Marriott acquires Sheraton Grand Chicago for $500M

Tishman Realty has exercised its option to sell the Sheraton Grand Chicago to Marriott International for $500 million. The deal, expected to close in the fourth quarter of 2024, will see Marriott part with $300 million for the hotel and an additional $200 million for the land beneath it. Marriott already operates the hotel.

The hotel chain's purchase of the 1,218-room hotel is part of an unusual agreement struck in 2017 with the property owner Tishman Realty. New York-based Tishman Realty was part of the development team that completed the hotel in 1992.

The settlement brings an end to a protracted legal battle between Tishman Realty and Marriott that began in 2016. The dispute arose following Marriott's merger with Starwood Hotels, which Tishman claimed violated a non-compete clause in the hotel's management contract. The resulting lawsuit led to a settlement agreement in 2017, which included an option for Marriott to purchase the hotel at a later date.

By purchasing the hotel, Marriott will eliminate recurring ground-lease payments and become the owner of Chicago's fifth-largest hotel.