LaSalle to slow down hotel conversion of former IBM Plaza

24-Oct-08 – The owner of Hotel Sax and commercial property at Marina City has announced it will slow down “to a normal development schedule” its conversion of 330 North Wabash, formerly known as IBM Plaza, to a “super-luxury” hotel.

In March, LaSalle Hotel Properties said it would convert 12 lower floors of the building, located across State Street from Marina City, into a 335-room hotel. LaSalle paid $46 million for floors 2-13 of the 52-story building, and plans to spend an additional $100-200 million renovating.

In a news release issued on Wednesday, the company says it has “modified the fast-track schedule for the IBM Building conversion in Chicago to a normal development schedule with major construction commencing in 2010 and the super-luxury hotel opening in 2011.”

The construction slowdown is one of a few steps the publicly-owned company is taking to improve its bottom line, including reducing its quarterly dividend.

Hans Weger, Chief Financial Officer, said the action was taken because of “the current challenging economic environment and the view that the U.S. economy, as well as the lodging industry, will likely continue to face declining economic trends through 2009.” (Left) 330 North Wabash (at far right in image), located across State Street from Marina City.

LaSalle Hotel Properties is a real estate investment trust headquartered in Bethesda, Maryland. Besides Hotel Sax, LaSalle owns the 751-room Westin Michigan Avenue and 29 other luxury hotels.

 Related story: Hotel Sax owner to expand across State Street