A California hotel investor has acquired the Westin O'Hare in Rosemont, offering a fresh start to a property seized by its lender nearly two years ago after its owner defaulted on a $101 million loan.
A venture led by Clearview Hotel Capital LLC paid $37 million, or about $70,500 a room, for the 525-room hotel at 6100 N. River Road, county records show, taking over the property after deals fizzled with at least two other buyers. The sale offers a sobering reminder of how much some hotels have lost in value since the market peaked: The Westin last sold in November 2006 for $125 million, more than three times Clearview's price.
Clearview made “a pretty good buy,” said Robert Habeeb, president and chief operating officer of First Hospitality Group Inc., a Rosemont-based hotel operator that owns several hotels nearby and bid on the Westin.
He estimated that the Newport Beach, Calif.-based investment firm probably needs to spend about $20 million renovating the hotel, but even then, the investment still amounts to an attractive $109,000 a room.
“It's a good location, good real estate, a very good box,” he said. “The hotel's just very tired, in need of a facelift.”
An executive at Clearview did not return calls. Founded in 2007 by Jon Kline, the former president and chief financial officer of Sunstone Hotel Investors, a California-based real estate investment trust, Clearview owns seven other hotels with more than 2,500 rooms, mainly on the West Coast and none in Illinois, according to its website.
Clearview financed its acquisition of the Westin with a $30 million loan from Wells Fargo Bank, county property records show.
The hotel's previous owner, Dallas-based Ashford Hospitality Trust Inc. funded its $125-million acquisition in 2006 with a $101 million loan that was sold in a commercial mortgage-backed securities offering. Yet it turned out to be a disastrous acquisition, as the recession dragged down occupancies and room rates and the real estate bubble burst.
Ashford handed the hotel over to a loan servicer in September 2010 after defaulting on the loan, and the Texas-based servicer, C-III Asset Management LLC, put the property up for sale in early 2011. A joint venture led by San Francisco-based Chartres Lodging Group LLC agreed to buy the Westin for about $53 million last summer.
After that deal fell apart, Thayer Lodging Group, an Annapolis, Md.-based investor, agreed to buy the hotel earlier this year. C-III put the Westin back on the market after Thayer backed out.
Representatives of C-III and Hotel Asset Value Enhancement Inc., a Providence, R.I.-based firm overseeing the Westin for the loan servicer, declined to comment.
The Westin is not the only local hotel to struggle with loan problems since the crash. Others include the InterContinental Chicago O'Hare, the Westin Chicago North Shore in Wheeling, the Allerton Hotelon Michigan Avenue and the Sofitel Chicago Water Tower in the Gold Coast.
No Comments Posted yet
Do you have comments on this?