Posts Tagged ‘Crain’s’

Home prices in Chicago fall in the month of October.

Posted by ChicagoismynewBlog! on January 3, 2010

So you may think it’s pretty weird to have this posted in January of a totally different year, but the figures just recently came out and were printed in Crain’s Chicago Business, one of the trusted business sources in Chicago.  Even if the idea of prices falling in Chicago isn’t great, it will only help things get back to a more “normal” state quicker.  I’m just happy sellers are finally starting to recognize that they, generally, can’t make a 100K profit.  I also see that they’re finally listening to their REALTORS!  Makes my job a bit easier also!

Chicago home prices fall in October

Dec. 29, 2009

(AP) — Chicago-area home prices showed the second-biggest drop in October of 20 metro areas, according to a report Tuesday.

Local prices fell 1 percent in October compared with September, the first drop after five straight monthly increases, according to seasonally adjusted data from the Standard & Poor’s/Case-Shiller home price indices.

Home prices in the Chicago area were down 10.1 percent in October compared with October 2008.

Peter J. Birnbaum, president of Chicago-based Attorneys’ Title Guaranty Fund, thinks the October decrease can be attributed to timing, coming after the expiration of foreclosure moratoriums and at a time when many closings were to first-time homebuyers taking advantage of a federal tax credit.

Mr. Birnbaum expects local prices to decrease over the next year because of the high inventory of distressed properties.

“I think we’re going to see this for a while,” Mr. Birnbaum says of prices falling.

Nationwide, prices rose in October for the fifth month in a row, but the recovery continues to be uneven, with only 11 of the 20 metro areas tracked showing gains.

The 20-city S&P/Case-Shiller index released Tuesday edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September.

The index was off 7.3 percent from October last year, nearly matching expectations of economists surveyed by Thomson Reuters.

The index is now up 3.4 percent from its bottom in May, but still almost 30 percent below its peak in April 2006.

Tampa, Fla., showed the biggest decrease in October from September, a seasonally adjusted 1.2 percent.

San Francisco and Detroit posting the largest increases. Dallas recorded a flat reading for the month.

“Coming after a series of solid gains, these data are likely to spark worries that home prices are about to take a second dip,” David Blitzer, chairman of the index committee at Standard & Poor’s, said in a statement.

That happened in the early 1980s, he said, and the current housing recovery appears more solid….

To read the full Crain’s Chicago Business article, click HERE!


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Ritz-Carlton Residences on Michigan Avenue moving forward! Positive news for sure.

Posted by ChicagoismynewBlog! on January 1, 2010

Kuwaiti bank pegs Michigan Avenue condos at $242 million

By: Todd J. Behme Dec. 28, 2009

(Crain’s) — A Kuwaiti bank that has invested in the Ritz-Carlton Residences, a 40-story condominium tower under construction on Michigan Avenue, said Sunday that the project is worth $242 million.

Kuwait Finance House said in a release that it has a 95% stake in the project while Chicago-based Prism Development Co. owns the remaining 5% of the development at 664 N. Michigan Ave.

The investment is a pricey bet that the market for new luxury condos will rebound strongly by 2011, when the project is scheduled to be completed.

The $242 million refers to the gross sales proceeds from the 88 condo units, says Bruce R. Schultz, a principal with Prism. He estimates the cost of the project at $200 million. The development has a $137.5-million construction loan from the German financial institution known as Helaba.

Of the remaining capital in the deal, Kuwait Finance has put up 95%, which would be about $59 million. That includes a $40-million preferred-equity investment when the sale of the site closed last year.

After KFH and Prism each recoup their equity investments, they will split the projects’ profits 50-50, Mr. Schultz says.

The project is about 40% sold, roughly unchanged in more than two years.

But in a hopeful sign, two contracts have been signed in the past 30 days, Mr. Schultz says. The development is slated to be completed at the end of 2011, with the foundation to be complete by March 1.

“We’re moving forward,” Mr. Schultz says, adding that the project is “very fortunate” to have KFH and Helaba on board.

Despite the current slowdown in sales, the project could benefit next year from a pent-up demand for high-end condos, says Gail Spreen, president of residential brokerage Streeterville Properties.

Also, Ritz-Carlton Residences will face less competition than it might have because of cancelled projects, she says….

Check out the full Crain’s Chicago Business article by clicking HERE!


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Union funds meant to finance The Chicago Spire construction now kaput.

Posted by ChicagoismynewBlog! on December 29, 2009

From this week’s In Other News

Chicago Spire twists in wind as union funds pass on bailout loan

By: Eddie Baeb December 21, 2009

Officials at four big investment funds affiliated with labor unions say they’re not interested in rescuing the stalled Chicago Spire project.

Recent reports that Spire developer Garrett Kelleher and union officials are discussing a possible loan rekindled hope that work would resume on the twisting tower, which at 150 stories would be North America’s tallest building.

But two union funds identified by a local labor leader and a Spire spokeswoman as having expressed interest, the AFL-CIO Building Investment Trust and the union-backed life insurer ULLICO Inc., are taking a pass, according to top executives there. Representatives of two others, the AFL-CIO Housing Investment Trust and the Multi-Employer Property Trust, say the Spire isn’t a suitable investment for them.

“It’s not something we’re able to do,” says Edward Smith, president of ULLICO. “Unfortunately, these are just very difficult markets.”

Another union fund or group of funds still could step forward with a loan for the project. Mr. Kelleher also could secure funding from other sources. But the lack of interest from the four big funds narrows the Irish developer’s options as he seeks a financial lifeline for the Spire.

They’re among the largest funds of their kind, controlling about $13 billion in union pension funds and other assets. They also have a history of commercial real estate investing here and around the country, and an interest in backing projects that create jobs for union workers.

Worries about the prospects of the Spire in a moribund real estate market appear to have trumped their desire to help put union members back to work. The funds are no more eager than other real estate investors to risk money on a highly speculative project in the worst downturn in recent memory.

Mr. Kelleher seeks about $170 million in short-term financing to pay off existing debt and move the project forward. It would be a particularly risky loan because the most likely source of funds for repayment would be a construction loan for the $1-billion-plus project. Construction lenders typically advance funds only after a developer sells 50% of the units in a condominium project. After two years of worldwide marketing efforts, Mr. Kelleher has sold about 30% of the Spire’s 1,194 units.

In essence, Mr. Kelleher is asking the union funds to bet on his ability to sell condos in a stagnant downtown housing market, where mortgage and construction financing is hard to come by.

Michael Arnold, head of investor relations for the AFL-CIO Building Investment Trust, says his fund can’t take that risk. “We would obviously like to be helpful,” he says. “We understand the interest, but we’re not any different than other real estate lenders today.”

Thomas Villanova, president of the Chicago & Cook County Building & Construction Trades Council, hopes union fund managers will consider not only financial risk but also the job-creating benefits of the project.

“This just can’t be looked at in a straight investment-type view. You’ve got to add into the equation this would be 7.5 million man-hours for my members,” Mr. Villanova says. “I don’t think we’ve ever seen times as bad as they are now.”

Mr. Villanova organized a meeting in the spring between Mr. Kelleher’s company, Shelbourne Development Group Inc., and representatives of the 24 local unions that comprise his group. He says some local union officials met with Shelbourne again, but he can’t recall which ones.

More recently, Mr. Villanova arranged a meeting on Nov. 30 between Shelbourne and Mark Ayers, a Washington, D.C.-based union leader who’s a board member with ULLICO and the AFL-CIO Housing Investment Trust. Mr. Ayers didn’t return calls….

Check out the full Crain’s Chicago Business article by clicking HERE!

Photo courtesy of Crain’s Chicago Business

Posted in Buildings, Chicago Spire, Construction, News Articles, Streeterville | Tagged: , , , , , , , | 1 Comment »

Chicago-area home sales jump 72% in November. That’s Awesome!

Posted by ChicagoismynewBlog! on December 23, 2009

Chicago-area home sales jump 72% in November

By: Eddie Baeb Dec. 22, 2009

(Crain’s) — Chicago-area home sales soared 71.6% in November compared with the same month last year, according to the Illinois Association of Realtors.

Below is a monthly year-over-year comparison of home sales (single-family and condo) in the nine-county Chicago area.
Month 2009 2008 Change
January 2,965 3,927 -24.5%
February 3,082 4,326 -28.8%
March 4,260 5,759 -26.0%
April 4,747 6,094 -22.1%
May 5,634 6,927 -18.7%
June 7,140 7,806 -8.5%
July 7,427 7,408 0.3%
August 7,009 6,917 1.3%
September 6,862 6,477 5.9%
October 7,286 5,467 33.3%
November 6,826 3,978 71.6%
Source: Illinois Assn. of Realtors


The group cited pent-up demand from buyers, low interest rates and the federal tax credit for first-time home buyers as the reason for the fifth straight monthly year-over-year improvement for the Chicago metro area.

Home sales in November and October of 2008 were extremely low as the worst of the nation’s financial crisis was hitting.

“November’s sales surge reflects the rush to beat the tax-credit deadline,” Mike Onorato, the association’s president, said in a press release. The tax-credit deadline was extended from November through April 30, 2010.

Median prices in the Chicago area, however, continued to fall.

In November, the region’s median price – where half the homes sold for more and half sold for less – was $189,000, down 9.1% from $207,995 in November 2008.

Total sales in the region, including single-family homes and condominiums, were 6,826 compared with 3,978 in November 2008.

In the city of Chicago, November sales were up 69.9% to 1,859 compared with 1,094 homes sold in November 2008. The median price in the city was $215,000, down 3.4% from November 2008.

Statewide, home sales totaled 10,361 in November, up 64% from the same month last year. The statewide median price was $155,000, down 4.3% from November 2008.

Check out the full Crain’s Chicago Business article by clicking HERE!

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