CHICAGO-Almost double-digit RevPar in downtown Chicago, as well as well-respected borrowers, is what encouraged MassMutual to provide $66 million in financing for the planned 334-room hotel within Aqua Tower. The construction loan for Magellan Development and Carlson Hotels, to build the first US-located Radisson Blu, is for seven years.
The hotel is expected to cost about $125 million, with the project being within the multifamily tower. With 262 condos and 474 apartment units, the entire project is expected to cost about $475 million. Construction recently began on the project.
Not many developers are working on financing deals for new projects, and even fewer are actually putting shovels in the ground in the downtown. However, Magellan has had tremendous success with its 28-acre, $4 billion Lakeshore East project, which also includes the two apartment towers Shoreham and the Tides. Daniel Kaufman, a director with Holliday Fenoglio Fowler LP, tells GlobeSt.com that MassMutual and its advisor Cornerstone were happy with the deal. “The borrowers are two very high-quality companies,” says Kaufman, who represented Magellan and Carlson along with Michael Kavanau.
Kaufman says the lenders also respect the current Chicago hotel market, which has flirted with double-digit RevPar in the late third quarter and early fourth quarter. “From a hotel standpoint, Chicago has had a strong recovery. We’re hoping this trend continues, or even gets better, into late 2011 to early 2012, when this project should open,” Kaufman says.
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