Three hotels, with a single owner, put out the welcome mats at Clark and Illinois
BY DAVID ROEDER AND FRAN SPIELMAN Staff Reporters July 2, 2013 5:20PM
A three-hotel complex at the northeast corner of Clark and Illinois includes a Hyatt next to a Fairfield Inn. | David Roeder~Sun-Times
Updated: August 4, 2013 6:29AM
In real estate development, as in life, something truly new is rare. But a hotel complex that has opened in River North can fairly be called unique. It’s also a sign that the neighborhood just north of the Loop is maturing economically and standing on its own as a destination for work or leisure.
Three hotels opened June 20 at the northeast corner of Clark and Illinois. It’s a hospitality triplex of independent brands appealing to different segments of travelers, although the properties are under common ownership.
Two-hotel buildings have been tried here before, but one of the partners in the triplex, Albert Friedman, chairman of Friedman Properties Ltd., said he’s unaware of anyone else in the United States trying three of them together.
Hotels don’t mind being in clusters, but they like a little separation from the competition. Friedman, a partner in the hotels with White Lodging Services Corp., said the higher cost of urban development made it attractive to split the 38,000-square-foot site among three operators.
They are Marriott’s Fairfield Inn & Suites, which caters to families; Aloft Hotels, a Starwood brand for urban hipsters; and Hyatt Hotels’ Hyatt Place flag, which aims for business travelers. Together, they account for 664 rooms, promising an infusion of guests for nearby restaurants.
The biggest landlord in River North, Friedman said he’s hoping the economic spinoff will benefit the area and his many tenants, even the parking lots he owns. “I’ve found that to have a true neighborhood, you need to have a diversity of uses,” he said.
Friedman added that hotels tend to be good neighbors because they are busy at times when other buildings, such as an office center, are quiet.
The triplex opens at a time of strong demand in the downtown lodging market. Bryan Hayes, chief operating officer of White Lodging, said River North has a record of posting the highest hotel occupancy rates in the Chicago market.
Still, the recession caused difficulties for the project, which required about four years to finish. Hayes said his team was fortunate to find three hotel brands that wanted to keep their development pipelines active regardless of the economy.
“I don’t think you’ll see another one of these built for some time,” Hayes said.
Another partner in the deal is Lettuce Entertain You Enterprises, which has opened a restaurant at 519 N. Clark next to the Aloft lobby. Called Beatrix, it’s open for breakfast, lunch, dinner and late-night and will try out ideas that emerge from the company’s test kitchen.
SOUTHPORT SATISFACTION: Chicago-based investment firm L3 Capital admits that it has a certain fixation on Southport Avenue in Lake View. It has closed on three retail properties for $6 million on the street, bringing its investments along Southport to $19 million. The firm’s holdings are concentrated on a two-block stretch from Roscoe to Addison.
“Retailers are performing very well on this street and we believe that the properties we have acquired hold significant long-term value,” said L3 principal Timothy Phair.
Its most recent acquisitions cover 9,000 square feet at 3423, 3434 and 3451 N. Southport, all fully occupied.
Last December, L3 bought 28,000 square feet in four buildings for $13 million.
TECH LANDING: FieldAware, a software company that provides products for mobile work forces, opened a 6,000-square-foot office in Chicago at 111 N. Canal, where it hopes to have 80 employees by the end of the year. Mayor Rahm Emanuel personally welcomed the company.
Brendan Sullivan, chief marketing officer for FieldAware, said the Chicago office represents an expansion for a company that has 100 workers. Its other offices are in Dublin and Plano, Texas.
INDUSTRIAL STRENGTH: It doesn’t always get a lot of respect in media coverage, but the industrial market can be a major jobs generator.
So it qualifies as good news that according to preliminary second quarter numbers from CBRE Group Inc., the industrial vacancy rate in the Chicago area fell to 8.7 percent from 9 percent at the first quarter. The drop is unusually large for a single quarter, and CBRE noted that rents are rising because of the reduced inventory of space.
These recent deals attest to the market’s strength:
— Integrated Merchandise Systems, based in Morton Grove, leased 314,000 square feet at 10100 58th Pl. in Kenosha, Wis., doubling its occupancy in a building there.
— Venture One Real Estate LLC bought two industrial buildings totaling 158,000 square feet. They are at 901 Corporate Grove Drive in Buffalo Grove and 1560 Frontenac in Naperville. These are the first investments of a new fund that is looking at purchasing two million square feet in the Chicago area within the next four years.
— Logistics firm Exel added 90,000 square feet to its existing 269,000 square feet at 875 Crossroads, Romeoville. Arthur J. Rogers & Co. represented Exel.