is expanding throughout Chicago.

Due to its thriving economic scene and growing interest from foreign investors, the future outlook is extremely promising for the Chicago hospitality sector. Chicago’s hotel rates are expected to rise by 1.9% in 2020.

 

HOTEL EQUITY FUND INVESTMENT PARTNERS

 

Acquisitions and Investments

Hotel Equity Fund is one of the top hotel investment in Europe, and now expanding to New York City, West Hollywood CA, South Beach Miami Florida, Chicago, San Francisco, Washington DC, London, Paris, Berlin, Toronto, Jerusalem and Tel Aviv Israel, with results that have consistently bested industry averages. Much of this success is a direct result of our focus on investor returns, individual assets, and aligning management with the individual needs of owners. Our combination of strong capitalization through Hotel Equity Fund, and a strong track record of experience offer a level of credibility that is nearly unmatched in the industry.

 

 

Investment Criteria

We are aggressively seeking new properties in New York CityWest Hollywood CASouth Beach Miami Florida, ChicagoLos Angeles, San FranciscoWashington DCLondon UKParis,  BerlinToronto ONMontréal Québec, Israel including Tel Aviv and Jerusalem, and feel that our centralized operation of business in New York offers the very type of responsiveness, professionalism and capital resources the industry has been seeking. Please click here to review the investment criteria.

 

Development Opportunities

Our Hotel Equity Fund owned hotel and resort development subsidiary, Hotel Equity Fund Development, has extensive experience in resort, hotel, and golf course development, with recent hotel development and hotel redevelopment projects totaling over $2 billion. Our projects are well known for meeting market demand and for attention to both design and operating detail. Our culture of “listening to the customer” is at the heart of our development process and has allowed properties to excel in both operating performance and value retention.

 

Boutique Hotel Investments

Boutique hotels, also known as lifestyle hotels, vary in shape and size; however, all boutique hotels rely heavily on creative energy and highly personalized service to compete in the overall hotel industry.

Hotel Equity Fund is a respected financial hotel investment firm, utilizing hotel equity funds to assist its hotel real estate developers and partners in gaining favorable returns on their investments. Hotel Equity Fund works with a range of hospitality firms to increase the efficiency and effectiveness of individual hotel properties, ranging from boutique hotels with excellent F&B, premium brands to mid to up-scale well-located properties.

Since 1980, the Hotel Equity Fund and Hotel Equity Fund Partners Investment Program have invested over $2 billion into quality hotel real estate properties with aggregate transaction capitalization of nearly $3 billion. By partnering experienced advisors with each investment partner, Hotel Equity Fund ensures that each property is equipped with a creative vision and practical management plan to achieve long-term financial sustainability and success.

 

Hotel Developments & Acquisitions

Hotel Equity Fund routinely assesses joint venture development opportunities which provide long-term alignment of interests for both Hotel Equity Fund and prospective partners in New York CityWest Hollywood CASouth Beach Miami Florida, Chicago, Los AngelesSan FranciscoWashington DC, Toronto Canada, LondonParis, Jerusalem and Tel Aviv Israel.

Experienced, multi-brand, investment-grade hotel developers, Hotel Equity Fund will take a project from dirt or acquiring an Landmark Building for hotel conversion to a stabilized hotel through hotel disposition. Offering a variety of hotel investment services, our specialized team can meet your unique hotel project requirements including, but not limited to, the following:

 

  • Assist in hotel site selection and property evaluation.

 

  • Evaluate benefits of and selection from available boutique brand or a national brands.

 

 

 

  • Make recommendations regarding legal entity and JV agreement options.Prepare preliminary hotel construction cost estimates.

 

  • Offer professional market study or appraisal recommendations.

 

  • Assist in selection and coordination of attorney, architect, civil engineer, project manager, general contractor,

 

  • FF&E procurement and interior design.

 

  • Provide construction, financing, permanent debt, refinancing and disposition roles.

 

  • Execute long-term management contract services.

Hotel Equity Fund’s proven investment methods mitigate risk and encourage success, combining our investment and management fluency with the strength and potential of partner assets. If you would like to read more about the positive impact we have made with our hotel equity fund, please explore the entirety of this website.