Residence Inn by Marriott marked two significant milestones Tuesday with the grand opening of the Residence Inn Chicago Downtown/Loop. Not only is it the 700th hotel in the upscale extended-stay chain, but with 381 suites, it is the largest Residence Inn in the system.
The adaptive reuse of a historic office building was developed—and is owned—by the Prime Group, at a cost of roughly $136 million. A Chicago-based real estate developer mostly active in commercial and residential projects, the Prime Group also developed and owns the JW Marriott hotel located in another office-to-hotel historic conversion a few blocks away that opened in 2010.
Marriott International has two other Residence Inn properties in downtown Chicago, one on the Magnificent Mile, the other in the River North neighborhood. But given their specific locations, each of the three has its own profile.
“In the case of this newest property, it’s in the city’s financial district, so it features a large amount of meeting space, which is unusual for a Residence Inn,” said Marriott president & CEO Arne Sorenson at a media briefing before the official ribbon-cutting ceremony.
The meeting facilities include two executive boardrooms and nine other meeting rooms for a total of 6,700 square feet of space. Sorenson said he expected the space to be used for small executive-level strategic planning sessions as well as more traditional corporate training programs. Extended-stay hotels have long been used to house managers attending training programs held off site. Now the programs themselves can be held in the hotel.
The hotel expects to open a full-service restaurant on the building’s ground floor in the first quarter of 2016. A full-service bar is already open on the second-floor lobby level, where the front desk is located. “Neither are typical amenities for the Residence Inn brand,” Sorenson said.
Other brand standards, however, are all present and accounted for – complimentary breakfast and complimentary Wi-Fi, 24-hour fitness center, tiered extended-stay pricing and guest laundry among them. Celebrating its 40th anniversary this year, the Residence Inn brand was acquired by Marriott in 1987.
Long known for its highway/suburban/office park locations, the brand in recent years has increasingly sought out high-profile urban locations. Examples can be found in downtown and on Broadway in midtown Manhattan, downtown Los Angeles and downtown Philadelphia as well as the two other Chicago properties, among other major cities.
More urban locations are on the drawing board. Brand VP Diane Mayer noted that approximately 20 percent of the Residence Inns presently open are in city centers. Meanwhile, roughly 40 percent of the properties in the pipeline are in such locations.
Residence Inn has also proven to be a popular choice by developers to be one of the two components in their dual-brand projects, most of which are found in urban locations. Scarcity of suitable building sites and high barriers to entry—along with the ability to target guests on two different types of trips–have made dual-brand projects a favorite development model. The Residence Inns in both midtown Manhattan and downtown Los Angeles are dual-brand with the companion brand in both cases being Courtyard.
Development teams at the Prime Group and Marriott considered the dual-brand approach for the new Chicago Residence Inn, but decided there were sufficient demand generators for the project to go forward as a single brand.
In its first month of operation following the hotel’s soft opening, most of the bookings were transient, Mayer reported. But that’s not unusual. “It can take as long as six months to a year for true extended-stay bookings to grow and become a majority of the business in a new property,” she said.
The building housing the new property is 100 years old this year. Built by the prolific McCormick family, for whom Chicago’s McCormick Place convention center is named, the building was originally 16 stories, but grew in stages to its present 34 stories as the city grew. By the time the Prime Group acquired it in 2006, it had fallen on hard times. It was still deemed worthy of landmark designation, however. And once the economy recovered post the 2008-2009 recession, work actively began on plans to convert it to a hotel.