Just as one James hotel on the East Coast changes hands at a loss for the seller, another struggling property in the brand is seeking a buyer.
New York-based property owner Denihan Hospitality Group is looking to divest the James Hotel in Chicago's River North neighborhood.
The company has reportedly been shopping the 297-room hotel in recent weeks and is seeking a deal worth more than $80 million, close to 40 percent less than the $136.5 million Denihan paid in 2008, a record high price-per-room for Chicago hotels at the time.
In those pre-recession days, Denihan acquired the hotel from New York's James Hotel Group, which itself bought the property in 2005, when it was the Lenox Suites. James reportedly paid $36 million for the hotel and spent further $60 million on renovations. The hotel reopened in March 2006 as the James, and went to Denihan just under three years later.
But nine years after that headline-making sale, the property is now $82 million in debt, leaving Denihan's ability to turn a profit after all this time in doubt.
New Owner for James New York - SoHo
Another James hotel has succeeded in changing hands: Thor Equities has closed on the acquisition of The James New York – SoHo in downtown Manhattan. Jeffrey Davis of JLL brokered the deal.
Thor reportedly paid $66.3 million for the 18-story, 114-guestroom property, securing a $44 million floating-rate loan from French bank Natixis. PGIM Real Estate bought the hotel for $83.4 million in 2013, meaning that the sale still leaves the seller in the red. PGIM, formerly known as Prudential Real Estate Investors, had acquired the property from Brack Capital Real Estate, which developed the hotel in 2010.
Thor Hospitality Group, a newly formed division of Thor Equities, is reportedly planning substantial renovations and upgrades to the property. The developer has hired fellow hotel investor Highgate as a third-party manager and plans to upgrade the food-and-beverage component and add two new hotel rooms.
The hotel will continue to operate as a James hotel until 2019, when it will be relaunched with a new brand.