Billionaire Joe Mansueto has bought the Waldorf Astoria Chicago, scooping up the luxury hotel at a COVID-19 discount price of $54.5 million and adding to his portfolio of high-profile real estate purchases in the city.
His real estate investment firm, Mansueto Office, completed the purchase of the 215-room hotel last week, said Ari Glass, head of real estate. Chicago-based Lodging Capital Partners also is an investor in the deal.
“We are thrilled to add the Waldorf Astoria Chicago to our portfolio of iconic Chicago real estate,” Glass said Tuesday in a statement. “We look forward to working with Hilton and LCP to ensure that the Waldorf Astoria remains preeminent.”
The statement did not include a sale price, which people familiar with the deal said was $54.5 million.
That is a steep discount to previous sale prices for the Gold Coast hotel, which is in a 60-story tower that also includes condominiums. Condo owners are not affected by the hotel sale.
In 2015, the hotel sold for $111.9 million, when the buyers were longtime hotelier Laurence Geller and Wanxiang America Real Estate Group.
The Geller venture defaulted on its loans and last year the property was taken back by lenders Wells Fargo Bank and a debt fund of Chicago developer Walton Street Capital. They were owed more than $90 million when they took the property back.
Since then, hotel values have plunged further as the travel industry has been devastated by the coronavirus pandemic. The owner of the historic Palmer House Hilton, New York-based Thor Equities, in August was hit with a $338 million foreclosure suit.
Crain’s Chicago Business first reported Mansueto’s plans to buy the hotel.
The deal is an example of the type of discounted opportunities family offices and other well-capitalized investors with a long-term view could find amid the economic devastation brought on by the public health crisis.
Lodging Capital Partners declined to elaborate on long-term plans for the hotel at 11 E. Walton St.
The building, designed by architect Lucien Lagrange and developed by David Pisor, was known as the Elysian when it opened in 2009. A venture led by billionaire Sam Zell bought the Elysian hotel for $95 million in 2011 and changed it to the Waldorf Astoria brand, which is part of the Hilton hotel chain.
Mansueto, the Morningstar founder, kept a relatively low profile before buying the historic Wrigley Building on North Michigan Avenue for $255 million in 2018. Also that year, Mansueto paid $106 million for the Belden-Stratford apartment building near the Lincoln Park Zoo.
Last year, Mansueto gained further attention when he took full ownership of Major League Soccer’s Chicago Fire.
Earlier this month, Mansueto disclosed plans to invest in “The Terminal,” a $50 million office campus Chicago-based IBT Group is developing in West Humboldt Park.
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