Although a building boom in the U.S. hotel industry will add a whopping 127,500 new rooms to the market this year, travelers are unlikely to benefit from lower room rates, according to the Lodging Research Network, the Internet-based resource from Coopers & Lybrand LLP.
The 16 percent increase in construction of new hotel rooms over 1996 will bring occupancy rates down to 63.1 percent in 2000 from 64.6 percent today. But rooms rates will continue their increase, Lodging Research predicts, jumping to $78.47 in 1998 and $82.59 in 1999 from $74.29 per night this year.
The price increase is being fueled by increasing hotel room demand, which is growing at about 2.2 percent per year. That demand has offset the impact of competition brought about by the 1,250 new hotels set to open in 1997–a record for any one year.
Prime property
A choice vacant square block now being used as a parking lot on Chicago’s North Side has been acquired by a partnership of Magellan Development Group and Near North Properties, whose principal is architect James Lowenberg.
The partnership declined to disclose the purchase price or plans for the parcel, which sits opposite Holy Name Cathedral and is bounded by State, Dearborn, Superior and Huron Streets. But a residential project is a strong possibility, given the background of the new owners.
Magellan Development, headed by veteran developer Joel Carlins, is currently active as co-developer in two luxury condominium developments on the Gold Coast–the 185-unit Park Newberry at Delaware Place and the 17-story 21 West Chestnut Place. Lowenberg’s architecture firm is the designer of both of those projects.
College bound
Robert Morris College said this week it will take over 165,000 square feet in the former Sears store on State Street for an expansion and relocation of its main campus.
Dr. Richard Pickett, chancellor of the 84-year-old non-profit institution, said the larger site will enable the college to expand its library, computer and laboratory facilities. The school, which said its decision reflects a commitment to a Chicago-based student body, will move from 180 N. LaSalle St. when its renovations are completed next summer.
The $15 million project will be under the direction of K. Peterson Associates, a Lisle-based architecture firm. The building at 401 S. State was originally designed by William Le Baron Jenney and opened in 1891.
Industrial strength
The Chicago industrial market continued on a four-year roll in the latest quarter, with 7.3 million square feet of lease and sales transactions, according to CB Commercial Real Estate Group. The quarterly numbers boosted activity for the year to date to 27.8 million feet from 26.5 million feet through three quarters of 1996.
Despite the demand, vacancies rose in the quarter to 8.1 percent from 7.5 percent as many new speculative industrial buildings came on the market.
But CB analysts said the wave of new construction seems to be slowly subsiding, paving the way for additional gains in the market.
More than 1 million feet of new industrial product was under construction in both Cook and in Will Counties, the latest data show.
The hottest markets within the region were in the O’Hare corridor and on the South Side of Chicago, where space absorption hit 4.8 million feet and 3.4 million feet, respectively.
Pointe taken
Park Pointe, a new condominium development at 520 N. Halsted St. in Chicago’s burgeoning River West neighborhood, will open for preconstruction sales this month.
Developed by Diversified Real Estate Concepts Inc., Park Pointe will features 126 residences in a nine-story building. The one- to three-bedroom plans are priced from $129,900 to $333,900.
Expansion mode
Fanuc USA Corp. has purchased nearly 90 acres of vacant land in Hoffman Estates from Ameritech Corp. for a reported $17 million and plans to develop a corporate headquarters for itself on the site.
Currently based in Elk Grove Village, Fanuc USA is a manufacturer of computer numeric controls for machine tools. The company needs the new land to more than double the size of its offices and light manufacturing operations, to 175,000 square feet. A sister company, Fanuc Robotics Midwest Division, will also move to the new site.
Construction on the facility is expected to begin in November.
In anticipation
Ground has been broken on a 150,000-square-foot office building at the Corporate Lakes development in west suburban Lisle. Quadrangle Development Co. and Lisle Corporate Lakes LLC, the developers and owners of the new multitenant speculative building, have chosen McShane Construction Corp. and the builder.
Situated on a 7-acre parcel at 2300 Cabot Drive, the building is being constructed in response to strong demand for office space in the high-tech corridor along Interstate Highway 88. Quadrangle officials hope to have tenants lined up in time for the scheduled opening next July.
Deal of the week
Eklind Tool, a maker of hex key tools, has purchased 102,000 square feet of industrial space at 11040 King St. in Franklin Park and will relocate its operations there from Chicago. Paine/Wetzel Associates, which represented the tenant, said Eklind would expand in the move.
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Chicago Tribune real estate editor Steve Kerch reviews realty news and answers your questions on housing and other topics on The Real Estate Show every Friday from 9:40 to 10 a.m. on Channel 26-WCIU.
