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DES PLAINES-A 145-room Comfort Inn hotel near O’Hare International Airport was sold at an auction Wednesday night for $7.875 million to an operator of two other hotel properties in south suburban Homewood and Hannibal, MO. Meanwhile, a 59-room Holiday Inn Express in south suburban Markham received a high bid of $1.275 million at a sale held by Sheldon Good & Co. Auctions, LLC, but a 139-room Villager Lodge in Hazelcrest failed to muster a $550,000 opening bid.

Satish Shethi tells GlobeSt.com he plans to invest between $500,000 and $750,000 in his newest property, located at 2175 E. Touhy Ave. The property comes with assumable variable rate industrial revenue bond financing through the city of Des Plaines.

“It’s nice—it’s near the airport,” Shethi says. “Actually, we paid a little more than I planned, but it’s worth it.”

Occupancy at the property fell to 64% last year, down 15 percentage points from two years ago, with net operating income shrinking to $767,311. That would result in a 9.74% overall capitalization rate; however, Shethi believes the occupancy is short-term, related to concerns about airport security.

“(The market) will come back,” Shethi says. “It’s bottomed out.”

Occupancy at the Holiday Inn Express at I-294 and 159th Street was 45% in 2001, when net operating income was $75,329. The purchase price would represent a 5.9% capitalization rate.

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