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KHP Capital secures $68M refinancing on Kimpton Gray hotel

Kimpton Gray hotel

Hotel real estate private equity firm KHP Capital Partners refinanced its debt on the Kimpton Gray hotel with a $68 million loan.

PNC Bank provided the loan for the 281-key property at 39 South LaSalle Street, according to Cook County property records.

The loan is the bank’s biggest in Cook County this year. PNC also provided a $65 million mortgage earlier this year to CA Ventures and White Oak Realty for the redevelopment of the Father & Son Plaza on the North Side.

In 2014, San Francisco-based KHP said it planned to spend $106 million to acquire the vintage office building from Itasca-based Hamilton Partners and converting it into the boutique hotel. It would use $14.6 million of historic tax credits to cover part of the cost, Crain’s reported at the time.

Chicago-area hotels are staying busy, even with a multiplying field of competitors. The region’s occupancy rate nudged up during the 12-month period ending in June, according to Marcus & Millichap.

A couple of blocks down from the Kimpton Gray hotel, Prime Group is embarking on a $93 million effort to convert the top five floors of the downtown hotel building at 208 South LaSalle, shifting from office space to a separate boutique canopy hotel.

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