HYATT STEPS ASIDE FOR NEW HOTEL TREND
69 Units Booked in Printers Row Condo Hotel

Reprinted from Columbia Chronicle, November 2004
By Sarah M. Hetland, Staff Writer

The recently purchased Hyatt Regency on Printers Row will house the city's latest trend in real estate as of Jan. 1, 2005: condominium hotels.

The historic three-building hotel was bought in July by a Chicago-based hotel developer, The Falor Cos., and will be officially changing its name to The Blake Condominium hotel. Sudler Real Estate is marketing the hotel at 500 S. Dearborn St., and a complete renovation into condo hotel units is currently underway.

People interested in making a possible investment out of temporary residences have contributed to the recent trend of condo hotels, according to Bill Fields, president of Sudler's Residential Sales. The target market is returning visitors or business travelers who are concerned about the time an apartment will sit empty. These provide the solution.

According to the online Condo Hotel Center, the idea behind this concept is that each condo unit will be sold to individual investors who may use the unit for any specified time. The buyers then have the option to place the unit into an organized rental program; the hotel management or operator of the building will then rent out the rooms. Owners share expenses with the hotel operator. The owner and operator will also share a portion of the revenue generated by the unit.

The Condo Hotel Center was created by Joel and Sheldon Greene and is a division of Sheldon Greene & Associates Inc. The Center, based out of Florida, is one of the leaders in the condo hotel market.

"The concept of condo hotels has been around for some time," Fields said. "[They are] usually popular in resort and final destination areas … until recently."

Because of the continued growing interest in real estate, developers have begun to take notice in Chicago.

"Chicago is starting to mimic the trend from other cities in the condo hotel business," said Gail Lissner, vice president of Appraisal Research Counselors of Chicago.

"I think the interest is a simple response to supply and demand," Fields said. "This is a property type that has proven to be very desirable in many markets and Chicago will also prove to be a desired location."

Joel Greene, a licensed real estate broker with the Condo Hotel Center, said developers recognize the possibilities in Chicago.

"The developers see a lot of people buying real estate and doing business in the Financial District," he said.

According to Fields, the Hyatt was chosen because of a lack of other viable locations. It is a choice location, because it is so close to theaters, museums and other attractions, such as Millennium and Grant parks, he said.

Lissner said that many Chicago hotels have had low occupancy since 9/11, and the focus is to find a way to bring back revenue.

"The success of this concept is predicated on hotel occupiers creating strong rental rates and a strong market in order to provide good financial investments for the buyers," Lissner said.

"Over the years, real estate has continued to go up, even though the stock market has gone down," said Scott Gilbert, a sales agent for The Blake. With these new opportunities popping up, he said they hope the market will stay up.

According to Lissner, three other condo hotels are set to open up in the city over the next couple of years, including the Trump Tower and The Century, another hotel marketed by Sudler.

Gilbert said one of the benefits for potential buyers is to own a condo without having to do any of the work, and still enjoy a return on that investment.

"They can occupy the unit whenever they want, depending on the terms in the rental agreement," he said. "When unoccupied, management will handle all the maintenance and the unit will stay in the rental pool."

The Blake will be operated by the San Francisco-based Kimpton Hotels Group, which specializes in the condo hotel business. According to Gilbert, the old Hyatt's interior is having a $6.5 million overhaul. Each unit will be fully furnished to include granite counter tops and plasma TVs. The renovation will continue on into the New Year with completion expected in early spring, Gilbert said. Any completed units will be available to the owners beginning in January; 69 of The Blake's 162 units have already been reserved.

The hotel was originally slated to be named The Morton, to pay tribute to originally being the Morton Salt factory. In September, Morton's of Chicago Inc. brought the company to court, arguing that its customers might confuse the name with its steakhouses. This lawsuit resulted in the name change. According to Fields, it was determined to be in everyone's best interest to just change the name rather than fight a court battle. They did not want to cause any inconvenience to the owners who already have reserved units.

However, The Blake makes reference to a Printers' Row standard. According to Fields it is a reference to a type of foundry in England called Stephenson Blake, creators of many fonts now regarded as classics.