Virgin Hotels has sold its 250-room hotel in Chicago for more than $77 million to a firm that specializes in converting properties to timeshare investments, leaving an uncertain future for the historic property where billionaire Richard Branson rolled out the hospitality concept just over a decade ago.
The hotel at 203 N. Wabash Ave. on June 30 sold for just under $77.4 million to an affiliate of Birmingham, Michigan-based Accelerated Assets, according to online property records.
The sale comes at an apparent loss to Virgin Hotels and its development partner on the project, Miami-based Lionstone Development.
Because of the buyer’s history of developing and financing timeshare properties, it’s unclear how long the original Virgin Hotel will continue as a traditional hotel.
In an email, a Virgin spokesperson confirmed the sale and said that “Virgin Hotels North America LLC will continue to manage the hotel under the Virgin Hotels brand.” Asked how long that would continue, the spokesperson declined to comment.
The sale comes just over a decade after the hotel opened to fanfare in early 2015 within the 25-story building along Wabash and Lake Street. The building, a Chicago landmark, is a short walk from the Chicago River, the Magnificent Mile shopping avenue and Millennium Park.
Since the Chicago debut, Virgin Hotels has expanded its portfolio to now include hotels in Dallas, New York, New Orleans, Nashville and Las Vegas. It also has two hotels in Scotland, in Glasgow and Edinburgh, and late last year one opened in London. Hotels in Denver and Miami are upcoming, according to the company’s website.
The hotels are part of Branson’s Virgin Group business empire, which began with Virgin Records and now includes Virgin Airlines. Virgin Group also has backed companies including the video Ring doorbell and payments app Square.
Virgin’s debut hotel cost more than $117 million to redevelop within the landmark Old Dearborn Bank building, according to Crain’s Chicago Business, which previously reported the sale to Accelerated Assets.
Accelerated Assets and Lionstone Development did not respond to requests for comment.
JLL brokers began marketing the hotel for sale in 2023.
Virgin and Lionstone bought the building for $14.8 million in 2011 and took out a $50 million construction loan, according to Cook County property records.
The hotel was later refinanced in early 2020 with a $37 million loan from Prime Finance Partners, property records show. That loan was paid off in May, online records show.
It’s unclear exactly what Accelerated Assets has planned for the Chicago hotel, but the firm’s business model is to acquire, develop and finance properties where individuals buy into timeshare ownership stakes.
One previous project in Chicago, according to the firm’s website, was the conversion of the Hotel Blake in the South Loop into a 162-room timeshare resort. Its partner was Bluegreen Vacations.
Accelerated Assets’ other projects have been in markets including New Orleans; Orlando, Florida; and Honolulu.
For the record
The sellers were represented by JLL brokers Adam McGaughy and John Nugent.