Market Conditions: The Luxury High Rise 2520 N. Lakeview in Lincoln Park Gets Financing
Nearly everyone has heard the tv and radio advertisements for the new construction luxury high rise at 2520 N. Lakeview in Lincoln Park over the last several years.
Left for dead, Crain’s and other news outlets are reporting that the development has found financing and construction will move forward.
A development venture backed by the General Electric Corp. pension fund obtained a $170-million loan from a Japanese bank for a high-end condominium project overlooking Lincoln Park, the first major condo construction loan in Chicago since the credit crunch began nearly two years ago.
Ricker-Murphy Development LLC said a group of lenders led by the Americas division of Sumitomo Mitsui Banking Corp. closed Friday on the loan for Lincoln Park 2520, a three-building condo project on the site of the demolished Columbus Hospital, 2520 N. Lakeview Ave.
The building is now expected to have 229 units, up from the recently proposed 198 units.
Given the delays in the project and the turn in the economy, buyers have walked away from $136 million in contracts.
Now, about 30% of the 229 units are under contract, the developers say. The first units are expected to be delivered in early 2012, with the project’s completion that summer.
With many luxury buildings recently completed (The Legacy, Aqua, The Elysian, Walton on the Park) and some soon to be (the Ritz), what will the market be for yet another couple hundred luxury units?
Lincoln Park condo project lands $170-million loan [Crain’s Chicago Business, Andrew Schroedter, August 16, 2010]
That is a prime location. I sure hope the towers will look nice.
Does anyone have a link to any renderings of this project?
http://www.lincolnpark2520.com
Thanks anonny.
The project architect is Lucien Lagrange. There was a previous crib chatter post about Lucien retiring his firm and declaring bankruptcy.
I wonder how the successful funding of this project fits in with all of that.
This will have to be something pretty special to combat the market. Coming from LL, my expectations are big windows, low ceilings, and high assesments.
I don’t think Lagrange’s retirement or his firm’s BK relates to the financing (nor should it affect the sales). Given GE’s involvement in the project, it was only a matter of time until somebody (outside of this country) would front the rest of the money.
I do, however, feel that it’s a mistake to increase the number of units to 229. They had already decided to reduce the number, and to make the tower shorter (instead opting for more townhomes). In any event, it will surely be a beautiful addition to Lakeview Ave (certainly better than the hospital was)…though I’ve heard some complaints from prospective buyers that all but the biggest/most expensive units look to be rather cramped (albeit nice). We shall see.
wasn’t there a topic yesterday stating that there would be no new projects in the next 5-10 years in Chicago? Just more proof that nobody knows wtf they are talking about!!!!
clio–when are you moving into your penthouse unit at the Spire?
“clio–when are you moving into your penthouse unit at the Spire?”
I honestly don’t want to talk about myself – but others keep bringing up things like this (and I always feel as if I have to respond) – however, I do apologize if I come off too overbearing or bombastic. I will try to temper my responses in the future.
“Left for dead, Crain’s and other news outlets are reporting that the development has found financing and construction will move forward.”
I have been holding off on saying anything, but this does it. The old Sabrina would not have committed this glaring grammatical error (dangler). I miss the real Sabrina.
Living a block away, I was kind of hoping this project was DOA. I still don’t get the pricing of units — I believe they are more money per sq. ft. than just anything in Chicago other than the Spire, Trump and Elysian. Nice neighborhood, but $750k for an 850 sq. ft. 1BR?
The new Sabrina also recently banned my home account and my work account was banned for the longest time. The new Sabrina is obviously indoctrinated by the PC-propaganda machine and realizes that they need to restrict speech and dissenting viewpoints they don’t agree with or find offensive.
Definitely smells like a leftist liberal arts kid and not the business savvy Sabrina we’ve all come to know.
So did Joe Zekas buy cribchatter?
I think so
Clio – don’t sweat the attention. People on this site have opinions as to the best course for investment of real estate yet as previously stated, they’re just opinions. They tend not to listen to people who have actually lived through the situations or have accured a great deal of wealth. It’s a shame actually.
does this mean we’ll have more videos on why people bought at 235 Van Buren?
“wasn’t there a topic yesterday stating that there would be no new projects in the next 5-10 years in Chicago? Just more proof that nobody knows wtf they are talking about!!!!”
This isn’t a new project. They’ve been continuing work on the parking garage and townhome portions of the project all along.
“wasn’t there a topic yesterday stating that there would be no new projects in the next 5-10 years in Chicago? Just more proof that nobody knows wtf they are talking about!!!!”
Clio,
We are maybe the 3rd inning of the game, at the beinging of the great depression building continued at a slowed pace then stopped. In Chicago it took 21 years from when the last depression building was completed (The LaSalle Bank Building) until they built the Prudential building. I am not saying that we are entering another depression, but would not be supprise if there was a ten year lapse in highrise residental construction at some point.
There will be little new construction for the next 2-3 years, some, but few. This is a fact because if there was, contractors would be bidding on the work and they isn’t much work to bid on. Plus, usually GC’s have most of the plans wrapped up prior to breaking ground (except for coordination-type stuff) which usually takes 1.5 years to complete from ground break – in a good econ.
I said it earlier on a different post and I’ll say it again… This project got financed b/c GEPT is gty’ing repayment of the loan at a date certain point in time (a put). It will get built and the banks will get repaid in-full earning a handsom interest rate in the process. It was viewed more as an unsecured loan to a multi-billion dollar pension fund with the real estate as an abundance of caution rather than a true construction loan.
Loan is less than 50% of cost. If there are 229 which sell for an average of $2.0 million per unit, the sell-out would be $448 million. So, the loan is less than 50% of proforma sales.
I dealt with Corus back in the day, their underwriting was pretty standard, they’d do a construction loan that was 80% of cost which equaled 60% of gross sales. Considering they wouldn’t fund the loan until presales had reached 40%, it’s hard to see how they failed!!
“…which is expected to cost between $350 million and $400 million.”
I somewhat understand the financing situation of this building, but behind the numbers, there has to be a logic and opinion that these units will sell. Do these builders think that the rich are going to come out of the closet and start buying these expensive units (oh, btw, I was being sarcastic when I said in a previous thread that people should snatch up units at the Ritz and Elysian) Seriously, if units at the Ritz and Elysian (both great projects) are NOT sold out now – why would these developers think that people would want to buy in their building?
Ugh, this building is FUGLY.
http://www.lincolnpark2520.com/#/Home
”
‘Left for dead, Crain’s and other news outlets are reporting that the development has found financing and construction will move forward.’
I have been holding off on saying anything, but this does it. The old Sabrina would not have committed this glaring grammatical error (dangler). I miss the real Sabrina.
”
Not necessarily. I, for one, left Crain’s and most other news outlets for dead a long time ago.
Look at the 1-br floorplan, another 14’x15′ Living/Dining Combo ala Trump. Can’t fit a dining room table, now this is luxury living at its finest.
Pension funds. Biggest sucker investors on the planet. Just look at CALPERS and their “savvy” moves.
It’s not like they need to do their due dilligence, because if (when) they fail, we taxpayers just bail them out.
Lunacy.
Is it just me or do these floorplans blow?
“Is it just me or do these floorplans blow?”
Wow, sonies, I didn’t realize you blow!!!! (ha ha)
No, I agree w/you – it’s a shame that better floor plans could not have been configured.
Sonies: I second that they are a bit goofy. Check out P1 – 8k square feet, 80? outdoor, but check the laundry room out. It’s on a different floor, and about as far away as possible, from the master bedroom. Though I guess the maid will be the only one mad about that.
Plenty of space an opportunity to change things like that around yet I’d assume.
“The new Sabrina also recently banned my home account and my work account was banned for the longest time. The new Sabrina is obviously indoctrinated by the PC-propaganda machine and realizes that they need to restrict speech and dissenting viewpoints they don’t agree with or find offensive.
Definitely smells like a leftist liberal arts kid and not the business savvy Sabrina we’ve all come to know.”
Bob: Only one person has ever been banned from this blog and it was the fake Homedelete.
I wish people would e-mail me on the side if suddenly their posts aren’t going through because then I can check into it (or if there is a “fake” person- ala HD2. Homedelete DID alert me to the issue with his faker at that time.)
I just searched the spam folder and found a bunch of your e-mails in it, Bob. I don’t know why the system thinks they are spam. I de-spammed them so you should be able to post from the other IP address again.
As for not putting through the second IP address right away- since the fake Homedelete incident, I’ve grown more careful in screening people who are trying to use the names of people already on the site. So I waited to see several comments and the tone of those comments in order to determine if, yes, indeed, it was the Bob we all know and love.
So, no, you aren’t being censored but my spam filter doesn’t take kindly to you.
Oh, one other thing, if you try and post under multiple names I WILL ban the other identities as I don’t think that’s fair to everyone on the site.
“Only one person has ever been banned from this blog and it was the fake Homedelete.”
I totally believe it- if Sabrina wanted to ban people with whom she did not agree (or like), I would have been banned a long time ago!!!
I never really considered that a Trump one bed doesn’t have room for a dining room table. That is sheer lunacy.
HD, check out the link for one of the trump 1bedrooms. http://www.trumpchicago.com/Floorplans/floorplans.asp
Many thanks to the prior developers for leaving a giant hole in the of one of the most beautiful places in the city.
how about if you’re a developer and you go broke,
just plant some grass before you go
too much too ask?
“does this mean we’ll have more videos on why people bought at 235 Van Buren?”
That one just made my night.
Also, who on earth is going to pay for these when they can live in Trump if they want to blow money on a luxury high rise?
“Also, who on earth is going to pay for these when they can live in Trump if they want to blow money on a luxury high rise?”
Not saying that I’d buy at 2520 (as if I even could), but I, and I imagine others as well, would rather live directly on Lakeview Ave or Lincoln Park West (or on Astor, State or Dearborn between North and Division) than on the Chicago River, or anywhere in River North for that matter.
These are going to sell very slow and everyone will lose their shirt over this.
“These are going to sell very slow and everyone will lose their shirt over this.”
On the surface, it seems that you are right – but I think there has to be something we are missing. These developers aren’t stupid. Even if the project started before this whole financial mess, projects do not need to go forward (I have seen several projects significantly scaled back or even cancelled). I agree that, although there ARE a ridiculous number of wealthy people with significant amounts of cash, most of them are still hurting (mostly psychologically) from the recession and are likely NOT going to go out and buy expensive luxury condos (they WILL buy foreclosures/bargain homes for investments, but I don’t think they are yet ready to splurge on non-discounted luxury condos)
Most people forget that this part of Lincoln Park has not seen any new high rise development in, what, 20 or 30 years? Long time owners in the neighborhood in the older buildings are chomping at the bit to get out of their now outdated buildings and buy the “new” and still have the same great neighborhood and views.
Additionally, there are LP residents who live in single family homes but their kids are grown and now they want an easier lifestyle. Again, they can stay in the same neighborhood and have “new”.
After hearing from numerous agents who have Lincoln Park clients who all want to live in this building, I think it will sell pretty well.
“Additionally, there are LP residents who live in single family homes but their kids are grown and now they want an easier lifestyle. Again, they can stay in the same neighborhood and have “new”… I think it will sell pretty well”
– First of all, if I would have said such a thing, I would get lambasted from here to eternity
– but, more importantly, while I do understand the logic, these “rich” people aren’t stupid and have to understand that they are going to have a very difficult time selling the places in which they are currently living. This would (?should) be a deal killer for most people.
As a relevant example (don’t attack me) I actually looked at a co-op at 999LSD. It was on the market (still is) for 3mil w/6400 month assessments. The poor woman who owned this place had bought a smaller place in a new building and was really stressed because she had the expenses of 2 places. This place has now been on the market for over 3 years now and she continues to pay taxes/assessments/upkeep on both places while only living in one. This has to be at least psychologically exhausting… (even to someone who has lots of money).
2520 N Lakeview is too expensive. There aren’t enough people left in the midwest who are willing to pay $785k for an 850 sq foot 1 bedroom.
Builders build. That’s what they do. And they’ll keep building until they can’t build anymore. Usually because they go bust or can’t obtain financing.
It’s too early in this bust to start building again. Even the Empire State Building was called the Empty State Building because it was largely vacant during the great depression and didn’t become profitable until the economy picked up years later.
$850k one bedrooms over looking Lincoln Park? Good luck with that.
“Even the Empire State Building was called the Empty State Building because it was largely vacant during the great depression and didn’t become profitable until the economy picked up years later. ”
Poor example because it was completed in the teeth of the depression. Better example is the WTC, which only got tenants initially b/c of government and related entity tenants. But still, comparing office and residential is a dicey proposition in all cases.
But–$1000 psf one bedrooms? I don’t see it, either, at this location.
As someone who has purchased in this building and stuck it out through all of the false starts, let me give a different perspective on why to buy here (YoChicago style).
Yes, the per square foot costs are high. Outrageous really when you consider the comps. But it is unique from other luxury offerings in the city. For a Lincoln Park buyer that has a family, it has a lot of big pluses that are nearly impossible to find elsewhere (and believe me I’ve looked). First, a private yard for the kids to play in. Plus the big park right out front. Even if you can afford a single family house on North Orchard, there is still little outdoor space. This was a big deal, at least for me. Second, proximity to the best schools (private and public). Third, truly new construction with low assessments relative to the old-time high-rises in the area. Assessments in this building top out at $2-4K – and that’s for a penthouse. My 3 bedroom will be about $450. Or so they tell me 🙂
There are a lot of units to sell at a lot of $. But I think this building will be OK because it has features that others just don’t have (and a great location, of course).
“Yes, the per square foot costs are high. Outrageous really when you consider the comps. But it is unique from other luxury offerings in the city. For a Lincoln Park buyer that has a family”
Bigger units, sure. But who’s buying the 1 brs? Other than those wanting to combine.
“My 3 bedroom will be about $450.”
OK – let’s get this straight – you bought a THREE bedroom in this building and expect assessments to be about 450?!! Are you KIDDING ME?!!!!! Before you go any further, please look into this more carefully. I would be willing to bet any amount of money that your assessments on a 3 bed in this particular building WILL be at least 700-800 and more likely closer to 1000 (if not more).
“OK – let’s get this straight – you bought a THREE bedroom in this building and expect assessments to be about 450?!! Are you KIDDING ME?!!!!! Before you go any further, please look into this more carefully. I would be willing to bet any amount of money that your assessments on a 3 bed in this particular building WILL be at least 700-800 and more likely closer to 1000 (if not more).”
They’ll be about $450 until the association is turned over to the residents. Developer wants to keep their contribution to reserve building v. low until then. SOP.
I agree, anon. I hope that bct realizes this (and, my estimate of the assessments is pretty low). If you look at 3 bedroom units in comparable buildings, average assessments range from 900-2400/month. Of course, if you can afford to live in this building, you probably aren’t worried about underbudgeting 10-20k/year.
It’s not the best example in the but it works just fine. Both projects were conceived in better times, both projects were built (or will be built) in very bad times (the double dip is coming, the GS was 1929-33 before things got better, and we have another year or two IMHO of bad times ahead); and both were high quality and expensive product for the market ($1,000 psf for 2520 and the costs associated with building the tallest building in the world for the ESB). So there are plenty of similarities, although you pointed out the differences.
“Poor example because it was completed in the teeth of the depression. Better example is the WTC, which only got tenants initially b/c of government and related entity tenants. But still, comparing office and residential is a dicey proposition in all cases.”
Your assessments for a 3br in this building will probably b e $450 the first year… then double or possibly triple after that