Lender ACORE seizes distressed River North hotel from JRE with deed in lieu

"The owner of a hotel in a 16-story River North building handed the property over to a lender to avoid foreclosure after trying and failing to sell it since early 2024, in the latest reminder that there's still plenty of financial trouble to shake out of Chicago's lodging sector amid its ongoing recovery. New York-based landlord JRE Partners signed over a deed in lieu of foreclosure for the 297-room 21c Museum Hotel at 55 East Ontario Street, as San Francisco-based lender ACORE Capital moved to seize the asset, according to public records, with the transfer effective Sept. 25."

"JRE borrowed $67.5 million from ACORE to finance the purchase. In 2019, JRE and ACORE agreed to increase the mortgage amount to $73 million. Records show the deed in lieu valued the property at just under $60 million; it's unclear if that figure represents the remaining debt owed to ACORE or its estimated value, though either would mark a big hit to the property's worth."

"JRE in 2018 purchased the hotel then called the James Hotel before a pricey renovation and rebrand into the 21c Museum for $83.1 million. At the time, the landlord was known as Junius Real Estate Partners and was a division of J.P. Morgan. It split off and rebranded as JRE Partners in 2022. The hotel reopened in 2020 as 21c Museum Hotel Chicago after the landlord spent $33.5 million on upgrades."

JRE Partners signed over a deed in lieu of foreclosure for the 297-room 21c Museum Hotel at 55 East Ontario Street to ACORE Capital, effective Sept. 25. The transfer followed unsuccessful attempts to sell the property since early 2024. JRE purchased the building in 2018 for $83.1 million, rebranded and reopened it as 21c Museum Hotel Chicago in 2020 after $33.5 million in upgrades. JRE originally borrowed $67.5 million from ACORE and later increased the mortgage to $73 million in 2019. Public records show the deed in lieu valued the property at just under $60 million, implying a substantial loss relative to prior financing and purchase prices. 21c Museum operates additional properties across several U.S. cities.

Read at therealdeal.com