A 39-room boutique hotel is planned for the historic Jewelers Building in the Loop after the 136-year-old building sold this month for $7.2 million.
A joint venture of Peerless Development and Honoree Properties bought the 40,000-square-foot building at 19 S. Wabash Ave., which is a city landmark and listed on the National Register of Historic Places.
A yet-to-be-identified hotel chain based in San Francisco has signed a 10-year lease for 24,000 square feet in the building, with plans for rooms featuring kitchenettes, according to information provided by Daniel Knorps, principal of KM Real Estate Capital, who brokered the deal.
Michael Cordaro, principal of Peerless Development, did not respond to requests for comment.
Construction is expected to start by late summer, with the hotel expected to open in 2020, Knorps said. Space Architects has been tapped to design the hotel space, and construction, renovation and tenant improvements are expected to cost an estimated $15 million.
Developers will be handling the building with care, preserving the facade as much as possible, Knorps said. New soundproof windows will be put in to counter the noise of the “L” lines just outside, and the exterior will be sandblasted, in addition to other refinements.
“The architecture is just incredible,” Knorps said. “There’s nothing designed like it anymore. You’re not just seeing one of those huge skyscrapers going up; we’re restoring a historic building.”
Located in Chicago’s Jewelers Row district, 19 S. Wabash is the only example of early work from Chicago architecture firm Adler & Sullivan remaining in the Loop. Completed in 1882, it was was listed on the National Register of Historic Places in August 1974 and designated a Chicago landmark in December 1981. The building’s previous owner was Nicholas Yassan of Rany Management, who purchased it for $4.5 million in March 2016, according to Cook County property records.
The Jewelers Building name also has been attached to the terra cotta building at 35 E. Wacker Drive.
The 39 new hotel rooms are being announced as the city is experiencing rapid growth in the number of hotel rooms downtown. More than 1,600 rooms were added last year, and another 1,800 are expected to be completed this year, according to Choose Chicago, the city’s tourism agency. There was a 15 percent increase in downtown hotel rooms from 2014 through the end of 2017, to a total of 42,456 rooms.
In addition to the planned hotel, 6,500 to 7,200 square feet of retail space is available in the building, Knorps said. The new owners are hoping upscale restaurants will lease space there, he said, adding that the building is one of the rare historic structures outfitted to house a restaurant.
Two retail tenants with long histories are already in the building: Iwan Ries Cigar Co. on the second floor and Diamonds on Wabash on the ground floor.
“I would like to stay,” said Sylvia Pessah, owner of Diamonds on Wabash, which has been at the site for 31 years. “I have no plans of leaving.”
Kevin Levi, fifth-generation owner of Iwan Ries, doesn’t either. His family once owned the building, and he runs downtown Chicago’s only smoking lounge there.
“I know we ain’t going anywhere,” he said.
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