The Fitzpatrick Hotel group in the US will sell its Chicago hotel after what its chief executive said was an offer he could not refuse. He would not reveal the price. Colm Keena reports.
John Fitzpatrick said that after the group abandoned its plan late last year for a $63 million (€52.8 million) condominium development at the Chicago hotel, he had been approached by a number of parties.
"Within a week, an Irish investor made an approach and that was followed by two US parties," he told The Irish Times. "A negative turned into a positive. An auction developed and we got a great price... What can you do when you get an offer you can't refuse?"
He said the market in Chicago has become "very hot" and the group was taking advantage of that. The money received from the sale of the Chicago hotel will now be used to concentrate on New York and the US east coast.
The condominium development generated interest from 120 potential developers, only half of the required number. Booking deposits were returned late last year and the scheme abandoned.
The Fitzpatrick group has two Manhattan hotels, the Fitzpatrick Manhattan and the Fitzpatrick Grand Central, and manages a third, the Fitzpatrick East 55th.
The group is in negotiations to manage a new 350-room hotel in Manhattan, due to be completed in 2009. The hotel is part of a $400 million hotel and apartment development on 29th Street being built by a US developer and Irish investors put together by Dublin-based Cathal McGinley of KMS Commercial.
Mr Fitzpatrick said he was "sad to see the Chicago hotel go", but New York and the east coast was where the strongest market now was. The hotel market in New York is "very hot at the moment, as is the property market", he said. At one stage, the Fitzpatrick group was thinking of expanding the group across the US.
The Chicago hotel is under contract to be sold to Denihan Hospitality Group, a 40-year-old family-owned hotel and property group that, up to now, has concentrated on the New York market.
In January, the group raised $532 million on the recapitalisation of its Benjamin and Affinia hotels in New York and said it intended to use the funds to grow its brands.
"We are delighted that the Fitzpatrick will become the first Affinia hotel outside New York and see the purchase of this property as an important step in building a national portfolio," said the co-chief executive of the group, Patrick Denihan.
