Chicago-based Walton Street Capital Partners, Chicago-based Lodging Capital Partners and New York-based Westbrook Partners have acquired The Drake Hotel, a 537-room icon that has hosted Queen Elizabeth, Winston Churchill and Elizabeth Taylor, among others, since it opened its doors in 1920.
The Drake, which stands where Michigan Avenue connects with Lakeshore Drive, had seen its past glory fade in recent years as newer hotels stole the spotlight and much of its business, but the property has rebounded thanks to $60 million (€47 million) in renovations, according to reports.
The Chicago hotel market has strengthened in recent months and both room and occupancy rates are on the upswing, pumping up the price of hotel properties. The same team of investors recently sold the 311-room Conrad Chicago for $117.5 million, $31 million more than they paid for it ten months earlier.
Although the purchase price of The Drake was not disclosed, Crain’s Chicago Business placed the value of the deal at less than $80 million, which was the price sought for the hotel in a scuttled deal with an Arizona investor.
The hotel likely traded lower than a comparable Chicago hotel would because the deal did not include the price of the land, which is reportedly under lease by Hilton Hotels as part of a 30-year agreement.