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Grand Chicago Hotel in Foreclosure, a Symbol of Covid-19’s Toll on Hospitality Industry

Grand Chicago Hotel in Foreclosure, a Symbol of Covid-19’s Toll on Hospitality Industry

Thor Equities, owner of the Palmer House Hilton, is in default on its $333.2 million first mortgage, court papers say

By Peter GrantSept. 22, 2020 5:30 am ET

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The Palmer House Hilton has been one of Chicago’s grandest hotels for more than a century. Charles Dickens and Oscar Wilde were guests. Frank Sinatra serenaded diners at its supper club. Over the past 15 years, the owner spent $173 million to overhaul the hotel, modernizing most of the 1,641 rooms.

But today, the property faces a bank foreclosure and has become one of the most potent symbols of the troubled hospitality industry during Covid-19.

Wells Fargo Bank said in court papers last month that the hotel’s owner, real-estate investor Thor Equities, was in default on its $333.2 million first mortgage, making the property one of the first major foreclosure actions during the pandemic. The Palmer House was worth $305.5 million shortly before Wells Fargo filed its action, appraisers said.

A Thor spokeswoman declined to comment.

Most property owners and lenders at first hoped that damage from the pandemic would be limited to an interruption of a property’s cash flow, without hurting long-term values. Creditors granted landlords forbearance or restructured loans, hoping they would be able to stay alive until business returned.TO READ THE FULL STORYSUBSCRIBESIGN IN

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