Real estate investment trust Braemar Hotels & Resorts plans to convert the brand-managed Sofitel Chicago Magnificent Mile into a franchise. The strategic change is slated to take effect next month, with the hotel continuing to operate under the Sofitel brand.
The franchise transition will see Remington Hospitality managing the 415-room hotel under the current terms of its master hotel management agreement with Braemar. Remington Hospitality will give offers for all employees employed on the conversion date to remain in their current positions as employees of a subsidiary of Remington Hospitality.
Braemar said that no property improvement plan is mandatory for the conversion but the company plans to upgrade the hotel’s lobby, restaurant and meeting spaces within the next two years.
“We are pleased to announce the conversion of the Sofitel Chicago Magnificent Mile from being brand-managed to a franchise, and we look forward to working with the Accor team in this new capacity," Braemar President and CEO Richard J Stockton said in a statement. "We expect an immediate uplift in the value of the property due to the Sofitel brand remaining on the hotel and the management agreement with Remington being terminable on sale.”
Last month, Braemar closed on a $363 million refinancing deal for five of its hotels, including the Sofitel Chicago Magnificent Mile. The loan has an initial two-year term with the potential for three one-year extensions, subject to specific conditions being met. This arrangement could extend the loan's final maturity to 2030, the company said.