Loews Hotels & Resorts is on a hot streak of sorts. In particular, it likes the Chicago area a whole lot.
Already in the throes of a 400-room Chicago property, being developed by Chicago-based DRW Trading Group as part of a 52-story tower with a 2015 opening date, Loews now is keeping in the area with the announced acquisition of the 556-room InterContinental Chicago O'Hare, which opened in 2008 during the economic downturn and susbsequently wound up in Bankruptcy Court.
The deal was reported by Crain's Chicago Business, who says Loews paid $120 million for the hotel. After the deal close
The InterContinental, like other hotels that either opened or were being developed around the fall of Lehman and the ensuing financial morass, was a victim of bad timing, as Crain's writes.
The history: "A week before Lehman Bros. filed for bankruptcy and world financial markets went into a freefall, dragging the hotel sector down also. Less than a year later, the hotel's developer, a venture led by Harp Group Inc., also filed for Chapter 11 protection, unable to pay off about $140 million it borrowed to finance construction of the $180 million building.
"Harp agreed to sell the InterContinental for just $42 million in 2010, as the market was starting to pull out of its slump. But the hotel's lenders, including New York-based Amalgamated Bank, persuaded a bankruptcy judge to reject that sale, and they repossessed the property in late 2011. Since then, Chicago-area hotel occupancies and room rates have rebounded almost to pre-recession levels, which, along with the strong financial markets, has boosted hotel values"
Jones Lang LaSalle brokered the deal.
ON A ROLL
Loews has been steadily building up its portfolio of hotels—particularly ever sicne Paul Whetsell, its CEO, joined the Jonathan Tisch-owned company. Most recently, it acquired the Graves 601 Hotel in Minneapolis, in a surprise deal. (Its owner was not looking to sell but, apparently, Loews made an offer it couldn't refuse.)
Another big Loews purchase was in 2012, when it acquired the 632-room Renaissance Hollywood Hotel.
It also emerged from a recent $100-million renovation of its flagship Regency in New York. Loews also recently wrapped two $10-million renovations of its Boston and Montreal properties. And another $14-million renovation of its Philadelphia hotel.
For more on Loews, check our one-on-ones with Jonathan Tisch and Paul Whetsell.