Monday December 23rd, 2013 - 9:58AM
NEW YORK—Carey Watermark Investors Incorporated (CWI), a non-traded real estate investment trust, has acquired the Renaissance Chicago Downtown hotel for $139 million.
The 553-room hotel has 35,000 sq. ft. of meeting space, 7,800 sq. ft. of retail space, an indoor pool and whirlpool, a full-service spa, a fitness center, a business center and three F&B outlets: Great Street Restaurant, Bar Novo and Aroma Café.
“We view the acquisition of the Renaissance Chicago Downtown as a rare opportunity to invest in a premium-branded, institutional quality hotel, with an A+ location in one of the largest and strongest markets in the United States,” said Michael Medzigian, CEO of CWI. “Given an attractive purchase price, the growing Chicago market and what we anticipate will be the positive impact of our planned capital improvements over the next two years, we believe that the investment will generate solid risk-adjusted returns for our investors.”
The company attributed the acquisition to a number of factors, notably that the hotel is an institutional quality asset located in Chicago, the third largest metropolitan area and lodging market in the United States, as well as the financial, industrial, agricultural, transportation and tourism center of the Midwest. In addition, the property’s location in Chicago’s Central Business District, proximate to 129 million sq. ft. of office space and leisure destinations such as Millennium Park, Navy Pier, the Magnificent Mile and River North entertainment district, was a factor.
In addition to the $139 million acquisition price, the company will spend $27 million in renovations and other acquisition-related costs. The acquisition was financed with $90 million of debt.
The property will continue to be managed by Marriott International under a long-term management agreement.