Chicago & Midwest + Downtown + Hospitality | May 25, 2023

Blackstone’s Club Quarters Chicago Appears Headed for Foreclosure

The 429-key Club Quarters Chicago hotel in the Central Loop appears headed to foreclosure after negotiations stalled on a delinquent CMBS loan valued at $274 million, the Chicago Business Journal reported.

CWCapital, the special servicer on the loan since mid-2020, is “pursuing foreclosure” for the hotel and three other CQ hotels in San Francisco, Boston and Philadelphia secured by the loan.

Although special servers are typically appointed to help borrowers and lenders resolve loan issues, a CMBS industry report said they “were unable to reach a workout agreement.” As recently as April, the report said the parties were still evaluating options. It’s still possible foreclosure could be avoided if an agreement is reached.

The loan was originated by Bank of America in 2017 to the hotels’ owner, a Blackstone Group real estate fund. It has been on a watchlist since early in the pandemic and been delinquent for 34 months.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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