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Owner poised for big loss on historic Ambassador Chicago hotel

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Sales close to this amount represent only a portion of Gaw Venture’s $61.5 million. paid for the property July 2016, then known as Public Chicago. It’s unclear how much Gaw has since upgraded the hotel and its restaurant, but information in the flyer suggests the company has invested about $11 million in the facility.Gau rebranded hotel As Ambassador Chicago, it’s a nod to its history as the storied former Ambassador East Hotel.

This establishment is a poignant example of the pandemic battery in the hospitality market. While there is demand for leisure travel, back in a significant way This year, sluggish business travel and rising property taxes have caused downtown hotel values ​​to plummet and, in the worst cases, have forced owners to vacate properties to lenders.

Gaw turned to Chicago developer Shapack Partners for help. Soho House Chicago After purchasing the hotel from boutique hotel pioneer Ian Schrager’s venture in 2016, he set out to increase the value of the hotel at Fulton Market. Schrager revamped the property and rebranded it as Public, but the concept never worked and Schrager eventually sold the hotel to Gau.

After reviving the Ambassador name, Gaw hired Lettuce Entertain You Enterprises to run the hotel’s famous Pump Room restaurant, which reopened as Booth 1 in 2017. Restaurants closed in 2019 And the owner and lettuce parted ways. The open restaurant is now called the Ambassador Room. Shapak and his partners are no longer involved with the hotel, and a spokesperson for Shapak did not respond to a request for comment.

In March 2020, days before the pandemic began, Gaw announced plans to further revamp its properties as the brand links with Hyatt Hotels’ Joie de Vivre (JdV) lifestyle hotel collection. The hotel was then closed for almost a year as a result of the public health crisis.

Robert Douglas is now pitching the hotel as potentially continuing to operate as a hotel or turning it into something else, taking advantage of property renovations that have taken place over the past decade. “Given the property’s size and location,[it]may be suitable for a variety of uses,” Fryer said.

A source familiar with the building said Robert Douglas is putting the property on the market for conversion to residential use, including apartments and senior housing.

A spokeswoman for Gaw Capital did not respond to a request for comment, and a spokeswoman for RobertDouglas declined to comment.

Gold Coast hotel owners have found buyers for their properties during the pandemic, but prices are much lower than before 2020.

of Thompson Chicago Hotel and the Talbot Hotel Both neighborhoods sold for nearly $300,000 per room last year. Each transaction generated enough money to pay off the debt the seller owed on the property, but Talbot’s purchase price far exceeded the previous owner’s total investment in the extensively renovated building. fell below

Downtown hotel occupancy averaged 76% in September, up from 56% in September 2021, but still below the September 2019 average of 84%, according to hospitality data and analytics firm STR. Revenue per available room, a key performance indicator that explains both occupancy and room rates, averaged $204 last month, slightly above the September 2019 average of $199.

September was just two months from the start of the pandemic when average RevPAR exceeded 2019 figures.

Ambassador East opened in 1926 and has been a Chicago institution for decades. It is known to have celebrities dining in the Pump Room and having celebrities such as Frank His Sinatra and Marilyn Monroe stay in the suite.

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