As the frenzy for Chicago hotel construction continues to brings hundreds of new rooms to town, the poster boy for boutique hotels may part with a prized property. Ian Schrager and partner Morgan Stanley Real Estate Funds have placed PUBLIC Chicago, the much-lauded renovation of the stately Ambassador East, on sale, with Crain's reporting an asking price of $86 million. Schrager stands to make a handsome profit based on the roughly $60 million spent on acquiring and rehabbing the 16-story Gold Coast hotel.
While the hotel, bar and Pump Room restaurant have generated lots of buzz since re-opening in 2011, experts quoted in the Crain's piece say that rooms "were not its strong suit." They weren't extensively renovated, and the north side location put the property off the radar of many business travelers and visitors seeking a more central location. Since it's currently one-a-kind -- Schrager is already working on rolling out the new Edition hotel chain -- a post-sale name change is likely.
Those slight weaknesses won't hurt its value on the market, however. Chicago can offer a higher rate of return for potential hoteliers than similar spots in high-priced coastal markets. It remains to be seen if the elegant hotel's name-recognition can convince someone to meet Schrager's "real" ask, "the highest price known to mankind."
·With hotel prices soaring, Schrager ready to sell out of Public [Crain's]
·Previous Hotel Boom Town coverage [Curbed Chicago]
·Previous PUBLIC Chicago coverage [Curbed Chicago]
·Previous Ian Schrager coverage [Curbed]