Market Conditions: Interest Picks Up in Waterview Tower
Many of us have wondered just how long we’d have to look at the shell of a building that is (was?) Waterview Tower on Wacker Drive.
Greg Burns at the Chicago Tribune recently talked with Peter Greene, first vice president at CB Richard Ellis in Chicago:
Halted after work began, standing like a broken tooth in the smile of Chicago’s Wacker Drive cityscape, the forlorn Waterview Tower is attracting “a lot” of interest, Greene said in an interview. Groups of potential buyers are all over the 26 stories of bare concrete at 111 W. Wacker, he said, many taking his advice to dress in workout gear, since there’s no vertical transportation.
Some hope to complete the 90-floor project, once intended to be a Shangri-La Hotel with luxury condos. Some want to cut it off at 40 floors and put in rental units. Student housing is a possibility, or offices at the top, Greene said. “It will depend on who’s imagination is best and who can close.”
A foreclosure battle between developer Teng and Associates and Bank of America is awaiting a written ruling. Those owed money in the failed project are on board “to market it professionally,” Greene noted. Contrary to reports, the bare concrete structure is in “pretty good shape” despite more than a year of idle exposure to the elements.
Stalled Waterview Tower on the move, its broker says [Chicago Tribune, 8/7/2009]
This was my favorite project in all of Chicago, it was terrible to see it die. I hope they bring it back, the exact same way it was intended.
I am sure others would argue that anything is better than the shell that sits on wacker, I would argue that I would rather it be an ugly reminder than something less than it could be.
The name “Shangri-La” evokes images of seedy motels, vibrating beds, and meth addicted night managers. I’d suggest a move to the area under the El on Wabash – may be more of a fit.
It currently looks like shit, I hope they do something with it and fast.
Obviously there is value in the structure. Capping at 40 floors or wherever it is at now and making something out of it makes the most sense.
No way its going to get built to plan at ninety floors. Thats insanity in this environment.
I’m guessing its going to be longer than a year before we see any movement on this project. Its sad too because it’s such an eye sore.
Even at 40 floors. Chicago is not Manhattan. $1000 +/sq ft condos are just not as welcome here, especially not with the new stricter lending standards. I agree with James, I think it will be a while before any plans are finalized.
There are plenty of buyers ready to step into this and other projects at the right price. The question is whether or not the lenders are prepared to take write downs and sell for the right price. So far the answer has been no on most high profile (and low for that matter)commercial real estate projects.
“The name “Shangri-La” evokes images of seedy motels, vibrating beds, and meth addicted night managers.”
Never been near a real Shangri-La Hotel, I guess. Pretty much as far from your image as possible.
Even if the building is capped at 40 stories there’s nothing stopping them from building higher at a later date, like the BC/BS Building at 300 E Randolph. I realize this is a long shot at best, but just sayin’…
“Even if the building is capped at 40 stories there’s nothing stopping them from building higher at a later date”
It would stop it from being something like the original plan, tho. The original called for rising at it’s current size to about 30 (I think slightly less–someone correct me) stories and then a much thinner tower rising from than for the next ~60 stories.
It would be ridiculous to build ~ten stories of the (original design) condo portion in such a way that it was complete for occupancy, yet ready for expansion. BCBS was designed for expansion from day one, so, while possible, it would almost certainly be part of a major re-design of the project.
Also, I know that some of the interested offerers (won’t call them bidders) had in mind operating the parking garage portion substantially as-is and doing basically nothing beyond work necessary to operate the garage, for now. Reminiscent of the Steppenwolf garage on Halstead, but 25 stories instead of three.
JN on August 11th, 2009 at 8:44 am
The name “Shangri-La” evokes images of seedy motels, vibrating beds, and meth addicted night managers. I’d suggest a move to the area under the El on Wabash – may be more of a fit.
Shangri-La is one of the world’s finest hotels, on par with the Four Seasons, Peninsula, Mandarin, etc. Chicago would have been its first location in the US. To anyone who has traveled outside the US, the name Shangri-La certainly does not evoke any of the images referenced by JN. Very provincial comment.
Well, Shangri-La does make me think of a porno theater, but maybe that’s because my father knew the owners of the Shangri-La porno theater on State Street back in the 70s.
The foundation and columns of the building are built to support a 90 story structure, it would be an incredible waste of investment to cap the tower at 40 stories. Also, I think turning the building into a parking structure would be the worst possible thing the city could do with this building, it would only serve to increase the congestion in the loop and provide minimal benefit.
“it would be an incredible waste of investment to cap the tower at 40 stories.”
No the incredible waste of an investment already took place, and that was planning a 90 story tower that there wasn’t sufficient demand for. Its a sunk cost at this point.
Capping and finishing, once the former owners are out of the picture and the debt written down, makes the most sense as you basically have the completed skeleton you can get for pennies on the dollar in bankruptcy court. A far higher ROI then completing the skeleton and building to original spec.
A parking garage might be an even higher ROI investment as little more needs to be done, even if poor from an urban planning standpoint.
“I think turning the building into a parking structure would be the worst possible thing the city could do with this building”
The first 12 or so floors (above ground floor) **ARE** a parking structure, no matter what they do with it. There’s no getting around the parking aspect of it; it’s just a question of what happens with the upper existing floors and any new construction above that.
Even if a buyer comes to the table for this ‘asset’ the creditors who are going to tie up the project. There is over $80 mil in liens on it! Plain and simple, this deal doesn’t move until Teng files Chap. 11 and restructures the debt load.
“this deal doesn’t move until Teng files Chap. 11 and restructures the debt load”
Or one of the many lien holders files a foreclosure suit. There’s no reason for it must be voluntary by Teng.
And, duh, any sale would be brokered by the lenders; no one (seriously) thinks there’s any equity left in the porject. Teng might get a few dollars on one of their liens, as a sop for being cooperative (if they are).
From what I understand, Teng (Design Company) has piled Millions in Liens against the project (Teng Development Company).
That is correct, Teng has liened the project, along with BofA and 4 or 5 various groups. It is a mess!