The Embassy Suites hotel at 707 Butterfield Road in Lombard has new ownership after a foreclosure fight that stretched across more than a year. Endeavor Hotels bought the 262-room property for $24.1 million, closing a deal that resolves a loan default and receivership sale tied to the hotel's previous owners.
The sale price actually came in above the roughly $23 million pricing guidance that brokerage Hunter Hotel Advisors had set, according to Endeavor Hotels co-founder Vishal Thakkar, speaking to The Real Deal. The deal covered the previous owner's distressed loan balance, ending a dispute that began when the hotel's $25.3 million loan went unpaid past its May 22 maturity date, as previously reported by therealdeal.com.
The hotel had been owned by a partnership between Rob Alter's Seaview Investors and Chelsea Hospitality Partners, headed by Gary Stougaard. That ownership group paid nearly $34 million for the property in 2015 and later put another $9 million into capital improvements, per Thakkar. Their loan, originated by Western Alliance Bank in 2019 before it was sold into a commercial mortgage-backed securities package, matured unpaid at $23.8 million in May 2025, according to court records and loan data cited by the same outlet.
KeyBank Moved to Foreclose, Then Installed a Receiver
KeyBank, acting as special servicer for the bondholder consortium that held the loan, filed a foreclosure suit in DuPage County against the former owner and installed a receiver to sell the property. The lender's exposure had reached $22.9 million, including $21 million in unpaid principal and $1.6 million in additional advances. Representatives for Seaview and Chelsea did not return requests for comment on the matter, per the same report.
Thakkar said the lender walked away without losing money on the deal, though he also described that framing as something of an exaggeration about the broader losses sellers and lenders have taken across Chicagoland's hospitality sector since the pandemic. Morningstar credit loan data cited by the outlet shows the hotel generated $11.4 million in revenue and $3.5 million in net operating income in 2025, with occupancy at 64 percent that year. In the first half of 2026, the property brought in $4.2 million in revenue against $3.6 million in expenses, producing just under $561,000 in net operating income — short of the more than $619,000 the hotel owed in debt service obligations over that same period.
A Neighbor Deal and a Bet on Suites
Endeavor Hotels, based in Oakbrook Terrace, already owns the 151-room Hyatt Place directly across the street from the Embassy Suites. Thakkar cited operational synergies between the two properties, along with DuPage County's lower property taxes compared with Cook County and the area's regional transit and shopping access, as reasons behind the purchase. The company received an acquisition loan from an unidentified regional bank covering about 70 percent of the purchase price, Thakkar told the outlet.
Endeavor plans to spend more than $7.8 million on upgrades over the next three years, or roughly $30,000 per room. Thakkar argued that suite-style properties face steep construction barriers today, saying banks would not finance ground-up construction for a similar asset under current lending conditions — a dynamic he sees as part of the rationale for buying rather than building.
Wider Pressure on Suburban Chicago Hotels
The Lombard transaction lands amid broader strain across the region's lodging market. Revenue per available room in Chicago grew 6 percent year over year in the first quarter of 2025, according to JLL data, yet inflation has continued cutting into industry margins even as the sector recovers. Corporate travel remains suppressed even as leisure travel rebounds, a dynamic that has weighed on suburban properties reliant on business guests.
Debt distress and sluggish corporate travel are casting a long shadow over suburban Chicago's post-pandemic hospitality sector more broadly, therealdeal.com reported. There is $18.7 billion in maturing hotel CMBS debt, nearly 70 percent of it carrying a floating interest rate — a setup that could push more distressed properties toward sales similar to the Embassy Suites deal. A Hyatt property in nearby Lisle has also been sold.
Other recent suburban and city sales illustrate the discounts sellers have been forced to accept. The 412-room Westin Chicago North Shore in Wheeling sold for $34 million, or $83,000 per key, in 2024 — a 34 percent discount from the $51 million it fetched in 2013. Magna Hospitality sold Evanston's Hilton Garden Inn for $25 million, or $140,000 per key, after buying it for $23 million in 2016. And Fortress Investment Group bought the 525-key Westin O'Hare in Rosemont for $50 million this year, a deal that resulted in a 39 percent loss for seller Clarion Partners relative to its 2015 purchase price.
Endeavor's growth has not been limited to Lombard. The company also bought the seven-property Midway Hotel Center campus near Midway International Airport from RLJ Lodging Trust, paying $110 million in total costs, with much of that price allocated to furniture, fixtures and equipment following recent renovations at several of those properties.
