Red Oak Capital Holdings, LLC provided $10 million for the acquisition and refurbishment of Four Points by Sheraton – O’Hare in Chicago.
Structured under Red Oak’s Core-Plus Bridge Loan program, the non-recourse, interest-only loan was structured with an 18-month initial term and a loan-to-stabilized-value of 54.54%.
The Loan proceeds will be used to fund a portion of the $13-million purchase price and support initial capital improvements. The transaction was originated by Red Oak Regional Manager Stratos Athanassiades, underwritten by Thomas Gorski, and administered by James Myatt. The sponsor is a seasoned hospitality investor with a portfolio of 20 assets worth in excess of $70 million in gross asset value, including 10 hospitality properties across the Midwest.
Located at 10249 West Irving Park Road, the 295-room, 195,000-square-foot hotel sits on 7.5 acres adjacent to Chicago O’Hare International Airport. Originally built in 1985 and last renovated in 2015, the full-service hotel offers an indoor pool, meeting space, restaurant, gift shop, and fitness center. The property has been operating well below submarket benchmarks, creating a significant opportunity for upside within one of Chicago’s most resilient hospitality submarkets.
The sponsor’s business plan includes a new Marriott franchise agreement, modest room upgrades in Year 1, and a larger Marriott-approved PIP renovation thereafter. The sponsor also intends to replace the existing third-party management, relaunch its airline partnerships, and implement a broader digital marketing strategy to boost occupancy and ADR.
