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Chicago

Thor’s Palmer House hit with $300M+ foreclosure suit

Property was marked down by 45% earlier this month

Thor Equities’ Joseph Sitt and Palmer House Hilton at 17 East Monroe Street (Google Maps)
Thor Equities’ Joseph Sitt and Palmer House Hilton at 17 East Monroe Street (Google Maps)

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.

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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

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Commercial Real EstateHotel Market