CBRE Hotels presents the opportunity to acquire the fee-simple interest in the 158-room Holiday Inn Midway Airport in Chicago, IL.
Officially reopening in July of 2021 as a Holiday Inn, the five-story building underwent an $11.3M, or $72K per key, transformative renovation which included a complete modernization of the guest-facing amenities such as guestrooms, lobby, corridors, and meeting space, and numerous building and maintenance upgrades.
Chicago Midway Airport, located just two miles north of the Property, serviced over 19.9 million passengers across 214,000 flights in 2022. These figures are expected to grow as the airport is undergoing a $330M expansion project, labeled the Midway Modernization Program.
In addition to the proximity to the airport, the Holiday Inn benefits from its dynamic location along Cicero Avenue, amongst a diverse set of demand generators including Tootsie Roll Industries, CSX Railroad Company, Mondelēz International Chicago Bakery, Advocate Christ Medical Center, Ford City Mall, and SeatGeek Stadium.
For year-end 2022, the Hotel achieved a RevPAR of $82, driven by occupancy and ADR of 75% and $110 respectively and achieved an NOI level of $1.15M, which is equally impressive given that this was its’ introductory year. While the first year was impressive from both a revenue and operational perspective, there are several opportunities for new ownership to capitalize on in the coming years.
In addition to increased revenue performance, the Holiday Inn should also drive a higher Net Operating Income margin as Tavern at Midway will be replacing the existing Burger Theory food and beverage outlet. The profitable in-place Tavern at Midway lease presents a new owner with the opportunity to increase returns throughout their hold period as this lease should assist in maximizing the Hotels operating margins thus increasing profitability.
Offered unencumbered of management, new ownership is expected to receive a long-term franchise agreement with minimal PIP work, which will allow a new owner the opportunity to implement their own marketing plan to capitalize on the impressive operating performance achieved by the current management team.
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