The boutique hotel LondonHouse on Michigan Avenue, which is set to open sometime in May, has been sold to German investors for $315 million. It’s a new record for a Chicago hotel, according to Crain’s Business Journal.
The 452-room hotel was purchased by Hamburg-based Union Investment Real Estate from Oxford Capital Group and Angelo Gordon, which had paid $53 million for the landmark building in 2014. The sales price of $679,000 a room just bests the previous Chicago record of $592,000 per room when the Waldorf Astoria was so,d last summer.
Crain’s Business Journal reports Oxford will retain ownership of the 28,000 square-feet of retail space on the first and second floors of the landmark 22-story building.
Londonhouse was constructed in 1923 and was formerly known as the London Accident and Guarantee Building. Under the stewardship of the Oxford group, it underwent a major renovation that was funded by an $84 million reconstruction loan. Add that to the price the Oxford group paid for the building in 2014 and the math says this was a very lucrative deal for the former owners.
Among the additions to the new-look LondonHouse is a glass extension on an adjacent parcel on Wacker Drive, Crain’s reports.
This is the second transaction between Oxford and Union, which is looking to grow its collection of “lifestyle” hotels. Previously, Union paid $180 million to Oxford for Godfrey Hotel Boston.
“This investment underscore our reputation as a reliable and attractive partner to the hotel industry at international level,” said Union hotel division head Andreas Locher. “It also open up the prospect of further off-market transactions in the US.”
Oxford founder and CEO John Rutledge indicated the offer from Union was too good to pass up, noting in an understatement the sellers “are able to receive an attractive return on their original investment.”