Joe Sitt’s Thor Equities is facing a $338 million foreclosure suit at the Palmer House Hilton in Chicago, after the investor allegedly failed to make several mortgage payments on the trophy hotel property.
According to a complaint filed last week in Cook County Circuit Court spotted by Crain’s, Thor defaulted on the $333.2 million senior debt on the property. Wells Fargo, which is the lender, asked the court to appoint a receiver for the property.
An August appraisal of the 1,639-room hotel at 17 E. Monroe St. values it at $305.5 million, according to a Bloomberg report cited by Crain’s. That’s more than $100 million less than the $423 million CMBS loan on the property from 2018.
Thor bought the Palmer House for $230 million in 2005 and completed a $131 million renovation in 2008. The company, led by Joseph Sitt, saw net operating income at the hotel drop 20 percent year-over-year in 2019, even before the pandemic hit the hospitality industry. Thor has tried to sell the hotel at least twice in the last six years, asking $575 million in 2015 according to Bloomberg.
“The entire hospitality industry has been devastated by the pandemic,” a spokesperson for Thor told the Financial Times this month. The company declined to comment to Crain’s on the legal action. [Crain’s] — Akiko Matsuda