Chesapeake Lodging Trust (NYSE: CHSP) (the “Trust”) announced today that it has acquired the 520-room W Chicago - Lakeshore located in Chicago, Illinois for a purchase price of $126.0 million, or approximately $242,000 per key, from Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT). The Trust funded the acquisition with available cash and cash equivalents and a borrowing under its revolving credit facility. The Trust entered into a long-term management agreement with Starwood to continue operating the hotel under the W® flag.
James L. Francis, the Trust’s President and Chief Executive Officer, stated, “This is a unique opportunity for Chesapeake to expand its Chicago footprint with the only lakefront, luxury-branded hotel in Chicago. This acquisition further complements and creates operational and sales synergies with our W City Center property that we also purchased from Starwood in May of last year. Starwood has proven to be an outstanding partner and we are very pleased to have found an opportunity to further expand our relationship with such a high-quality operator.”
W Chicago – Lakeshore, located at 644 North Lake Shore Drive, is a 32-story, full-service, luxury property with 520 rooms, including 42 suites featuring stunning views of Lake Michigan. The property features one three-meal restaurant, two full-service bars, including the roof top Whiskey Sky, the 9,600 square foot Bliss® Spa, SWEAT® state-of-the-art fitness center and over 12,000 square feet of meeting and event space. The property is also the closest hotel to the Navy Pier and within walking distance of East Michigan Avenue and Chicago’s business districts.
The Trust will immediately begin the planning process to execute a $35 million to $38 million comprehensive renovation of the property, which is expected to commence in the fourth quarter 2013. “The W brand has evolved into one of the world’s most recognized luxury lifestyle brands and we are energized about elevating the Lakeshore property to the highest of standards and exceeding our guests’ expectations. This is an outstanding piece of real estate with a truly unique market position and through this renovation program, we will ascertain the true potential of the W Lakeshore,” stated Mr. Francis.