IRR-Chicago Mid-Year Viewpoint 2015 Local Market Report - Lodging
The Chicago market continues to benefit from the national economic recovery, though winter travel was negatively impacted by challenging weather conditions. An increase in conventions and visitor traffic is driving significantly positive ADR and occupancy growth, resulting in positive Revenue Per Available Room (RevPAR) growth of around 8% in the last twelve months. Such positive economic fundamentals have been driving new development of assets from luxury (Loew's and Langham) to economy brands.
The hospitality market in Chicago remains vibrant enough to attract new entrants, including several initial locations in the past 5 years for potential new national brands (Raddison Blu, Virgin Hotels, Hyatt Centric, among others). The strength of the hospitality market, especially related to the business segment, is also driving significant growth of supply in the Loop, where at least three Class B/C office buildings are in the process of converting to hospitality uses, bringing more economy rental options to a critical submarket that had already seen the JW Marriott recently added to meet higher priced business travel demand.
Additional hospitality development is rumored for both the Old Post Office as well as the Willis Tower, where Blackstone recently made the largest office investment in US history outside of New York. The Willis Tower investment was rumored to largely include perceived value from adding hospitality to the site to cater to both business as well as tourist travelers. Similarly, additional development in the River North and West Loop submarkets seems to be catering to perceived future growth in technology company travel demands while also supporting traditional tourist demand.
Download the full version PDF of this Local Market Report below. It includes graphs and tables.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.