Dive Brief:

• Miami-based Gencom, in a joint venture with Denver-based GD Holdings, acquired the newly built 192-room St. Regis Chicago hotel, located in the city’s Lakeshore East neighborhood near Lake Michigan, the company announced Tuesday. 
• The 11-story hotel is part of a larger three-tower, mixed-use development by Chicago-based Magellan Development Group, which also includes a 393-unit St. Regis-branded condominium component. The hotel and residences share amenities, including a spa, fitness center and rooftop terrace. 
• With the hotel acquisition, the joint-venture partners added the first St. Regis-branded hotel to their respective portfolios and entered the Chicago market, which Gencom Chief Investment Officer Alessandro Colantonio calls “one of the nation’s top luxury hospitality markets.”

Dive Insight: 

According to Colantonio, the pandemic presented an opportunity for the joint venture to purchase the St. Regis while it was still under construction, and it arranged to close the transaction once the property was delivered. “From the onset, we recognized the long-term value of this investment given the strength of the Chicago market,” he said in the release. 

The acquisition allowed the joint venture to hold a stake in Magellan Development Group’s 28-acre Lakeshore East master development, “one of Chicago’s most successful large-scale, mixed-use residential developments in the city’s history,” according to the release. 

Upon completion, the $4 billion master development will feature 1,500 hotel rooms — including the five-star St. Regis Chicago — as well as 4,950 residences, 2.2 million square feet of commercial space and up to 770,000 square feet of retail. 

In addition to 159 guest rooms and 33 suites, the hotel features nearly 12,000 square feet of meeting space, including the 5,000-square-foot Astor ballroom, with views of city landmarks Magnificent Mile, Navy Pier and Grant and Millennium Parks. It will also offer two dining options: Japanese restaurant Miru and Tre Dita, a Tuscan steakhouse in collaboration with Los Angeles-based chef Evan Funke. Chicago’s Lettuce Entertain You Enterprises will manage the restaurants, to open in the fall. 

According to Colantonio, Gencom will “certainly consider” other potential investments in the Chicago market if they align with the company’s “general opportunistic approach.” The city, he added, is expected to draw significant international tourism and business over the next decade-plus. 

In January, the Chicago Tribune pointed to an uptick in business travel with more than 2.5 million people expected to attend 2023 events at the city’s McCormick Place convention center, up 1 million visitors from last year. 

Recent STR data revealed that the Chicago market saw the highest year-over-year increase in occupancy for the period of April 30 to May 6, 2023, up 14.7% from the same week in 2022. 

The city also recently approved Bally's $1.7 billion casino resort project, which will break ground in 2024. The waterfront development is billed as the first ground-up gaming complex and resort in the center of a major metropolitan city.