US-based real estate investment trust (REIT) Braemar Hotels & Resorts has unveiled 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.
All employees at the hotel on the conversion date will be offered positions by a Remington Hospitality subsidiary.
Braemar said that no property improvement plan is mandatory for the conversion.
However, there is an intention to upgrade the hotel’s lobby, restaurant, and meeting spaces within the next two years.
The Sofitel Chicago Magnificent Mile boasts a location near railway stations and offers amenities such as a fitness centre, meeting rooms, pet-friendly policies, wheelchair accessibility, and various dining options.
Braemar Hotels & Resorts president and CEO Richard J Stockton said: “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.
“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.”
Earlier this year, Braemar Hotels & Resorts secured a $363m refinancing deal for five of its luxury hotels.
This loan is structured with an initial two-year term and the possibility of three one-year extensions, contingent upon meeting certain conditions.
