Sterling Bay Seals $48M Bridge Loan for Talbott Hotel in Chicago
Mesa West Capital has finalized a $48 million bridge loan to refinance debt on the Talbott Hotel in Chicago, according to an announcement from the lender.
Sterling Bay, one of the Second City’s biggest developers and the organization behind office space in Chicago for Google, McDonald’s and Starbucks, bought the late-1920s structure in 2015 for $50 million and wrapped up an extensive remodeling of the property in the first half of last year. The five-year mortgage, which includes $7 million in mezzanine debt that Mesa West placed with another organization it declined to identify, will help fund the hotel while it gets re-established following the reconfiguration.
The four-star boutique hotel, at 20 East Delaware Place, houses 178 rooms and a 2,200-square-foot retail space on its ground floor that currently hosts a branch of the Danish food chain Joe and the Juice. On the southern edge of the Gold Coast neighborhood, the hotel is just blocks from the Michigan Avenue retail drag—as well as rivals like a Westin, a Park Hyatt and a Drake.
“At this part of the cycle, there is a little bit of oversupply,” admitted Matthew Snyder, who led Mesa West’s financing team for the deal. “That’s why some of the hotels are going the short-term bridge route as some of these markets continue to work through the supply. But you are seeing favorable traction, in terms of tourism year over year continually growing.”
The recent $20 million renovation emphasized a refreshed in-room design palette, with the installation of more modern light fixtures, marble window sills and new furniture. Joie de Vivre, the hospitality group that manages the Talbott, also rearranged the lobby, shifting the location of the check-in desk and adding cozier seating.
Representatives for Sterling Bay and Joie de Vivre didn’t respond to requests for comment.