Legendary Capital, a sponsor of non-traded real estate investment trusts and other alternative investment offerings, has sponsored the acquisition of the 160-room Sheraton Hotel Chicago Northbrook in a $11.3 million transaction.
The deal utilized Legendary Capital’s “Equity Preservation UPREIT” structure, where the hotel’s owner contributed their property in exchange for a class of transition partnership units, allowing for the potential preservation of the contributor’s equity as the property re-stabilizes.
This is the fourth transaction Legendary Capital has sponsored in the past nine months using its UPREIT contribution mechanism.
“The Legendary Capital Equity Preservation UPREIT program is a unique and mutually beneficial transaction mechanism. Instead of acquiring debt and squeezing out an owner’s equity, our…platform creates a win-win-win proposition between the acquiring entity, the lender, and the contributing hotel owner,” said Corey Maple, chief executive officer.
Northbrook is in the third largest metropolitan statistical area in the United States, behind New York and Los Angeles. The Sheraton is located across the street from the headquarters of Medline Industries, a manufacturer and distributor of medical supplies. Crate & Barrel’s headquarters is also located less than a mile from the hotel, as are several other corporate headquarters including Allstate, Astellas, Bell Flavors & Fragrances and Walgreens.
“The corporate presence in Northbrook can’t be overlooked,” said Dave Durell, chief investment officer. “This is a sector that continues to grow, and the Sheraton is perfectly positioned among a number of big corporate names.”
Headquartered in Fargo, North Dakota, Legendary Capital has acquired 28 hotels through its affiliated entities and primarily targets 80-to-200 room limited-service, select-service, full-service and extended-stay hotels in America’s heartland.