Two investment firms said Tuesday they have acquired a controlling interest in the St. Regis Chicago hotel, which opened this week and is testing the local market’s demand for ultra high-end lodging.
Gencom and GD Holdings said they acquired the hotel in a joint venture, their first investment in Chicago. The 192-room hotel occupies lower floors within the condo tower also called St. Regis Chicago at 363 E. Wacker Drive.
Terms of the sale were not announced. The seller was Magellan Development Group, which has kept a stake in the hotel. Magellan developed the 28-acre Lakeshore East property that includes the building.
“During the pandemic, Gencom saw a unique opportunity to purchase this asset while it was still under construction and strategically arranged to close on the transaction once the property was delivered,” said Gencom Chief Investment Officer Alessandro Colantonio, speaking for the joint venture.
He praised the “the long-term value of this investment given the strength of the Chicago market.”
Chicago hotels have seen a strong comeback in their performance. Citing data from travel research firm STR, a spokesperson for the partnership said Chicago has posted the best 12-month improvement of the top 25 U.S. hotel markets for occupancy levels and average room rates.
The St. Regis hotel brand is part of Marriott International. The Chicago hotel currently posts room rates of close to $1,000 per night, higher than other five-star properties here.
The building has 393 condos, the first of which were sold in 2020. Architect Jeanne Gang designed the 101-story building, the third-tallest in Chicago and the tallest anywhere designed by a woman.
The property will include five restaurants, two of them managed by Chicago’s Lettuce Entertain You Enterprises — Miru, a Japanese restaurant for all-day dining that just opened, and Tre Dita, a Tuscan steakhouse due to open in the fall.
The last five-star hotel to open locally was the Langham Chicago in 2013.
