Hotel Feasibility Study in the Chicago-Naperville-Elgin, IL-IN Metro Area

Low cancellations, big tickets in Chicago lodging

Hotels and motels around Chicago-Naperville-Elgin show a cancellation floor of only 7.4% for FY2017 to FY2024 approvals, rising to 9.7% when approvals not yet disbursed count as cancelled. That is a record in which most approved deals closed. The file holds 263 approvals worth $740.1 million. Chicago ranks 4 of 807 among all areas for lodging, though inside Chicago the class is only 7 of 39, and 0.72x on the location quotient shows lodging is a lighter share of local lending than of the nationwide mix.

Tickets are heavy. The median is $2.6 million, which is 1.21x the median for the class nationally; half of loans fall between $1.8 million and $3.9 million. SBA 7(a) carries 196 loans and SBA 504 carries 67, a sizeable fixed-asset side. Franchise share is 76.4%, so brand standards, property improvement plans and flag fees shape most projects. Limited-service and full-service properties sit under a single code, so the file cannot tell them apart; a study must name which type it tests.

Lenders and counties

Millennium Bank (IL) holds 63 SBA 7(a) loans and $192.3 million. GBank has 38 and $130.2 million, Byline Bank 12, and Shoreham Bank 10. On the SBA 504 side SomerCor 504, Inc. leads with 32 loans and $85.4 million, then Regional Development Company at 10, Wessex 504 Corporation at 9 and Small Business Growth Corporation at 6. Read these as SBA's holder records, which pass no judgment on any lender. Cook County, IL has 98 loans, Lake County, IN 36, Will County, IL 30, Lake County, IL 28, DuPage County, IL 21 and Porter County, IN 16.

The charge-off rate is withheld here under Loan Analytics' rule, so this page lists no number for it and does not treat the gap as nil. Approvals peaked at 35 loans in FY2019 and reached 34 loans and $115.2 million in FY2024, before falling to 15 loans and $42.2 million in FY2026. Chicago appears in the file as an area built from project counties under the 2023 delineation, and loans without a placeable county belong to no metro.

Testing a Chicago hotel project

A hotel study should measure room demand from business, convention and airport traffic, plus the supply already open, then test construction or renovation and brand costs against $2.6 million. Debt service has to be carried by occupancy and room rate, judged per available room, and the appraisal values the going concern as well as the property. The 263 approvals say nothing about any one project, and the study should show how its room count and rate would carry the debt on a loan near the $2.6 million median.