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EVANSTON, IL — The Hilton Orrington Hotel in downtown Evanston has been listed for sale in an effort to resolve a pending foreclosure lawsuit against its owner.
Citing commercial real estate marketing materials and Bloomberg loan data, Crain's Chicago Business reported the listing is a consensual short sale by owner Olshan Properties.
Named after Northwestern University co-founder Orrington Lunt, the Hotel Orrington first opened in 1923, fell into disrepair in the 1960s and 70s, and was renovated in the 1980s and again in 2003.
Olshan spent $60 million in 2015 to buy it from a joint venture of the Carlyle Group and Dow Hotel Company, which had also refurbished it.
Like other hotels, the Orrington saw its business decimated by the COVID-19 pandemic.
During the statewide stay-at-home order in the spring of 2020, the hotel provided housing for homeless people through an arrangement with the city and a local nonprofit.
When Northwestern forbid freshmen and sophomores from living on campus during the fall of 2020, the hotel began renting to students.
In late 2020, the hotel closed again, this time indefinitely, posting a sign on the door saying that operations were "temporarily suspended." It eventually reopened in the summer of 2021.
According to a listing brochure, a roof leak left the hotel's Grand Orrington Ballroom heavily damaged during the pandemic, and the 5,858-square-foot event space is now in "shell condition," Crain's reported.
In February 2021, Deutsche Bank filed a foreclosure lawsuit in Cook County court alleging that Olshan stopped making payments on the property in August 2020 and owed approximately $50 million.
Loan data cited by Crain's indicates hotel ownership halted payments upon the expiration of three-month compromise deal that allowed it to make reduced payments amid the first wave of COVID-19 in Illinois.
Prior to the pandemic, the hotel's owners were making about $400,000 in profit after making loan payments. But by the middle of 2020, they were generating less than half of the cash flow needed for its $2.6 million-a-year debt service.
The hotel's listing does not include an asking price, but Crain's reported it is likely to be significantly less than the money Olshan still owes on the loan.