The relentless COVID-19 crisis isn't stopping developers from betting that the pandemic-ravaged hotel sector has a bright future in the Fulton Market District.
In what would be one of the largest hotels in the trendy neighborhood by room count, a venture of Chicago-based Marc Realty and Chicago investor Relu Stan are planning a 296-room hotel along Wayman Street between Sangamon and Peoria streets, according to a zoning application filed with the city.
The project would reuse a landmark four-story building the developers own at 310 N. Peoria St., which would be connected to a new building next door at 311 N. Sangamon St. rising 14 stories in place of the existing zebra-striped Fulton Market Kitchen property, plans show.
The proposal for the narrow stretch of land behind the Time Out Market Chicago food hall is a drastic expansion from a plan the duo rolled out in 2017 to simply add a fifth story to the smaller building and turn it into a 28-room boutique hotel. The 296 rooms at the newly proposed property would be second only to a 476-key hotel planned by developer North Park Ventures at 800 W. Lake St. on the list of largest hotels in the former meatpacking district.
It's a bold bet that hospitality will bounce back in a big way in Fulton Market after a coronavirus pandemic that has laid waste to both business and leisure travel, especially in big urban areas. Many hotels downtown have been closed for months without the ability to host large gatherings, and occupancy at those that are open has been less than 27 percent since mid-March, according to data from hotel research firm STR.
But the area still has a highly popular restaurant scene, and the impressive roster of companies such as Google, McDonald's and Mondelez International that have rushed into the gritty-turned-trendy neighborhood in recent years remains. That gives developers confidence that demand for hotel rooms from both leisure and business travelers will eventually return in full force.
Stan couldn't be reached, and a Marc Realty spokesman did not provide a comment. Office space also is planned on the "upper floors" of the proposed building, according to the zoning application.
A few hotels are already operating in the neighborhood, including the Ace Hotel and Hoxton Hotel, as well as the Nobu Hotel that debuted over the summer. Others proposed in the neighborhood include North Park Ventures' project and a 16-story, 259-room Standard Hotel planned by Marc Realty and New York-based DDG at 1234 W. Randolph St. that the City Council approved in December 2019.
A joint venture controlled by Stan and Marc Realty paid just more than $6 million in 2017 for the Peoria Street building, according to Cook County property records, a deal that completed a lucrative flip for another Chicago investor that purchased it for $3.7 million just three years before.
The site has been surrounded by new development in recent years, including the creation of Time Out Market Chicago. Developer Tishman Speyer is building a 13-story office building across the street from Fulton Market Kitchen. To the east, developer Sterling Bay opened a new office building at 333 N. Green St. earlier this year and New York-based Thor Equities is developing another office property next door at 800 W. Fulton Market.
The Peoria Street property is also adjacent to the former Nealey Foods wholesaling property at 900-914 W. Fulton Market, where Buffalo Grove-based Shorewood Development Group is reportedly planning to redevelop the site into a boutique office building.
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November 17, 2020 at 12:15AM
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Fulton Market hotel proposed - Crain's Chicago Business
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