The 424-room, 20-story upmarket hotel began its life as theNikko Hotel in 1987, but became a Westin in the 1990s. For the timebeing, the property will probably remain a Westin, managed by thenational hotel REIT Starwood Hotels & Resorts Worldwide. LendLease was able to make a killing in part because investor interestin Chicago hospitality properties is very strong, with a currentshortage of rooms plaguing visitors.

"The international competition for this asset was intense, whichresulted in one of the highest price-per-key transactions of anexisting hotel in the Chicago marketplace," says Thomas Fisher, SVPof Jones Lang LaSalle Hotels, who negotiated on behalf of LendLease.Lately, occupancy at the hotel has averaged about 80%, a factthat didn't discourage potential investors either.

Lend Lease's Value Enhancement Fund III is the third in a seriesof closed-end real estate investment funds. Since the inception ofVEF I in 1993, the series of funds invested in almost $2 billion incommercial real estate.