Essex Realty Group, Inc. facilitated the sale of The Plymouth in the heart of Chicago’s Loop. Located at 417 South Dearborn St., the Plymouth features 30 apartments and multiple common area spaces including a rooftop club room and fitness center.
LG Group, developed the property and hired Essex Principals Jim Darrow and Jordan Gottlieb to exclusively market the property for sale. Essex Director Matt Feo represented the buyer, a local investor, who purchased the property for $16,875,000, which equates to $562,500 per unit.
The entire property is master leased by Sonder, Inc., a publicly traded international hospitality company combining the comfort of a home with the amenities of a hotel. Sonder is the ideal subtenant to reside in The Plymouth as they guarantee 100% occupancy with substantially reduced operating costs and time typically required to manage a property of this size. Sonder’s current market capitalization is over $1 billion.
Gottlieb explains this property, though operating as a hotel, lives like a full-amenity apartment building with full kitchens, in-unit laundry, and a club room and gym, which enables hotel operators to rent units at a premium daily rate. Owning hotel units that are built with high-end apartment finishes offers great flexibility to a landlord. Should the building convert back to apartments or student housing, the owner has very limited capital expenditures required to make that switch.
Feo said, “Sonder continues to disrupt the hospitality space with their unique, and innovative model. This was a fantastic opportunity for the buyer to acquire a trophy asset that not only cashflows above traditional multifamily returns, but does so with passive management and a master lease tenant who is rapidly growing their brand across the globe.”