Chicago’s historic Blackstone hotel, where the political term “smoke-filled room” originated more than a century ago, has sold to a local investor for more than $43 million.
Vinayaka Hospitality acquired the 335-room hotel at 636 S. Michigan Ave. last week, according to online property records.
The sale came after years of attempts by the hotel’s longtime owners, Fundamental Advisors and Sage Hospitality Group, to sell the property, nicknamed the “Hotel of Presidents” because of stays by various U.S. commanders in chief.
The 23-story hotel overlooking Grant Park was built in 1910, according to CoStar data.
New ownership brings a new chapter to a Beaux-Arts structure that has hosted a dozen presidents, including Woodrow Wilson, Theodore and Franklin Roosevelt and John F. Kennedy, according to a city report on the building that was designated a Chicago landmark in 1998.
Yet the property’s biggest connection to U.S. politics was its role in Ohio Sen. Warren G. Harding winning the nomination during the 1920 Republican National Convention in Chicago.
Days into a deadlock on the party’s nomination from a crowded field of candidates, Harding emerged from what a reporter described as a “smoke-filled room” in which senators and party leaders poured themselves drinks, smoked cigars and chose an eventual president.
The term is now a common way of describing behind-the-scenes and sometimes questionable dealmaking.
Today the hotel, part of Marriott’s Autograph Collection, offers a large room called the “Smoke Filled Suite.”
Harding was elected president in late 1920, but died in office in 1923.
The sale price for the Blackstone was well below the $59.5 million that the property last sold for in 2016, according to CoStar data.
New York-based Fundamental and Denver-based Sage tried multiple times since then to sell the hotel, after making millions of dollars in upgrades.
When the Blackstone previously went on the market in 2022, Crain’s Chicago Business reported that a $52 million loan that New York-based Apollo Commercial Real Estate Finance provided in 2019 had matured the previous year, with a deal later reached to extend the maturity date.
During an Apollo Commercial Real Estate Finance earnings call with analysts in late April, Chief Financial Officer Anastasia Mironova said the commercial real estate loan remaining on its balance sheet was for “a hotel property in Chicago, which remains on non-accrual status.”
She added that the loan had “an amortized cost basis of $42 million and an upcoming maturity in May, at which point we expect it to be repaid through the sale of the underlying property,” with a buyer having signed a purchase agreement and made a hard deposit on the acquisition, according to a transcript.
The lender declined to comment. Sage and Fundamental did not respond to requests for comment from CoStar News.
The price was $43.2 million.
Vinayaka also did not respond to a request for comment.
It is the second high-profile acquisition in recent months by Schaumburg, Illinois-based Vinayaka Hospitality, which is led by suburban businessman Ketu Amin. Late last year, his firm bought the 752-room Westin Michigan Avenue Chicago hotel at 909 N. Michigan for $72 million.
For the record
The sellers were represented by JLL brokers Adam McGaughy and John Nugent.