Virgin Group’s nascent brand Virgin Hotels announced its first development deal on Monday via the conversion of a historic downtown Chicago office building.
Virgin Group, London, partnered with The John Buck Company, Chicago, on the property’s purchase from Wabash Lake Partners LLC, Chicago and redevelopment. The amount of the transaction and redevelopment investment is not being released for the 250-room hotel.
“We paid what we think is a fair price,” said Anthony Marino, head of Virgin Hotels and managing partner of leisure and hospitality at Virgin Group. “If we want to build a long-term hotel business, and long-term hotel platform, the real estate has to make money. This one hit all around.”
In addition to Chicago, the new 4-star, lifestyle hotel brand has been allotted US$500 million to spend on setting up properties in Los Angeles, Miami, New York, San Francisco, Washington DC, and London.
Debut elsewhere?
Given the reconstruction timeline for the 27-story Art Deco building, located just off of Michigan Avenue and the Chicago River and originally built in 1928, and that the hotel’s design and food and beverage plans have yet to be cemented, the Chicago hotel is not planned to open until the fall of 2013. Virgin Hotels says it may debut at another location before then.
“Chicago is a pretty significant repositioning, I think there is a very good chance that it’s our first announcement but not our first opening,” said Marino. No other deals are ready for announcement, yet, though.
“We’ve got capital to be a partner or we can do third-party management deals. We will operate the hotels ourselves. We’re ready to operate, we’re ready to operate today,” said Marino.