Chicago Condo Directory

January 26, 2009 - The list of Chicago real estate projects that are marketing but haven’t been able to obtain a construction loan or break ground yet keeps growing. And with condo sales slowing at almost every project, hitting the magic number for lenders to fund a high-rise is getting even more difficult. In the past, usually 40% of a building’s units had to be sold before a construction loan could be secured. Now, many banks are requiring at least 50% and even 60% in some cases and they aren’t supplying all of the funds needed. The developer has to put up some equity as well. With that in mind, the future of The Peshtigo may be uncertain.

Related Midwest is the developer for this 57 story high-rise, and they have already had to cancel another large scale project, Canyon Ranch, due to lack of enough sales. The Peshtigo was designed by Ralph Johnson of Perkins and Will, with plans calling for 358 condo units in the $180 million development, according to an article in Crain’s. Of those 358 condos, only about 61 have been pre-sold so far, from data gathered by Appraisal Research Counselors. That’s only roughly 17% and far from what would be needed to gain financing.

The developer hasn’t issued any formal statement one way or the other as to whether or not the project will continue to market units, be shelved unit the economy improves or be scrapped completely. The excess inventory of new Condos In Chicago will increase this year as more projects wrap up construction, and more developers are deciding to wait out the cycle until at least 2010 before launching any more.

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