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Bucktown condo site faces foreclosure
Crain's Chicago Business, Andrew Schroedter, 12/30/09
"...says Gail Lissner, a vice-president at Appraisal Research Counselors..."
A Chicago condo developer who recently criticized aggressive price cutting by rivals faces two foreclosure suits totaling $6.8 million. William Senne had proposed a 94-unit condominium project in the city’s trendy Bucktown neighborhood. Called EcoLogic Lofts, the proposed “green” building was to feature a rooftop garden, recycling stations and power-producing wind turbines. It could not be determined how many units were sold, but Mr. Senne, CEO of Chicago-based Senco Properties Inc., didn’t obtain construction financing and never broke ground at the site, near Fullerton, Damen and Elston avenues. His lender, Wheatland Bank of Naperville, says he defaulted earlier this year on two loans related to the project at 2339-59 N. Seeley Ave., according to foreclosure complaints filed Dec. 8 in Cook County Circuit Court....
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Chicago home sales up for 5th month
Chicago Tribune, Mary Ellen Podmolik, 12/22/09
"... according to Appraisal Research Counselors."
Chicago-area home buyers who weren't willing to bet that a federal tax credit was going to be extended closed on more than 6,826 existing home purchases last month, making November the fifth consecutive month of improved year-overyear home sales. It's questionable, though, whether the housing market will see a sixth consecutive month of improvement. Typically, home sales slack off as the holidays approach and buyers don't come back into the market until after the Super Bowl in late January....
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Arlington Heights apartments sell for $22 million
Crain's Chicago Business, Alby Gallun, 12/11/09
"... according to Appraisal Research Counselors..."
A Deerfield-based partnership paid $22 million for a 280-unit apartment complex in northwest suburban Arlington Heights, one of a flurry of year-end sales in a rebounding multifamily investment market. A joint venture led by Legacy Real Estate Development LLC closed last week on its purchase of the Waterford Place Apartments at 313 Happfield Drive, says Legacy Principal Rod Engel. The seller was Capreit Inc., a Maryland-based apartment investor that paid $17.2 million for the property in 1998....
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Stalled Chicago skyscraper project may start again
Air America, Assocoated Press, 12/9/09
"Gail Lissner, vice president of Appraisal Research Counselors, said..."
Construction of what would be North America's tallest building may move forward thanks to unions that not only want their workers to build it but are trying to put together a deal to help pay for it. A group of union pension funds — eager to provide work for union workers — are in talks to loan $170 million to Irish developer Shelbourne Development Group so construction of the twisting 2,000-foot-high Chicago Spire can resume as soon as early next year.....
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Stalled Chicago Skyscraper Project May Start Again
Architect Magazine, Don Babwin, 12/9/09
"Gail Lissner, vice president of Appraisal Research Counselors, said..."
Construction of what would be North America's tallest building may move forward thanks to unions that not only want their workers to build it but are trying to put together a deal to help pay for it. A group of union pension funds - eager to provide work for union workers - are in talks to loan $170 million to Irish developer Shelbourne Development Group so construction of the twisting 2,000-foot-high Chicago Spire can resume as soon as early next year....
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Push to Finish Tallest Tower
Wall Street Journal, Joe Barrett, 12/8/09
"... said Gail Lissner, vice president of Appraisal Research Counselors..."
The stalled construction of North America's tallest building, a 150-story luxury residential tower planned for downtown, may get a boost from unionized construction workers desperate for jobs. Any effort to save the Chicago Spire faces major hurdles, especially coming after a real-estate glut that flooded Chicago with new condos. Plans call for the 2,000-foot-high Spire to have nearly 1,200 units -- more than are expected to be completed for the entire city in 2010. Prices start at $750,000, with the bulk of the condos costing $2 million to $15 million. Workers broke ground with great fanfare in 2007, but the project stalled last year amid the financial crisis when funding dried up. That left many doubtful that the Santiago Calatravadesigned tower would ever emerge from the circular foundation that sits about a block from Lake Michigan. Associated Press An artist's rendering of the Chicago skyline with the Chicago Spire, a 150-story luxury residential building. Now a group of union pension funds is conducting due diligence on a plan to lend $170 million to Irish developer Shelbourne Development Group, said Tom Villanova, president of the Chicago and Cook County Building and Construction Trades Council, which represents 24 unions with some 100,000 members. Mr. Villanova said the individual pension-fund directors, along with an AFL-CIO pension fund and a union life-insurance fund, are working on a loan package secured by the development site that could be announced in coming days.....
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Union pension funds consider loaning $170 million to revive Chicago skyscraper
San Francisco Examiner, Don Babwin, AP, 12/8/09
"Gail Lissner, vice president of Appraisal Research Counselors, said..."
Construction of what would be North America's tallest building may move forward thanks to unions that not only want their workers to build it but are trying to put together a deal to help pay for it. A group of union pension funds — eager to provide work for union workers — are in talks to loan $170 million to Irish developer Shelbourne Development Group so construction of the twisting 2,000-foot-high Chicago Spire can resume as soon as early next year....
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Worst appears over for Suburban Apartments
Crain's Chicago Business, Alby Gallun, 12/7/09
"... says Ron DeVries, vice-president of Appraisal Research Counselors..."
Rents and occupancies at suburban apartment buildings inched up in the third quarter, according to a recent report, another sign that the suburban rental market is bottoming out. But it won’t bounce back until local companies start hiring again, which isn’t expected to happen anytime soon. Without jobs, would-be renters double up or move back home with their parents, the chief reason many suburban landlords continue to struggle. The market “appears to be stabilizing,” says Ron DeVries, vice-president of Appraisal Research Counselors, a Chicago-based consulting firm. “If we could just get some employment growth, we could be in a much better position for the spring rental market.” The suburban apartment occupancy rate rose to 92% in the third quarter, up from 91.7% in the second quarter, though still below 92.8% in the year-earlier period, according to an Appraisal Research report....
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Vistas are worth their weight in gold
Chicago Sun Times, 12/4/09
"... according to Gail Lissner, vice president of Appraisal Research Counselors..."
Condominium appraisers say breath-taking, unobstructed Windy City views are worth their weight in gold at resale time, especially in a slow real estate market. Premium views and a great location are a major lure for city condominium shoppers—so much so that they’re willing to pay a higher price for the vista, appraisers say. Great views have a concrete, and often hefty, value as an amenity, according to Gail Lissner, vice president of Appraisal Research Counselors, Ltd., who notes that the value of premium vistas sometimes could account for up to half of a condo’s value. Identical units are priced higher if they are positioned on higher floors, or overlooking Lake Michigan, the Chicago River or downtown’s skyline instead of city neighborhoods....
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Downtown apartments slip as glut looms
Crain's Chicago Business, Alby Gallin, 11/29/09
"... says Ron DeVries, vice president at Appraisal Research Counselors."
report by Appraisal Research Counselors. “It’s really not a signal that it’s a weak market,” says Ron DeVries, vice president at the Chicago -based real estate consulting firm. “Demand is strong. We’ve just got a supply bubble right now.” ...
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New condominium price cuts help absorb inventory in downtown Chicago
Chicago Sun Times, Don DeBat, 11/23/09
"... said Gail Lissner, vice president of Appraisal Research Counselors."
Like the whooping crane, the construction crane now is on the endangered species list in downtown Chicago. A few years ago, with a frenzied condominium boom in full swing, downtown visitors spent time gawking at dozens of construction cranes perched on the tops of high-rises. Current estimates indicate that about 4,000 condominium units now are being completed and ready for occupancy in downtown Chicago, and 64 percent of these residences already are under contract or sold, according to Appraisal Research Counselors’ Downtown Benchmark Report for the third quarter of 2009. “Inventory of completed, unsold new condominiums downtown now totals 3,225 units,” said Gail Lissner, vice president of Appraisal Research Counselors....
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2 Trump hotel unit owners face foreclosure
Crain's Chicago Business, Alby Gallun, 11/18/09
"... says Gail Lissner, vice president of Appraisal Research, the consulting firm."
Donald Trump’s ritzy new downtown hotel is attracting guests no property owner wants to see: foreclosure lawyers. In another bad sign for the New York developer, lenders have filed foreclosure suits on two condominium-hotel units in his 92- story Chicago skyscraper, which has been clobbered by the condo bust and the worst hotel market in decades....
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Elysian drops condo-hotel plan
Crain's Chicago Business, Alby Gallun, 11/11/09
"... says Appraisal Research Vice-president Gail Lissner."
After months of negotiations with its lender, the developer of the Elysian Hotel & Private Residences has scrapped a plan to sell the project’s 188 hotel suites as condominiums, removing a cloud of uncertainty over the new $280-million Gold Coast high-rise. The decision to drop the condo-hotel structure sets up the luxury hotel at 11 E. Walton St. for an early December opening, about five months later than planned. And it averts a potential headache for its developer amid signs that some hotel unit buyers, unable to get financing, would try to back out at closing time and possibly sue to negate their contracts. At the peak of the real estate boom, the condo -hotel was one of the hottest investment ideas in the country, allowing hotel developers to secure construction financing by shifting their risk onto individual investors, who could occupy their units or have them rented out. But the idea quickly fizzled, and just two downtown condo-hotel projects remain: the Trump International Hotel & Tower and the Raffaello, 175-room boutique hotel in Streeterville....
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Rental rebound? Some see signs in latest deal
Crain's Chicago Business, Thomas A. Corfman, 11/9/09
"... says Ron DeVries, vice-president with Appraisal Research."
In the biggest downtown real estate deal of the year, a Miami developer has agreed to buy a Streeterville apartment tower for more than $80 million, despite a bleak job market that is expected to reduce the number of renters next year. Crescent Heights Inc. has a contract to buy Cityfront Place, a 480-unit building along the north bank of the Chicago River, from Northwestern Mutual Life Insurance Co. for $83 million, according to people familiar with the transaction. The deal, the first sale of a downtown apartment building in more than two years, is a sign that rental properties, the last sector of the commercial real estate investment market to die, will be the first to revive....
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Downtown condos: Sales dismal, but development winds down
Crain's Chicago Business, Alby Gallun, 11/9/09
"... says Appraisal Research Vice-president Gail Lissner."
Downtown condominium developers limped through yet another quarter, but they have at least one reason to be thankful: The great condo building boom is coming to an end. For the past three years, downtown developers have built more condos than they've sold, the result of overexuberance and an easy-money ethos that swept through the real estate market in the middle of the decade. Though demand for condos sank in 2006, many high-rise developers had already passed the point of no return, leaving them with no choice but to finish projects they began when times were good. Demand and supply remained out of whack in the third quarter, when downtown developers sold just 56 condos and townhomes, vs. 313 in the second quarter and 160 in third-quarter 2008, according to a new report by Appraisal Research Counselors, a Chicago-based consulting firm. But the construction wave that peaked in 2005 is winding down, allowing demand to catch up with supply. After completing 4,155 units in 2008 and 4,061 units this year, downtown condo and townhome developers will finish just 900 in 2010, a 78% drop, according to Appraisal Research. Just 86 units are due to be completed in 2011....
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FBOP retains, plans to finish condo project
Crain's Chicago Business, Alby Gallun, 11/4/09
"... according to Appraisal Research Counselors..."
FBOP Corp. has lost all nine of its banks in a federally ordered takeover, but it hasn’t lost everything. The Oak Park-based holding company still owns a 120-unit condominium development across from Millennium Park, a project FBOP took over after the original developer defaulted on a construction loan. With 55 units left to sell amid a downtown condo glut, that may not seem like much of a consolation prize. But FBOP insists the development is on track. “The project’s in good shape,” says Rick Page, vice-president of corporate real estate for Park National Bank, an FBOP subsidiary that was taken over by U.S. Bancorp last week. Speaking on behalf of FBOP, he says the company “fully intends to complete the project.” The Federal Deposit Insurance Corp. seized Park National...
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2 downtown condo projects may switch to apartments
Crain's Chicago Business, Alby Gallun, 10/28/09
"... according to Appraisal Research Counselors..."
With the condominium market stuck in a funk, two more downtown condo developers are considering replacin “For Sale” signs with ones that say “For Rent.” The Mondial, a 141-unit condo project in River West, and the 100-unit Trio highrise under construction in the West Loop could go rental in the coming months, a switch that has become increasingly attractive in an overbuilt and cutthroat downtown condo market. “We’re just trying to figure out how fast all the other guys who are dumping units will clear the marketplace,” says Jack Berger, the developer of the Mondial, a nearly finished 15-story building at 900 W. Huron St....
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In current market, cash is king again
Crain's Chicago Business, Andrew Schroedter, 10/26/09
"... says Gail Lissner, a vice-president at Appraisal Research Counselors..."
It was typical of many developers during the tail end of the housing boom to offer an iPod, flatscreen TV or an even bigger goodie to lure buyers into new townhouses or condominiums. Today, those types of incentives are largely a thing of the past — much like the boom itself. But even in a down market, developers need to find ways to drum up interest in their projects. So what are they doing to woo buyers now that reality has set in? "Price cuts are the new incentive," says Gail Lissner, a vice-president at Appraisal Research Counselors, a Chicago-based real estate consulting firm. "Nothing speaks louder than cash. That's where the market is at." ...
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Real estate on the brink: reviving the faith
Crain's Chicago Business, Andrew Schroedter, 10/26/09
"... according to data from Appraisal Research Counselors."
Susan Osada often wonders what she'd do if she had to sell her condo, part of the 154-unit Buffalo Grove Condominiums complex in the northwest suburb, anytime soon. Less than a year after she paid $141,500 for her two-bedroom unit, one of only eight people who bought a condo in the converted apartment building, Harris Bank filed a foreclosure lawsuit against the developer. The property, at 70 S. Buffalo Grove Road, is now in receivership....
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Obama Presidential-Library Talk Revs Up Chicago’s Nobel Factory
Bloomberg News, John McCormick, 10/26/09
"... said Jim Kutill, a vice president at Appraisal Research Counselors..."
President Barack Obama could bring another Nobel Prize to the University of Chicago. The school a few blocks from Obama’s family home boasts more than 80 Nobel winners with ties to the campus, where he, his wife and some top advisers worked. Now a recruitment effort is percolating to have the university host the presidential library of the 2009 Peace Prize recipient. An administration official said the White House has been approached several times by University of Chicago officials. The administration has not engaged on the topic because it is too soon. The head of the University of Chicago said he’s studying the benefits of having a presidential archive and museum associated with the campus....
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More condos on the block in South Loop
Chicago Tribune, Mary Ellen Podmolik, 10/21/09
"... said Gail Lissner, vice president at Appraisal Research Counselors."
The developer of Michigan Avenue Tower II on Wednesday will announce plans to auction 40 of the remaining 97 units in the 257-unit building at 1400 S. Michigan Ave. on Nov. 15, in the hope of sparking new interest and more realistic prices in the South Loop. The project is the second high-rise South Loop condo building to go to auction this year, illustrating the continued glut of housing available there. It's also the second auction of a South Loop property set for Nov. 15.Earlier this month, Sheldon Good & Co. announced plans to auction 20 units on the same day for Motor Row Lofts, a 52-unit loft redevelopment at 2303 S. Michigan Ave. Developers this year have delivered 1,538 condo units to the neighborhood, according to Appraisal Research Counselors....
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San Francisco lawyer buys Naperville apartments
Crain's Chicago Business, Alby Gallun, 10/7/09
"... says Appraisal Research Vice-president Ron DeVries"
A San Francisco lawyer and newcomer to Chicago real estate has paid $24.6 million for a 320-unit apartment complex in west suburban Naperville, another sign of a slow but steady rebound in the multifamily investment market. Peter Fazio acquired Autumn Run apartments from Denverbased Apartment Investment & Management Co., assuming two loans from Freddie Mac totaling $18 million in the transaction, according to documents filed with the DuPage County Recorder....
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Easy condo credit makes a comeback
Crain's Chicago Business, Alby Gallun, 10/5/09
"... according to Appraisal Research Counselors..."
It's a lot tougher to get a mortgage for a new condo purchase these days, but at some projects, it seems like 2005 all over again. MB Financial Inc. is offering enticing loan deals at several local condominium developments, including ultra-low interest rates and 5% down payments for buyers who don't even plan to live in the units they're purchasing...
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Price Cutting Eases Condo Glut
UPI - United Press International, 9/28/09
"... according to the Downtown Chicago Residential Benchmark Report by Appraisal Research Counselors."
The glut of unsold and foreclosed condos that paralyzed resort and urban markets two years ago has significantly eased in wake of price-cutting and discounting in a number of markets, signaling that the end of the bargain era is in sight and stable markets are on their way. Nationally, price cutting has lowered the condominium median price in the second quarter 19.6 percent from a year ago and sales are 10.1 percent higher than the 563,000 units sold in August 2008. The national median existing condo price was $178,800 in July 2009, according to NAR. In almost every major condo market in the country, lower prices, low rates, the first-time buyer tax credit and available financing are draining down inventories as buyers snap up steals. New construction has slowed to a near stand still and discounts are clearing out the backlog of distress sales....
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Streeterville apartment tower on the market
Crain's Chicago Business, Alby Gallun, 9/15/09
"... according to a recent report by Appraisal Research Counselors..."
A 480-unit apartment tower in Streeterville is up for sale, a move that could awaken the downtown multifamily investment market from a two-year slumber. Northwestern Mutual Life Insurance Co. has hired the Chicago office of Holliday Fenoglio Fowler L.P. to sell Cityfront Place, a 39-story building at 400 N. McClurg Court, according to a marketing brochure obtained by Crain?s. Given the lack of recent comparable sales, it?s difficult to guess what Cityfront would fetch in a transaction. The last time a big downtown apartment building changed hands was in August 2007, when the Streeter, a 481-unit tower at 345 E. Ohio St., sold for $210 million and One Superior Place, an 809-unit building at 1 Superior St., sold for $217.6 million....
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Chicago condos: Residents of historic buildings like living in the past
Chicago Tribune, Pamela Dittmer McKuen, 9/13/09
"... said Gail Lissner, vice president at Appraisal Research Counselors...."
From Daily News condos to Wheaton's Courthouse Square, buildings offer character - Jackie Schwartz's two-bedroom condo in the West Loop came with a storied past -- literally. The century-old brick building was a garage, first for horses and then for trucks, for the nowdefunct Chicago Daily News. In the early 2000s, the building was refurbished and expanded to become the 92-unit Daily News Condominium Association. "I'm in the original part," Schwartz said of the unit she bought four years ago. "It has character and charm and super-high terra cotta ceilings. When I go into some of the new buildings or new conversions, they seem so cookie-cutter." Over the past decade or so, dozens of historic buildings in the Chicago area have gained new life as condominiums. Among them are offices, factories, stores, warehouses and at least one courthouse. They are prominent for varied reasons, perhaps the architect or events that transpired there. Modern-day transformation results in unusual homes, and maybe a swanky address. "Each building is unique," said Gail Lissner, vice president for condominium development at Appraisal Research Counselors in Chicago. "They definitely appeal to people who are looking for character and cachet." Built in 1924, the 30-story neo-classical Metropolitan Tower, 310 S. Michigan Ave...
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Apartment occupancy ticks up in suburbs
Crain's Chicago Business, Alby Gallun, 9/8/09
"... says Appraisal Research Vice-president Ron DeVries."
After enduring a prolonged decline in the suburban apartment market, landlords got a breather in the second quarter. The suburban occupancy rate rose to 91.7% in the quarter, up from 91.3% in the first, according to a report by Appraisal Research Counselors, a Chicago-based real estate consulting firm. It was the first quarter-over-quarter occupancy gain in two years, though the rate is still down from 93.1% a year earlier. The report is an encouraging sign for suburban landlords, who have struggled to fill their apartments amid mounting joblessness. Demand for apartments rises and falls with the job market, with many renters doubling up or moving in with their parents when jobs are scarce. ?It looks like maybe we?ve reached a trough in the market,? says Appraisal Research Vice-president Ron DeVries. ?I think the market?s just going to kind of stay at this level for a while until we see an uptick in the job market.? Suburban apartment rents fell in the quarter, but at a slower rate. The median net effective rent, which includes concessions like free rent, inched lower, to $1.06 a square foot, from $1.07 in the first quarter, according to Appraisal Research. The median effective rent was still 6.3% below its year-ago level and is about where it was three years ago....
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Balcor band reunites
Crain's Chicago Business, Andrew Schroedter and Eddie Baeb, 8/24/09
"... source: Appraisal Research Counselors."
Three titans of Chicago's commercial real estate scene in the 1980s, including Chicago White Sox and Bulls Chairman Jerry Reinsdorf, are teaming up again ? this time to buy busted condominium deals. Mr. Reinsdorf and his longtime business partners, Robert Judelson and Thomas Meador, sat out the recent boom but have been lured back by the prospect of buying on the cheap. "We knew there were opportunities to make money," says Mr. Judelson, 70, a co-founder of Chicago investment firm JMB Realty Corp., who left when the firm was just four years old in 1973 to form Balcor Co. with Mr. Reinsdorf. With scads of failing condo projects leaving developers unable to pay off or refinance debt, many expect opportunities to be plentiful. But while would-be vultures are circling, the old Balcor trio is among the few to have closed a deal. Their connections, experience and deep pockets could be an advantage as they hunt for more properties, from undeveloped subdivisions to apartment buildings. "These guys have made a lot of money over the years," says Judd Malkin, chairman of JMB and an investor in the new venture. The firm, Northbrook-based Michigan Avenue Real Estate Investors, has commitments for half of its fundraising goal of $50 million, which the partners say will give them the leverage to buy up to $200 million in distressed residential properties. The partners' most recent transaction illustrates how ripe the opportunities are. Earlier this month, they paid about $9 million for 157 unsold units in a failing apartment-to-condo conversion at 21 Kristin Drive in Schaumburg....
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Apartment owner gets $50 million in refinancing loans
Crain's Chicago Business, Samantha Sleevi, 8/24/09
"... says Ron DeVries, vice president at Appraisal Research Counselors..."
A low-profile Chicago apartment building owner has refinanced an 11-property portfolio that stretches from Hyde Park to Evanston with two new loans totaling $50 million. Ventures managed by Stuart Handler, CEO of Chicago-based TLC Management Co., took out a $24.7-million loan from Capmark Finance Inc. on four of the properties and a $25.3-million loan from Northern Trust Co. on the remaining seven apartment buildings, according to mortgage records filed with the Cook County Recorder of Deeds. The new mortgages replace a $43.6-million loan issued to Mr. Handler?s ventures in 2004 by Minneapolis-based Northmarq Capital Inc....
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Downtown apartment rents, occupancies rise
Crain's Chicago Business, Alby Gallun, 8/24/09
"... says Appraisal Research Vice-president Ron DeVries."
It?s the worst of times for many real estate investors, but downtown apartment landlords can?t complain about much. Rents and occupancies at top-tier downtown apartment buildings rose for a second straight quarter, bucking the downward trend of the broader real estate market, which has been battered by the recession and credit crisis. Leery of the lousy condominium market and possibly uncertain about their own economic futures, many downtown residents are choosing to rent rather than buy, boosting demand for apartments. The average effective rent at Class A downtown buildings rose to $2.17 a square foot in the second quarter, up 2.4% from the first quarter, according to a report by Appraisal Research Counselors, a Chicago-based real estate consulting firm. Effective rents include concessions such as free rent. While that?s still down 4.8% from the year-ago period, it?s a positive sign for an apartment market that usually takes a hit during recessions. ?All things considered, it?s not a terrible place to be right now,? says Appraisal Research Vice-President Ron DeVries. The average Class A occupancy also rose for the second consecutive quarter, to 93.4%, up from 90.9% in the first quarter and 91.6% in the year-ago period. The numbers would be even stronger if it weren?t for all the new apartment buildings on the market. Developers have built 2,098 apartments downtown since early 2008, and the so-called shadow rental market is growing as more condo owners, unable to sell their units, rent them out instead....
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Downtown home sales jump compared with first quarter
Crain's Chicago Business, Thomas A. Corfman, 8/17/09
"... says Gail Lissner, a vice-president with Appraisal Research."
Sales of new homes in the downtown market jumped up to 313 units during the second quarter, compared to a meager 55 in the first quarter, a step in what is likely to be a long, punishing recovery. Although the second-quarter results are a hopeful sign, sales were still down 35% compared to the 484 sales recorded during the second quarter of 2008, according to the Downtown Chicago Residential Benchmark Report by real estate consulting firm Appraisal Research Counselors....
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South Loop condo project switches to apartments
Crain's Chicago Business, Alby Gallun, 8/7/09
"... according to a recent report by Appraisal Research Counselors..."
With the South Loop condominium market in a severe slump, Centrum Properties Inc. has decided to convert a new 342-unit condo project on Roosevelt Road into apartments, a move the developer and its lenders had been considering for months. Buyers had signed contracts for about 60%, or 205, of the condos in the Lofts at Roosevelt Collection, but Centrum was worried that many buyers would back out of their contracts at closing time, largely because they couldn?t secure loans to finance their purchases, says Centrum Partner Sol Barket. ?It?s still incredibly difficult? to get a mortgage, he says. ?A majority of people could not or did not want to close.? As a result, Centrum now will cancel the purchase contracts and give buyers their earnest money back. The Chicago-based developer?s decision to go rental had been anticipated as lending markets tightened and unsold condos continued to flood the South Loop market. At the end of the first quarter, South Loop developers were sitting on nearly 1,500 unsold condos, according to a report by Appraisal Research Counselors, a Chicago-based real estate consulting firm....
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Lofts at Roosevelt condos to be converted into rentals
Chicago Tribune, Mary Ellen Podmolik, 8/7/09
"... said Gail Lissner, a vice president at Appraisal Research Counselors."
The Lofts at Roosevelt Collection, a 342-unit development originally slated as condos, will be converted into rental apartments, the developer said Friday. Centrum Properties, Inc., bowing to the continued pressure in the condo market and particularly in the South Loop, said apartments in the building at Clark and Roosevelt roads would be available Sept. 1....
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Sam?s Wines closing South Loop shop
Crain's Chicago Business, Staff, 8/3/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
Sam's Wines & Spirits Inc. blames the moribund real estate market for the failure of its South Loop location and will shutter the shop this weekend. The Chicago-based liquor retailer opened the store in November 2007 at Roosevelt Road and Wabash Avenue as real estate development south of downtown was peaking. But as the housing market has sputtered, Sam?s has reconsidered its presence in the once-hot neighborhood. ?Due to the slower than anticipated development of the South Loop area, we were forced to cease operations at that location,? Sam?s CEO Richard Di Stasio said in a news release. Since the beginning of 2008, condo developers have canceled 10 projects in the South Loop accounting for 2,027 units, according to Chicago-based consulting firm Appraisal Research Counselors. While that's ultimately good for the condo market, keeping a lid on supply, it's bad news for retailers that were counting on rapid residential growth to provide lots of customers for their stores. The South Loop Sam?s is set to close Sunday, the company said in a statement.
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More failing to close on downtown condos
Chicago Sun Times, David Roeder, 7/29/09
"... said Gail Lissner, vice president of Appraisal Research Counselors."
'Walkaway' rate of potential buyers rising, but one bellwether says business brisk - There are new signs of trouble and hope for the downtown Chicago condo market. The trouble comes in a higher rate of buyers who don't show up to close the sale. Two industry consultants said that in some buildings, the socalled "walkaway" rate has hit 40 percent, compared with the roughly 25 percent that was common earlier this year. "For anybody who's delivering today, this is their biggest challenge," said Gail Lissner, vice president of Appraisal Research Counselors. The exact rate of cancellations has been hard to pin down; developers don't boast about it and many will extend contracts on the chance the buyers will close eventually. The consultants won't name projects most affected by walkaways. Others said they include a tower at 235 W. Van Buren and a building called R+D659 at 659 W. Randolph. Both have gone through several price reductions. Their developers could not be reached. Less vulnerable to walkaways are high-end multibuilding sites such as Lakeshore East downtown and Central Station south of the Loop. Gerald Fogelson, chief executive of Central Station developer Fogelson Cos., said his walkaway rate is about 15 percent....
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Streeterville condo conversion faces foreclosure
Crain's Chicago Business, Alby Gallun, 7/29/09
"... according to Appraisal Research Counselors..."
PrivateBank & Trust Co. has filed to foreclose on a slow-selling condominium conversion project in Streeterville less than two years after refinancing the 219-unit development. The bank alleges that the developer of the project at 222 E. Pearson St., an entity formed by Ganesan Visvabharathy, missed its February loan payment and failed to pay off the $6.8-million loan balance when it came due in March. Known as Pearson on the Park, the 28-story tower is the latest major casualty in a downtown condo market struggling with a glut of unsold units and the worst recession since the early 1980s. As with many downtown condo projects, sales at Pearson on the Park have slowed to a crawl in recent months. Buyers have closed on 176 condos, or 80% of the total, and just three units this year, property records show. Attempts to reach Mr. Visvabharathy, who has a Ph.D. and is better known as Dr. Vish, were unsuccessful. The developer paid $46.6 million for the building in July 2005, when it was an apartment building. He borrowed $52.5 million from Hypo Real Estate Capital Corp. and $7.5 million from American Mortgage Acceptance Corp. to finance the purchase and his plan to convert the apartments to condos....
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Default alleged on suburban condo conversion
Crain's Chicago Business, Andrew Schroedter, 7/16/09
"... according to a report on the suburban residential market by Appraisal Research Counselors."
Harris Bank has filed a foreclosure lawsuit to collect a past-due $9.84-million loan on a 154-unit apartment complex in Buffalo Grove, another sign of how the suburban condo conversion market has come to a standstill. A venture affiliated with little-known Barrington Hills investor Marcin Malarz paid $13.25 million in February 2008 for the property, now called Buffalo Creek Condominiums, according to property records. At the time, Mr. Malarz was an active buyer of suburban apartment properties....
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Squeeze in lending rules choking condo market
Chicago Tribune, Mary Ellen Podmolik, 7/12/09
"... according to data from Appraisal Research Counselors."
More developers seeking FHA approval for easier mortgages - The glut of unsold condominiums in Chicago has caused developers to offer upgraded appliances, special financing packages and, in one extreme case, $100,000 price reductions. There's been little condo buildings can do, though, to sidestep dramatically tightening guidelines on mortgages that governmentcontrolled companies will back. Those restrictions are crimping a local condo market burdened with an oversupply of inventory at the same time consumers are dealing with the Chicago area's 10.7 percent jobless rate. "It is not killing the market, but it is definitely hurting it," said Michael Golden, co-founder of @Properties, of the stricter requirements. In March, sales of Chicago condo units listed with Midwest Real Estate Data LLC's multiple listing service were down 41 percent from a year ago. In April, the year-over-year decline was 55 percent, and in May it was 56 percent. Yet according to the Chicago Association of Realtors, condos have experienced less price erosion than single-family homes....
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The Second City Is Becoming Second-Home City
New York Times, Susan Saulny, 7/9/09
"... According to a report released in April by Appraisal Research Counselors..."
Celebrating their wedding anniversary in April at the Palmer House Hilton in downtown Chicago, where they were engaged 10 years ago, Chris and Kristine Warnes knew they would be taking home beautiful memories of a luxurious weekend. They had no idea that they would be taking home a new condominium, too ? a pied-àterre with views of the deep blue of Lake Michigan and the bustling street life of the Magnificent Mile along Michigan Avenue. About a week after they returned home to the suburb of Naperville, Ill., their offer of $290,000 for a 900- square-foot loft in a former Montgomery Ward building, now called Six North Michigan, was accepted. The unit, listed at $325,000, has Italian kitchen cabinetry with granite and tile accents throughout, and access to building amenities like a theater, a gym and a heated indoor garage....
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Condo developer Roszak files for personal bankruptcy
Crain's Chicago Business, Alby Gallun, 7/1/09
"...according to Appraisal Research Counselors..."
Evanston condominium developer Thomas Roszak has filed for bankruptcy protection after struggling to pay off his debts during the worst housing market in decades. Known for his projects in Evanston and downtown Chicago, Mr. Roszak said he has assets of $1 million to $10 million and liabilities of $50 million to $100 million, according to a personal bankruptcy petition filed June 4 in U.S. Bankruptcy Court in Chicago. Seven companies Mr. Roszak co-owns, including his architecture and construction firm, Roszak/ADC LLC, filed Chapter 7 petitions, which typically means the companies will be liquidated rather than re-organized....
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With Michael Reese deal, Chicago will commit money to 2016 Olympics bid
Chicago Tribune, Kathy Bergen, 6/28/09
"... said Gail Lissner, vice president at Appraisal Research Counselors."
City prepares to close on purchase of hospital site for Olympic Village, but questions remain. - Chicago taxpayers will be locked into the city's first financial commitment related to its 2016 Olympic bid on Tuesday if the scheduled closing on the $86 million purchase of the Michael Reese Hospital site goes as planned. This foray into large-scale real estate development comes three months before the host-city selection. The International Olympic Committee will choose between Chicago, Madrid, Rio de Janeiro and Tokyo on Oct. 2....
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J. P. Morgan fund to sell suburban apartments at a loss
Crain's Chicago Business, Alby Gallun, 6/24/09
"... says Ron DeVries, vice-president at Appraisal Research."
In another sign of the depressed market for investment property, a J. P. Morgan fund has agreed to sell a 206-unit apartment complex in northwest suburban Lake Zurich for about $19 million, 37% less than the fund paid for it in 2006. Highland Park investor James Glikin confirms he has agreed to buy the Landings of Lake Zurich and says he expects to close on the acquisition next week. It would be one of the few major local apartment building sales in the past year, illustrating just how much property values have fallen since the credit markets seized up and the economy fell into recession. Indeed, the J. P. Morgan Strategic Property Fund has picked a bad time to sell the property at 25 N. Beusching Road, which it acquired for $30.1 million in March 2006, as the market was nearing its peak. It?s unclear why J.P. Morgan is selling now, but many large real estate funds have put properties on the market in the past several months to raise cash to pay off investors seeking their money back....
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Evanston apartment tower hit with foreclosure suit
Crain's Chicago Business, Samantha Sleevi and Thomas A. Corfman, 6/24/09
"... according to a report by Chicago-based Appraisal Research Counselors."
A pioneering effort to develop a 221-unit apartment building on the scruffy border of Evanston and Rogers Park has been whacked by a $38.2-million foreclosure lawsuit. PNC Bank alleges that a venture that includes a sister company, investment giant BlackRock Inc., and the estate of Schaumburg developer William J. Walsh, who died last year, failed to make the April interest payment on a construction loan for Howard Street Station, 413-421 Howard St. in Evanston. The 17-story building is next to a CTA rail yard on a stretch of Howard Street that has undergone a bit of a revival in recent years....
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Foreclosure suit hits Naperville apartment complex
Crain's Chicago Business, Alby Gallun, 6/18/09
"... according to a report by Chicago-based Appraisal Research Counselors."
Metropolitan Life Insurance Co. has filed a foreclosure suit against the owner of McDowell Place, a 400-unit apartment complex in west suburban Naperville. The owner, a fund managed by New York-based investment manager BlackRock Inc., failed to pay back a $33-million loan on the property after it came due May 1, according to a complaint filed last month in DuPage County Circuit Court. BlackRock used the MetLife loan to finance its $47.5- million acquisition of the property at 1647 Westminster Drive in 2006...
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South Loop buildings half sold
Chicago Journal, Micah Maidenberg, 6/15/09
"... according to Appraisal Research Counselors..."
Crain's has published a fascinating map detailing how sales are going at eight South Loop residential developments that are expected to open this year. Though the first quarter of 2009, according to Appraisal Research Counselors, half of the 1,880 condos in the neighborhood coming online this year remain unsold (hat tip to Sloopin for the map link). Seeing the stats about all the unsold units - 55 percent of units under contract at Roosevelt Collection, 45 percent under contract at Museum Park Place South and so forth - reminded me of a story about how people who had bought into New York City's famous Plaza Hotel were not moving into the building very quickly....
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Apartment glut looms
Crain's Chicago Business, Eddie Baeb and Alby Gallun, 6/15/09
"... says Gail Lissner, a vice-president at Appraisal Research Counselors..."
The developer of one of the South Loop's most ambitious residential projects is preparing to tear up contracts with condominium buyers and convert the property into an apartment building. Such a switch by the 342-unit Lofts at Roosevelt Collection would portend a larger shift as a downtown condo glut turns into an apartment glut....
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Suburban apartment deal biggest in over a year
Crain's Chicago Business, Alby Gallun, 6/10/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
A New Jersey apartment investor is paying about $60 million for a 592-unit property in Buffalo Grove, the largest apartment sale in more than a year amid a lethargic Chicagoarea investment market. Penobscot Corp. is expected to close this month on Amli at Chevy Chase, an apartment complex at 1701 Johnson Drive developed in 1988, say sources familiar with the transaction. The Teaneck, N.J.-based firm, which owns six apartment complexes in the Chicago suburbs, is acquiring the Buffalo Grove property from Chicago-based apartment investor Amli Residential....
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Suburban apartment market falls as job losses mount
Crain's Chicago Business, Alby Gallun, 6/1/09
"... says Appraisal Research Vice-president Ron DeVries."
The suburban apartment market slid further in the first quarter, and it will keep sliding as long as local companies keep cutting jobs. The suburban occupancy rate fell to 91.3% in the first quarter, down from 92.1% in the fourth and 93.3% in first-quarter 2008, according to a report by Chicago-based real estate consulting firm Appraisal Research Counselors. The median net effective rent, which includes concessions like free rent, dropped to $1.07 a square foot, down 2.7% from $1.10 in the fourth quarter, the report says. The median rent fell 6.1% from firstquarter 2008, when rents peaked. The bad job market is depressing demand for apartments, as some renters who might otherwise live alone try to save money by doubling up or even moving back in with their parents. Local employers cut 157,600 jobs from March 2008 to March 2009, more than the roughly 135,000 jobs shed during the worst 12-month period in the last recession, the report says. With the job losses expected to continue, rents will keep dropping in 2009, says Appraisal Research Vice-president Ron DeVries....
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Condo sales crawling - 55 new units under contract in first quarter
Chicago Journal, Ian Fullerton, 5/27/09
"Gail Lissner, vice president of Appraisal Research, said..."
Sales on new downtown condos crawled out of the gate in the first three months of 2009, according to a recent market study. But while the potential for closing a deal may appear dismal these days, some real estate agents are hoping the number forecast a buyer?s market in the coming months. The report, conducted by Appraisal Research Counselors, a Chicago-based assessment firm, says that, of the more than 3,800 units under construction or complete in the Loop, only 55 were under contract from January to the beginning of April....
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Marovitz/Cataldo project hit with foreclosure suit
Crain's Chicago Business, Samantha Sleevi, 5/27/09
"... according to a recent report by Appraisal Research Counselors..."
Prominent developers William Marovitz and Constantine "Bud" Cataldo have become entangled in the collapse of the condo boom, with a lender filing an $8.4-million foreclosure lawsuit on a 27-unit River North loft project they proposed. Mutual Bank alleges that a venture owned by the two men defaulted in January on an $8.15-million loan on a vintage fivestory warehouse building at 660 N. Kingsbury St., which they had proposed converting into loft condominiums, called the Park Kingsbury. The duo frequently team up with each other and other developers on projects in the trendy neighborhood north of the Chicago River and west of North Michigan Avenue. Mr. Marovitz, president of Chicago-based Marovitz Group, and Mr. Cataldo, CEO of Schaumburg-based Hostmark Hospitality Group Inc., did not return calls requesting comment. One of their attorneys, Scott A. Sinar of Chicago law firm Noble Law Group LLC, declined to comment, saying he hadn't seen the foreclosure complaint....
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Appraisal Research: 42 percent of new downtown condos remain unsold
New Homes Magazine, Joseph Askins, 5/20/09
"... according to the latest Appraisal Research Counselors Downtown Benchmark Report."
Of the 5,389 downtown condominiums under construction and set for delivery between this year and 2011, just 3,139, or 58 percent, are currently under contract, according to the latest Appraisal Research Counselors Downtown Benchmark Report....
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Downtown Chicago condo market dismal
Chicago Tribune, Mary Ellen Podmolik, 5/20/09
"... said the report by Appraisal Research Counselors."
Canceled contracts, no sales plague new developments; prices dropping for buyers - More than half of new condo developments in downtown Chicago either had sales canceled or didn't make a sale during the first quarter, according to a new research report. As a result, only 55 units were removed from a crowded marketplace, leaving 1,590 units completed and awaiting a buyer and an additional 2,250 units under construction, unsold and expected to be completed this year, said the report by Appraisal Research Counselors....
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Builders lawyer up
Crain's Chicago Business, Thomas A. Corfman and Samantha Sleevi, 5/18/09
"... says Gail Lissner, an Appraisal Research vice-president."
As cancellations rise to more than a quarter of all new condo contracts, two veteran developers are suing home buyers who try to walk away, adding a rancorous new dimension to the housing meltdown. Ventures controlled by Ronald Shipka Sr. and Gerald Fogelson have taken the unprecedented step of filing lawsuits against about 100 home buyers who didn't close on contracts on condominiums in the Museum Park project overlooking the south end of Grant Park. Their suits come as developers on average are seeing about 25% of their sales fall apart, up from 10% to 15% last spring, according to a report by Appraisal Research Counselors....
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Rents tick up at downtown apartments, but glut a worry
Crain's Chicago Business, Alby Gallun, 5/18/09
"... says Appraisal Research Vice-president Ron DeVries."
The downtown apartment market stopped sliding in the first quarter, but a large supply of new units continues to make life difficult for landlords. After falling for three quarters, the average effective rent at upscale, Class A downtown buildings inched higher in the first three months of the year, to $2.12 a square foot, according to a report by Appraisal Research Counselors, a Chicago-based real estate consulting firm. That?s up from $2.11 in fourth-quarter 2008, but still down 7.4% from $2.29 in the prior-year period. The average Class A occupancy also rose slightly, to 90.9% from 90.6% in the fourth quarter, according to the report. The occupancy rate was 91.9% in first-quarter 2008....
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Quote of the day: Lawyering up
New Homes Magazine, 5/18/09
"... look at the latest Appraisal Research Counselors Downtown Benchmark Report."
"These cancellations were almost 100% out of fear ? fear that they were going to lose their jobs or that they were paying too high a price." - Gerald Fogelson, chairman and CEO of Fogelson Properties, on Museum Park's 15-percent contract fallout rate. Fogelson and The Enterprise Companies have filed lawsuits against approximately 100 buyers who didn't close on contracts on condominiums at new Museum Park towers like 1600 Museum Park, Crain's reports. The developers' cases "generally seek recovery of earnest money deposits and half the cost of upgrade," according to the article....
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Foreclosure suit hits Motor Row condo project
Crain's Chicago Business, Samantha Sleevi, 5/11/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
A Missouri lender has filed a $9-million foreclosure suit against a slow-selling condominium project along Motor Row on Chicago?s South Side. Developer Paul Zucker failed to pay back a construction loan for the Motor Row Lofts when it came due last October, according to a lawsuit filed last month by St. Louis-based First Bank of Missouri. Mr. Zucker borrowed $13.1 million from the bank in 2006 to finance the conversion of three landmark buildings at 2301 S. Michigan Ave. into 51 condos. Mr. Zucker, president of Chicago-based City Real Estate Inc....
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Rental switch doesn't stop North Side foreclosure suit
Crain's Chicago Business, Samantha Sleevi, 5/5/09
"... says Ron DeVries, vice-president at Appraisal Research Counselors..."
Switching from condos to rental wasn't enough to stave off a $5-million foreclosure suit on a 12-unit project on the edge of Lincoln Park by developers Charles Mudd and Steve Golovan. Amcore Bank is seeking to foreclose on the Catalina, 2524 N. Ashland Ave., which was completed last year. The Rockfordbased bank alleges that a venture owned by Messrs. Mudd and Golovan failed to pay off a $5.1-million construction loan when it came due Jan. 29. Both men personally guaranteed the loan, according to the complaint, filed April 24 in Cook County Circuit Court. Developers taking struggling condo projects rental is a growing trend but is just a stopgap measure, says Ron DeVries, vice-president at Appraisal Research Counselors, a Chicago-based real estate research firm. ?It?s basically a Band-Aid to temporarily fix the problem,? he says, adding that developers are waiting and hoping for ?better economic times when they can sell those units.? The rents typically don't generate enough cash flow to pay a mortgage, he says....
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A debt-free, easy feeling for 900 N. Michigan condo developer
Crain's Chicago Business, Andrew Schroedter, 4/14/09
"... says Gail Lissner, vice-president with Chicago-based Appraisal Research Counselors."
While other developers are frantically auctioning off condominium units, Pat Meara has a yoga-like serenity about his luxury residential conversion of former office space at 900 N. Michigan Ave. Despite not having sold a single unit this year, the senior vice-president of JMB Realty Corp. says he has no plans to cut prices, which start at $800 a square foot. After more than three years of marketing, 10 units remain unsold in the 47-unit project in a 66-story building that also houses a Bloomingdale?s-anchored mall and a Four Seasons hotel.
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About-face on housing in the Loop
Crain's Chicago Business, Eddie Baeb, 4/13/09
"... according to research firm Appraisal Research Counselors."
The Daley administration's new plan for downtown aims to curb residential development in the Central and West Loop, a marked shift from the decades-long push for a "24-7" downtown that doesn't go dormant when the workday is done. Part of a draft of the so-called Central Area Action Plan, the changes are a bid to preserve sites for new office towers and avoid some of the clashes that have arisen as residents have poured into downtown. The plan seeks to cluster office buildings at the city's core and near public transit while pushing residential development just outside the so-called Downtown Core Zoning District, bordered roughly by the Chicago River to the north and west, Congress Parkway to the south, and Dearborn Street to the east....
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Developer scraps Franklin Point plans
Crain's Chicago Business, Alby Gallun and Thomas A. Corfman, 4/1/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
An Irish condominium developer has dropped plans for $150-million mixed-use development just four blocks south of the Sears Tower. Chieftain Group recently terminated a contract to buy the development site at the southwest corner of Harrison and Wells streets, says David Crawford, principal at D2 Realty Services Inc., the Chicago-based developer that owns the two-acre property. Limerick, Ireland-based Chieftain last spring agreed to pay nearly $20 million for the parcel, part of an undeveloped eight-acre tract known as Franklin Point....
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More apartments sought for Millennium Park tower
Crain's Chicago Business, Alby Gallun, 4/1/09
"... according to Appraisal Research Counselors..."
A Park Ridge apartment investor that plans to build a 40-story high-rise at the northwest corner of Millennium Park wants to more than double the number of units in the building, to 185. An affiliate of BJB Partners LLC has filed a zoning amendment with the city seeking the change for the tower, which would sit on a tiny parcel at Randolph Street and Michigan Avenue formerly occupied by the La Strada restaurant. BJB owns the site along with the 550-apartment Millennium Park Place immediately to the north....
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Living never looked so good for The Peshtigo
New Homes Magazine, Mark Boyer, 3/25/09
"The data speaks for itself" - "...figures obtained from Appraisal Research Counselors..."
"The data speaks for itself," a spokesperson for The Peshtigo told a Crain's reporter who was hunting for a statement in January on the proposed Streeterville high-rise's future. The Crain's item included some figures obtained from Appraisal Research Counselors, showing that just 17 percent of the 358-unit building had been sold by the third quarter of 2008....
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Halted Spire among world's 'Babel' projects
Crain's Chicago Business, 3/23/09
There is a gaping hole where one of the world's tallest buildings is supposed to go up. The planned 150-story Chicago Spire would be 2,000 feet tall if it gets built atop its completed foundation, ranking the tower the tallest in the Western Hemisphere and the sixth-tallest among the world's planned skyscrapers....
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Global recession stalls skyscraper construction
NewsDaily, Andrew Stern, 3/23/09
"... according to Appraisal Research Counselors..."
There is a gaping hole where one of the world's tallest buildings is supposed to go up. The planned 150-story Chicago Spire would be 2,000 feet tall if it gets built atop its completed foundation, ranking the tower the tallest in the Western Hemisphere and the sixth-tallest among the world's planned skyscrapers. The Spire was supposed to be finished by 2012 and the Irish developer staged a global marketing campaign. Buyers snapped up a third of its 1,194 luxury condominiums priced between $750,000 and $40 million. Ty Warner, creator of the Beanie Baby toys, opted for the top-priced penthouse....
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Global recession stalls skyscraper construction
Forbes, Andrew Stern, 3/22/09
"... according to Appraisal Research Counselors..."
There is a gaping hole where one of the world's tallest buildings is supposed to go up. The planned 150-story Chicago Spire would be 2,000 feet tall if it gets built atop its completed foundation, ranking the tower the tallest in the Western Hemisphere and the sixth-tallest among the world's planned skyscrapers. The Spire was supposed to be finished by 2012 and the Irish developer staged a global marketing campaign. Buyers snapped up a third of its 1,194 luxury condominiums priced between $750,000 and $40 million. Ty Warner, creator of the Beanie Baby toys, opted for the top-priced penthouse. But after digging a 76-foot-deep hole and sinking caissons, construction on the twisting Spire -- inspired, its famed architect Santiago Calatrava said, by swirling smoke from a Native American campfire -- was stalled in January by the credit crisis that is stifling construction worldwide. Chicago has long been a showcase for tall towers since the steel-framed skyscraper was invented, its history full of developers whose ambitions sometimes crashed on the rocks of economic slowdowns, said John Norquist, president of non-profit group The Congress for the New Urbanism....
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The Chicago Spire - March 2009 Update
@ Properties, Shelbourne Development, 3/19/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
Dear Friends of The Chicago Spire: Greetings from Shelbourne Development. We wish to take this opportunity to share some recent news about Chicago and provide current information on The Chicago Spire project.
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The Big Chill: Chicago?s Condo Market Is Now on Ice
Chicago Public Radio - NPR (WBEZ 91.5 FM), Ashley Gross, 3/17/09
"... Gail Lissner analyzes downtown real estate for Appraisal Research Counselors. She says..."
One hundred years ago, Daniel Burnham laid out plans to make Chicago a ?Paris on the Prairie.? He envisioned a downtown full of grand civic buildings and lush parks. Fast forward a century and he might be surprised to see the city center crammed with residential highrises - and those parks full of neighbors walking their dogs. It?s part of a contemporary vision to create sustainable living downtown. But now vacancy rates are soaring. There are 6,000 unsold homes downtown. And that?s left many people questioning whether that vision is sound. Tucked behind a wall of skyscrapers just northeast of Millennium Park is a little urban oasis. It?s a six-acre park with a kids' playground and a dog run ? and it?s part of a huge new development called Lakeshore East....
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?Impact of 2009 Economy on Senior Care Facilities
Appraisal Research Counselors, Mike Cooper, 3/16/09
"... according to Mike Cooper, VP & Director of Senior Care..."
The U.S. financial system has been under significant stress for more than a year. Chicago area employment has been falling since January, led by losses in construction, manufacturing and financial services. The housing market has yet to stabilize, and every segment of the commercial real estate market is weakening. Tourist inflows are declining. Deteriorating local fiscal conditions are leading to cutbacks. So the question we address here is: What is the economic impact on senior care facilities? Michael L. Cooper, Vice President & Director of Senior Care, addresses this question....
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Sold! More Chicago developers auctioning empty condo units
Northwestern University - Medill News Service, Kate Shellnutt, 3/10/09
"... according to Chicago-based Appraisal Research Counselors."
Sellers are growing more desperate to move thousands of unsold units in condominium buildings. In Chicago, that means turning to auctions as an alternative to sell empty units concentrated in large-scale high-rises, but in the suburbs?where unsold condos are dispersed among smaller buildings?auctions are less popular. The development and conversion boom boosted downtown condo sales to an annual peak of more than 8,000 in 2005. That figure cratered 93 percent over the past three years, with fewer than 600 condos sold in 2008, according to Chicago-based Appraisal Research Counselors....
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Job losses hurt suburban apartment occupancy, rents
Crain's Chicago Business, Alby Gallun, 3/9/09
"... says Appraisal Research Vice-president Ron DeVries."
Rising unemployment is fueling falling occupancies and rents at suburban apartment buildings. The suburban occupancy rate fell to 92.1% in the fourth quarter of 2008, down from 92.8% in the third quarter and 93.3% in the yearago period, according to Chicago-based Appraisal Research Counselors. It?s the lowest occupancy rate since the real estate consulting firm started tracking the suburban apartment market in 2003. With more landlords offering concessions such as free rent, it has become a tenants? market and will stay that way as long as the economy remains in the dumps. The median net suburban rent, which includes concessions, dropped to $1.10 a square foot, down 2.7% from $1.13 both in the third quarter and the year-earlier period. The net rent peaked at $1.14 in first-quarter 2008. ?Things have clearly weakened,? says Appraisal Research Vicepresident Ron DeVries. ?Concessions are more rampant.?...
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South Loop condos auctioned at big price cuts
Crain's Chicago Business, Thomas A. Corfman, 3/9/09
"... according to a report by Chicago-based Appraisal Research Counselors."
A weekend auction of 45 units in the Vetro condominium project in the South Loop resulted in sales of more than $12 million, at sharply discounted prices. After an aggressive marketing campaign, the 45 units in the 232-unit building sold at an average price of $258 a square foot, or 73% of the average pre-auction asking price of $353 a foot, according to Accelerated Marketing Partners LLC, which conducted the auction, and Chicago-based residential marketing firm Garrison Partners Inc. The sales totaled more than $12.1 million. The Vetro auction gave a jump-start to the 31-story tower at 601 S. Wabash St., completed in late 2007, where sales had been stalled like in the rest of the market....
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Trump, lenders in temporary truce regarding lawsuits
Crain's Chicago Business, Alby Gallun, 3/3/09
"... according to Chicago-based consulting firm Appraisal Research Counselors."
Donald Trump and the lenders on his Chicago skyscraper have agreed to put their legal dispute on hold as the developer wraps up construction of the 92-story tower. Mr. Trump and Deutsche Bank Trust Co. Americas sued each other last fall over a past-due $640-million construction loan on the project. The developer claimed that the financial crisis gave him the legal right not to pay back the loan, while the bank demanded that Mr. Trump honor a $40-million personal guarantee he made on the loan....
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Lawsuits suspended in Trump Tower development
Chicago Tribune, Mary Ellen Podmolik, 3/3/09
"... according to Appraisal Research Counselors."
Donald Trump and Deutsche Bank Trust Cos. Americas shelve suits to try to settle differences - Donald Trump and Deutsche Bank Trust Cos. Americas announced Tuesday that they have temporarily suspended lawsuits filed against each other four months ago over Trump International Hotel and Tower's finances and will try to settle their differences out of court, a move designed to allay concerns of potential buyers who are jittery about the Tower's future in a morose real estate market. "It certainly didn't help," Trump said of the lawsuits. "Now this totally resolves questions in anybody's mind." While the project has seen a recent uptick in sales, both sides agreed that sidelining the lawsuits that generated headlines nationally would assist in marketing the 92-story tower at 401 N. Wabash Ave....
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Trump, lenders in temporary truce on lawsuits
Crain's New York Business, Alby Gallun, 3/3/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
Donald Trump and Deutsche Bank Trust Co. Americas have reached an agreement to suspend litigation over the real estate mogul's Chicago skyscraper. - Donald Trump and the lenders on his Chicago skyscraper have agreed to put their legal dispute on hold as the developer wraps up construction of the 92-story tower. Mr. Trump and Deutsche Bank Trust Co. Americas sued each other last fall over a past-due $640- million construction loan on the project. The developer claimed that the financial crisis gave him the legal right not to pay back the loan, while the bank demanded that Mr. Trump honor a $40-million personal guarantee he made on the loan. But the two sides have reached an agreement ?that provides for the suspension of litigation between the parties as discussions move forward,? according to a news release issued Tuesday...
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Downtown apartment rent falls by most in 7 years
Crain's Chicago Business, Alby Gallun, 2/23/09
"... says Appraisal Research Vice-president Ron DeVries."
Rents at top-tier downtown apartment buildings last year fell the most since 2001 as a development boom and deepening recession gave tenants the upper hand over landlords. Effective rents at Class A downtown buildings fell to $2.11 a square foot in the fourth quarter, down 6.2% from $2.25 in the year-earlier period, according to Appraisal Research Counselors, a Chicago-based real estate consulting firm. It was the first annual drop since 2003 and the biggest decline since 2001, when effective rents slid 7.7%....
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Foreclosure suit hits Mandarin Oriental developer
Crain's Chicago Business, Alby Gallun, 2/18/09
"... according to a recent report by Appraisal Research Counselors..."
A New York-based lender has filed a foreclosure suit against the developer of the proposed Mandarin Oriental tower just north of Millennium Park, a 74-story project with a lot of sizzle but not enough sales. An affiliate of iStar Financial Inc. filed to foreclose on the development site at the northwest corner of Stetson Avenue and Lake Street, according to a document filed earlier this month with the Cook County Recorder. The project?s developer, a group that includes former construction executive Gerard Kenny, had owed iStar as much as $43 million more than a year ago, but the filing did not disclose the balance on the loan, which was used to finance the acquisition of the property and pre-development costs....
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The woes of condos - Downtown sales sink to negative 250 units in fourth quarter
Chicago Sun Times, David Roeder, 2/18/09
"Gail Lissner, vice president at Appraisal Research, said..."
It sounds like a bad joke, but it's true: The downtown residential market is so awful, it's shrinking. Last year, the number of new condominiums slated downtown declined by almost 3,000 units. And in the fourth quarter, the number of residential sales was a negative 250 units. How can that be? The numbers are drawn from an annual survey that Appraisal Research Counselors reported Tuesday. They are the worst results anybody can recall for the reports, which the company has compiled in quarterly updates since 1997. Gail Lissner, vice president at Appraisal Research, said the residential inventory fell as developers scrapped projects they would have delivered in a couple of years. The sales figures went negative in late 2008, she said, because buyers began canceling contracts and some developers were caught fudging sales data from earlier in the year. Overall, 592 condos sold in central Chicago during 2008, the survey found. The result was abysmal for a market that has generated annual sales of 4,000 to 8,000 units....
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Downtown condo sales show net loss in 4Q
Crain's Chicago Business, Alby Gallun, 2/17/09
"... says Appraisal Research Vice-president Gail Lissner."
As if finding new buyers in today?s lousy condominium market wasn?t hard enough, a growing number of downtown developers face an even tougher task: holding onto the ones they already have. Downtown condo developers lost a net 253 sales in the fourth quarter, mainly because buyers canceling sales contracts for new units outnumbered those signing them, according to a new report by Appraisal Research Counselors. It was the worst quarter for downtown developers since the Chicago-based consulting firm began tracking the local market in the early 1990s. Amid the turmoil in the financial markets, ?people were just frozen in their tracks? in the fourth quarter, says Appraisal Research Vicepresident Gail Lissner. Making matters worse, a growing number of buyers who signed contracts for new condos during the boom a few years ago are backing out at closing time, either because they can?t get a mortgage or are skittish about buying in such a depressed market. Investors who expected to flip their units for a quick profit are especially likely to walk away, often giving up deposits in the tens of thousand of dollars. Factoring in canceled contracts, downtown developers sold just 644 condos last year, down 83% from 3,724 in 2007, according to Appraisal Research. It was the third straight year that sales have fallen since peaking at 8,162 units in 2005....
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The Last Word
Today's Chicago Woman, Marla Cichowski, 2/5/09
"... Chicago?s most trusted real estate expert, Gail Lissner, vice president of Appraisal Research Counselors.
TCW Turns to Gail Lissner, Vice President of Appraisal Research Counselors, for Fresh Perspective on the Chicago Housing Market. The housing market is taking a major hit on all sides in our economic freefall. Property values are falling and mortgage rates are at a 37- year low. Could it be a more appropriate time to revisit Chicago?s most trusted real estate expert, Gail Lissner, vice president of Appraisal Research Counselors?...
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Big foreclosure suit hits suburban apartment complex
Crain's Chicago Business, Alby Gallun, 2/4/09
"... says Ron DeVries, vice president at Appraisal Research Counselors..."
The owner of a 300-unit apartment complex in Schaumburg has been hit with a $21.6-million foreclosure lawsuit, one of the largest foreclosure cases involving a suburban apartment property since the early 1990s. The owner of the Grand Vista of Schaumburg, a developer with operations in India and the United States, stopped making monthly mortgage payments last October, according to the suit. The complaint was filed by Miami Beach, Fla.-based LNR Partners Inc., a special servicer for holders of mortgage securities backed by the Grand Vista loan and others....
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Two Chicago Towers Fall Victim to Scarce Financing
New York Times, Robert Sharoff, 2/4/09
"... said Gail Lissner, vice president of Chicago-based Appraisal Research Counselors..."
Back in 2006, at the height of the real estate boom, two projects here stood out as harbingers of a bright future for residential development. The first and most significant was the Spire, a twisting lakefront condominium tower designed by the renowned Spanish architect Santiago Calatrava. At 150 stories, it was to be the tallest building in North America. (The current tallest, the Sears Tower, is also in Chicago.) The developer of the Spire is Garrett Kelleher of Shelbourne Development, a firm with offices in Chicago and Dublin as well as several other cities. The second project was Waterview Tower, a 90-story mixed-use hotel and condominium building in the Loop, the central business district. It also was to be among the 10 tallest buildings in the city. The developer is Teng & Associates, a local firm....
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Price drop is natural correction
Chicago Sun Times, Bill Cunniff, 1/30/09
"... said Gail L. Lissner, vice president of Appraisal Research Counselors."
For most of the country, the decline in housing prices is a correction, a real estate industry veteran said. Prices were overinflated during the boom, said Lawrence Yun, chief economist for the National Association of Realtors. In some areas, home prices doubled over the course of one year. "In 2006, people who had trouble borrowing $20 from their Uncle Bob could borrow a home loan," he said. "Prices have come down to justifiable levels." Yun spoke to hundreds of real estate professionals at the recent "2009 Regional Economic Forecast," at the Palmer House Hilton. The event was sponsored by the Realtor Associations of Chicagoland....
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'Obama effect' and shot at Olympics boosts Chicago real estate
Chicago Sun Times, Don DeBat, 1/30/09
"... said Gail Lissner, vice president of Appraisal Research Counselors..."
Like a zephyr of hope, the "Obama Effect" is embracing the future of the Windy City. The inauguration of President Barack Obama happened only a week ago, but a strong wave of positive karma already is lifting the spirits of Chicago's real estate developers and lenders, experts say. "A new direction for the future growth of the Windy City is about to take shape as a result of Barack Obama, a Chicago resident, ascending to the Presidency of the United States," predicts developer Nicholas S. Gouletas, CEO and chairman of American Invsco. "President Obama, with the support of Mayor Richard M. Daley, chose to start his political career in Chicago and live here by choice because he realized what a great city of opportunity and change Chicago represents," said Gouletas, a condo-conversion specialist who has developed, marketed and managed over 45,000 units valued at $4.5 billion since 1969." Now, many experts believe the Obama Effect will have an uplifting impact on Chicago's chances to host the Olympic Games in 2016. And, this scenario creates promise for new international recognition for Chicago, already viewed as a world-class city....
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Waterview Tower
Crain's Chicago Business, Andrew Schroedter, 1/26/09
"... source: Appraisal Research Counselors."
Nearly three years after construction started on the 90- story Waterview Tower, all that stands at Wacker Drive and Clark Street is the concrete core of a building. Chicago-based Teng started work in 2006 on this $500-million hotel-condo project using its own money and later a $20-million bridge loan from Chicago's LaSalle Bank N.A. But Teng has been unable to secure the loan it needs to complete the building....
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Lincoln Park 2520
Crain's Chicago Business, Andrew Schroedter, 1/26/09
"... source: Appraisal Research Counselors."
The developers have a prime location overlooking Lincoln Park and a partner with deep pockets, General Electric Co.'s pension fund. But what Ricker-Murphy lacks is the loan of $200 million to $250 million it needs to build this Lucien Lagrange-designed complex....
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Chicago Spire
Crain's Chicago Business, Andrew Schroedter, 1/26/09
"... according to Chicago-based real estate consulting firm Appraisal Research Counselors."
The Chicago Spire has seen its share of ups and downs. Beanie Babies mogul Ty Warner reportedly agreed in September to buy the 10,293-squarefoot penthouse, which had an asking price of $40 million. Sales at the project, acclaimed for its soaring height and twisting design, accounted for 58% of all new downtown condos sold in 2008 as of October, according to Chicago-based real estate consulting firm Appraisal Research Counselors....
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X/O Condominiums
Crain's Chicago Business, Andrew Schroedter, 1/26/09
"... source: Appraisal Research Counselors."
Slowing sales at this Lucien Lagrange-designed condo project aren't due to a lack of exposure. The developers engaged in a well-publicized feud with Alderman Robert Fioretti (2nd), filing suit in October 2007 to prevent him from downsizing the project, which some residents claimed was too large for the neighborhood. The suit was dropped after Mr. Fioretti later withdrew a proposal to reduce the height of the two towers (one is 450 feet and the other about 310 feet) to a maximum of 225 feet....
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Peshtigo
Crain's Chicago Business, Andrew Schroedter, 1/26/09
"... source: Appraisal Research Counselors."
The angular design of this proposed 57-story condominium tower is eye-catching, but the look has wooed few buyers. Weak sales at the $180-million project, designed by well-known architect Ralph Johnson, a principal with Chicago-based Perkins & Will Inc., have raised questions about its future....
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Collection suits hit 2 West Loop projects
Crain's Chicago Business, Alby Gallun, 1/21/09
"... said Gail Lissner, vice president of Appraisal Research Counselors...."
Debt collectors are calling on two more West Loop condominium projects, one that?s completed but has failed to sell out and another that isn?t even out of the ground. In the first case, Cole Taylor Bank has sued to collect $6.8 million owed on a 132-unit condo development at 740 W. Fulton St. that opened in 2007. The Chicago-based bank alleges that the project?s developer, an affiliate of Thrush Cos., failed to pay back the money, which represents the outstanding balance on $38.5 million in construction loans, by a Nov. 1 due date....
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Downtown deals and housing downturn allow renters to go upscale
Chicago Tribune, Mary Ellen Podmolik, 1/18/09
"... said Ron De Vries, a vice president at Appraisal Research Counselors."
With an abundance of empty apartments, renters are negotiating their way into premium buildings - It's not just a chance to see how the other half lives. It's a chance to live there yourself. A bumper crop of chic rentals, coupled with a lack of demand, a crippled economy and a typically sluggish time of year for real estate, is creating some of the best downtown deals in at least five years. An added wrinkle ? much to the chagrin of landlords ? is the growing market of individually owned and aggressively priced to rent condos in premium buildings such as the Trump Tower, the Helmut Jahn-designed 600 North Fairbanks and 600 North Lake Shore Drive....
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Kenwood sales benefit from 'The Obama effect'
Chicago Sun Times, Celeste Busk, 1/18/09
"... said Gail Lissner of Appraisal Research Counselors..."
Kenwood, the community President-elect Barack Obama calls home, is emerging as one of the premier destinations for buyers looking for a stunning lakefront enclave with a suburb-in-the-city ambience. Real estate experts say the fact that Obama has lived in Kenwood since early 2005 has spurred a new catchphrase among residents and real estate professionals predicting Kenwood's continued growth: "The Obama effect." Add the speculation the city may win its bid for the 2016 Olympics, which would prominently feature the city's South Side, and you have a flurry of interest in Kenwood among home and condo shoppers and local developers looking for sites to build or redevelop residential housing. The spotlight is shining on Kenwood also due to recent improvements to nearby Lake Shore Drive and the Lake Michigan shoreline, including a beach planned at 39th Street and a harbor proposed at 31st Street....
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South Loop cool-down seen in '09
Crain's Chicago Business, Alby Gallun, 1/5/09
"... according to Appraisal Research Counselors..."
The downtown Chicago condo market is bad all over, but it's worse in the neighborhood that was hottest during the building boom: the South Loop. Builders will complete 2,147 condos in the South Loop this year, a 66% increase over 2008 and nearly half the total for all of downtown Chicago, according to Appraisal Research Counselors, a Chicago-based real estate consulting firm. But with 932, or 43%, of the new South Loop condos unsold, the neighborhood now accounts for more than half the unsold units expected to hit the downtown market this year....
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