Sam Zell group turning Elysian Hotel into a Waldorf Astoria
By David Roeder Business Reporter November 17, 2011 6:22PM
Updated: December 19, 2011 8:25AM
An investment group that includes billionaire Sam Zell and the Hilton hotel chain said Thursday it has acquired the swanky Elysian Hotel Chicago at 11 E. Walton and will convert it to a Waldorf Astoria.
Zell is involved in the deal through a fund operated by his Equity Group Investments. The fund specializes in the debt on financially troubled assets.
The Elysian is a 188-room hotel that opened two years ago. Industry experts said the hotel has not turned a profit even though it has received positive reviews as a competitor to the similarly pricey Peninsula and Four Seasons hotels in Chicago.
The magazine Conde Nast Traveler recently rated the Elysian the top hotel in the United States.
Zell hopes to profit by attaching the Waldorf Astoria name to the property and linking it to the Hilton reservation network. Hilton Worldwide Inc. owns the Waldorf Astoria brand, which is famous for its landmark hotel on Park Avenue in Manhattan.
Terms of the sale were not disclosed. Crain’s Chicago Business earlier reported a price of $95 million that would be the highest per-room price a local hotel has commanded, about $505,000 a key.
Hilton said the hotel will be renamed the Waldorf Astoria Chicago as of Feb. 1.
The sale announcement said certain owners of the Elysian will retain an interest. The property’s developer, David Pisor, could not be reached for comment.
Pisor had been seeking a buyer for the hotel that would allow him to retain control and he had talked of expanding the Elysian name to other cities. His co-investor in the project was Bahrain-based Arcapita Bank.
The Elysian is part of a 60-story building that also includes 51 condominiums.
With a net worth estimated by Forbes at $4.7 billion, Zell is known for his turnaround savvy, despite the embarrassment of his Tribune Co. takeover that led to the company’s bankruptcy. Zell has increased his investment in hotels, hoping an improved economy will lift their values.