Legendary Capital has sponsored the 160-room Sheraton Hotel Chicago Northbrook acquisition in a $11.3 million transaction. The deal used Legendary Capital’s proprietary Equity Preservation UPREIT mechanism, where Sheraton ownership contributed the property in exchange for a special class of Transition Partnership Units. This allows for the potential preservation of the contributor’s equity as the property restabilizes. This is the fourth transaction Legendary Capital has sponsored in the past nine months using its EPU contribution mechanism.
“The Legendary Capital Equity Preservation UPREIT program is a unique and mutually beneficial transaction mechanism,” CEO Corey Maple said. “Instead of acquiring debt and squeezing out an owner’s equity, our EPU platform creates a win-win-win proposition between the acquiring entity, the lender and the contributing hotel owner. The Sheraton Hotel in Northbrook is the latest in a series of successful EPU transactions.”
Located in the third largest metropolitan statistical area of the United States, behind New York and Los Angeles, this submarket has a diverse base of demand drivers. The Sheraton is located across the street from the headquarters of Medline Industries, a large privately held manufacturer and distributor of medical supplies. Crate & Barrel headquarters is located less than a mile from the hotel. Several other corporate headquarters in this submarket are Allstate, Astellas, Bell Flavors & Fragrances and Walgreens.
“The corporate presence in Northbrook can’t be overlooked,” said Chief Investment Officer Dave Durell. “This is a sector that continues to grow, and the Sheraton is perfectly positioned among a number of big corporate names.”