Monthly ArchiveMarch 2009

chicago-condos & Chicago Real Estate pcherry on 25 Mar 2009

Chicago Spire Could Become Union Project

March 25, 2009 - There is evidently some behind the scenes activity going on with the Chicago Spire. Work on the 150 story, 2,000 foot Lake Shore Drive high-rise has been put on hold indefinitely until the housing market recovers and the project has several liens filed against it. But reports of negotiations between Shelbourne Development and AFL-CIO Housing Investment Trusts have surfaced in the Tribune and Crain’s, fueling speculation that construction on the Spire may restart with union funds and union workers.

Apparently the two groups have been discussing the possibility of the construction unions combining their pension funds to get the Spire moving again. The union is made up of three investment trusts, one of which is the Building Investment Trust, that has over $2.5 billion worth of assets. One of the objectives of this trust is to create jobs for its members.

If the deal goes through, the Spire construction project could generate five years worth of jobs for thousands of union workers, claims Tom Villanova, president of the Chicago and Cook County Building Trades Council. He told the Tribune that, “The main thing is jobs. We can use our own funds to benefit members.” Villanova also made it clear that those jobs would only be filled by union workers.

Shelbourne spokeswoman Kim Metcalfe was very upbeat about the possibility of an agreement on financing and wanted to make sure that everyone understood that the Spire is far from dead. “Clearly, the construction of the building is on pause, but nothing else about the building has stopped.” She also went on to sell the mega Chicago real estate project as a “Made in America” effort.

If Shelbourne can secure construction financing for the $1 billion Spire, it very well may be the only Luxury Chicago Condo project of that size to be built for a few years.

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chicago-condos & Chicago Real Estate pcherry on 24 Mar 2009

565 Quincy Immune To Auction Fever

March 24, 2009 - The year is still young, but so far the recent Vetro auction hasn’t caused a stampeed of Chicago real estate developers to rush to the gavel and unload units in a hurry. In fact, several are bucking the predicted trend and holding steady with prices, believeing that to slash the remaining units in a building devalues it as a whole. The Tribune recently ran an article about a couple of developers who adhere to that belief.

Belgravia Group, the force behind 565 Quincy is one of those developers who doesn’t intend to cut prices on their units even though they have unsold inventory.

Alan Lev, who is president of Belgravia, said in the article that, “There’s certainly a segment of people who say ‘if I can buy at 75 cents on a dollar, it’s a great thing. But there’s a certain segment of people that say ‘if they can sell at 75 cents on the dollar, why wouldn’t they sell for 50 cents on the dollar?’ ” Meaning that a buyer would never be able to know where the bottem end of the pricing was or if by closing time their unit would only be worth half of what they agreed to pay.

To give buyers some piece of mind, he is offering a price integrity guarantee at 565 Quincy. You’ll have to speak with a sales rep for the fine print on the deal, but basically it states that if you purchase a unit there and Belgravia lowers the prices on a comparable unit before you close on yours, you will also have your price lowered. This insures that you won’t be buying a unit that will be devalued by later sales. With teh exception of the Kopley Group, not may other Chicago Condo Lofts developers will make a guarantee like that.

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chicago-condos & Chicago Real Estate & Chicago Homes pcherry on 23 Mar 2009

February Chicago Home Sales Down 40%

March 23, 2009 - The latest numbers for February were released by the Illinois Association Realtors and sales for Chicago area homes dropped nearly 29% last month. February sales of homes within the city of Chicago dropped a hefty 40.4% as well. Only 841 residential units were sold, compared to 1,412 sold in February of 2008. According to Crain’s, the median price for Chicago condos and single-family homes fell 24.7% to an average of $218,250 this February, lower than the average $290,000 of February 2008 last year.

Nationally, sales of existing homes posted a gain of 5.1% from January 2009 to February 2009. That was the biggest increase in national home sales since July 2003. However, the national median home price fell dramatically to $165,400. That is a 15.5% drop from the national average of $195,800 from the same period last year and the second biggest drop in home prices ever recorded.

The main factors for the increase in existing sales is the high volume of foreclosures that usually have slashed price tags. The new $8,000 tax credit for first time home buyers could give the Chicago real estate market shot of energy, along with low interest rates on mortgages. But with some experts estimating that there is at least a 2 year supply of condos already on the market or about to come online, developers will probably continue to focus on selling out New Chicago Condos that are already completed rather than launch new projects.

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