Market Conditions: Will Sonies Soon Be Surrounded By Thousands Of New Renters In River North?
One of the big stories of 2012 has turned out to be the sheer number of highrise apartment buildings that are being built and/or are under consideration for construction in the GreenZone, specifically the downtown neighborhoods.
Every few months there are new announcements of yet a couple of more highrises that have gone on the drawing board.
Crain’s recently reported on the latest developer to jump into the apartment fray.
Vancouver, B.C.-based Onni Group of Cos. recently paid a combined $17.8 million for a 30,000-square-foot commercial building at 353 W. Grand Ave., the former site of the Clark & Barlow hardware store, and a 40,900-square-foot parcel at 750 N. Hudson, the former Rezko property, property records show.
Onni, which bought the 30-story office tower at 200 N. LaSalle St. in April, intends to build a mixed-use development on each site that would include 200 or more apartments and retail or office space, said Onni acquisitions executive Dan Bell.
“Obviously we haven’t built anything (in Chicago) yet so it’s a bit of a learning curve for us,” Mr. Bell said, adding that the city’s “diverse economy” and “young and affluent profile” make it attractive from a development standpoint. “I think it’s (a market) that’s not going anywhere and one that, in the long term, you’re not going to go wrong in investing in as long as you’re buying the right locations for the right price.”
Onni is joining the herd of developers that have stampeded into the downtown apartment market in recent years, lured by rising occupancies and rents. Developers are expected to add more than 7,000 units to the downtown market by the end of 2014, raising concerns about a potential glut.
In River North, that includes Amli Residential’s 409-unit development at 71 W. Hubbard St. and Habitat Co.’s 450-unit project at 360 W. Hubbard St., according to Appraisal Research Counselors, a Chicago-based consulting firm.
But are the developers worried about the sheer number of units being built?
Not in the least.
While developers are building more apartments today than ever, fueling concerns about overbuilding, Mr. Evans said he is not concerned about supply getting ahead of demand because most condominium developers have been sidelined since the recession, leaving more room in the market for rentals.
“We didn’t buy these things to hold as land, so our intention is to proceed as quickly as we can, but we also need to educate ourselves on certain aspects of the process,” Mr. Bell said.
Any guesses on how this apartment boom is going to play out over the next five years?
- Answer A: It’s perfectly fine Sabrina. Demand and supply are in sync. Nothing to look at.
- Answer B: The apartment glut will be solved when they are converted to condos during the next condo boom which Clio believes will start about 2016.
- Answer C: Developers will get into financial trouble…again.
- Answer D: None of the above- I’ll supply my own expert analysis in the comments.
Canadian firm plans 2 River North apartment projects [Crain’s Chicago Business, Abraham Tekippe, October 17, 2012]
B
I’ll go with C and hedge my bet with a little bit of B.
B
Answer D – There will continue to be a shortage and rising rents. Between the sheer number of boomers retiring and flocking into the city and the high number of high earning recent Big Ten and MAC (Miami of Ohio, Northern Illinois, etc.) grads descending on the city, valuations and rents have nowhere to go but up, up, up. Truthfully, though, after watching Helicopter Ben’s actions, if I had to invest hundreds of millions or billions of dollars, I would probably look to park some in RE as an inflation hedge.
C – I just don’t believe there is enough population to live in this area independent of whether it is apartment or condo.
According to the census, 60-odd percent of River North is single occupant households. And I’m guessing that if you go to double occupant households (DINC’s and retirees) that number goes well up into the 80’s. How many more 60 people are there that want to live in the area? There has to be a saturation point on the 3 demographics. As long as all that is getting built is 1 or 2 beds, those are the only groups that will live in the area.
I’ll go with 85% A, 15% C. Renting in River North for a few years makes a lot of sense for those who are new to the City and work in or around downtown. Increases in rents around Chicago’s downtown shows that there’s significant demand for rental units. So the rental market should be fine, though probably some developers will make mistakes and end up in trouble.
How many Big Ten grads making $35,000 in their first job can afford the $2000 a month price for a 1-bedroom?
Or let’s say they have a roommate (also making $35,000 a year) and they get a $3300 a month 2-bedroom?
I don’t get it. Sure- some MBAs, lawyers, engineers can afford it. But I don’t see how there are enough people with the proper income.
Oh Sabrina, the recent Big Ten grads are all making at least $37,500.
Convert some to assisted living facilities.
Its a great area with a lot going for it, the restaurant scene by itself is pretty world class with new things being added every month. Young educated people with their first law or whatever jobs will want to live in the area, face it, city living is becoming more and more desireable as energy costs rise and people realize that the city is not in fact a crime infested dump anymore like the 70’s. I’m gonna go with A for now. Apartments are in huge demand right now, HUGE!
With tight credit and financing but low rates if you have the means to get a project going like this I would imagine that you can make some serious bank! I think these developers will have plenty of wiggle room on their desired rents. I don’t think they will be getting 3k for a 1 bedroom like they think, but I’m sure they have it all figured out this time before they broke ground this time, right?
I wonder how Flair tower and NV are doing, seems pretty full to me and I thought their rents were outrageous
There is a significant trend underway with younger people. They are not getting married, they don’t want to buy, they don’t want to live in the suburbs and they don’t want to own a car. As someone who has a couple units in river north, rents are through the roof and demand is very stronge. Now the problem is that the proforma rents in these new developments are crazy and the rent trajectroy in not sustainable. Also as side suburban single family housing is dead, dead, dead.
“I don’t get it. Sure- some MBAs, lawyers, engineers can afford it. But I don’t see how there are enough people with the proper income.”
Thats because your everyday average big ten grad won’t be living in river north… the cream of the crop will be, like in your example.
Average joes from big ten schools will be renting townhouses in one of the million burbs or really slumming it in a 1br in the green zone till their career takes off
I’m going with D. Rents will stagnate or even decrease a little when these units come on line (2+ yrs). I’m sure some idiot developer will get into financial trouble along the way – probably the last guy to build in the area who top ticks the market on buying land. I’m curious what this does to the area. 9 yrs ago (when I first moved to RN) there were no rental buildings south of Chicago and west of Wells. There are now 7 rental towers – Flaire tower / EnV / the place on Kingsbury and Erie / place North of EBC and now the place east of EBC / these two new towers. This has to change the character of the hood.
The recent graduate effect on high-end GZ rentals is predicated on these graduates landing jobs in the income category being discussed. During the past 4 years many of these graduates did not get jobs in this category even if they might have in the past, and I think this trend will continue for at least several more years. As far as purchases of these units, any boom is going to be tempered by skyrocketing property taxes, another trend that is likely to continue.
Why would taxes skyrocket if there is so much more density? Which do you think brings in more revenues, a crappy hardware store or a 200 unit rental building? You’d think if anything they would lower… (haha, one can wish)
Sfh in the burbs isn’t dead. It’s pretty hot actually, houses are cheap are selling like Johnny cakes.
I’m not sure what is going to happen, but in terms of who will be renting this, it won’t be the recent big 10 grads. They are living in LP, Wrigleyville, WP, etc. Its the ones that are in the mid to late 20’s who are tired of the commute, want something nicer and tired of the crappy apts they were living in with 3 friends. They have been at their jobs for a few years and are ready to move on to something nicer. and yes, these will be the ones that got accounting, engineering, or IT jobs.
I am tired of grown men who don’t have cars, so if these condos bring in more carless men, I’m going to go to the suburbs to meet a future husband.
They are adding inventory to a housing glut. We haven’t yet worked out the condo oversupply at current prices. There are still too many empty units. Rents have “gone up” because of the addition of higher end apartment and condo rentals, the inefficiencies of the judicial foreclosure process restricting the flow of empty condos to rentals, and banks/phony/fraudie sitting on empty REO inventory. Of course, developers jumped at the rental bump in order to put OPM to work for them. Same for their enablers at the banks, hedge funds, pension funds, insurance cos, etc. We did nothing to discourage this behavior. In fact, every attempt has been made to make the last round of failures whole again. Moral hazard is clearly in play.
Jenny,
I think you would be perfect for the suburbs, maybe you can find a place next to HD. Everything is on sale in the burbs and selling like hot cakes! At least that what HD the new suburban shill is saying 🙂
“There are still too many empty units”
South Loop, yes
River North, no
Three years from now, might be a different story.
Actually oilc, not everything is on sale, inventory is way down. I also find it interesting that every new resident I meet is a city transplant. living in a condo in old town with two kids sucks when you can buy a house for nearly the same price
There goes HD shilling the suburbs again 🙂
Housing glut? Not in this part of River North its a no-mans land according to some…
“Why would taxes skyrocket if there is so much more density?”
Because Chicago is flat broke, with enormous deficits in employee pension funding, yet is still doing stupid things like granting big wage increases to incompetent CPS teachers.
“living in a condo in old town with two kids sucks when you can buy a house for nearly the same price”
I haven’t been following OT that closely, but I would very much appreciate it if you could post a link to a house in OT that’s nearly the same price as a condo. Or were you referring to $1-$2 mm condos?
I totally agree with olic – after having spent a significant amount of time with 25-32 year olds in the city over the past 6 months, I have really started believing that this new generation thinks very differently than previous generations. Prior to 6 months ago, I would argue that these younger people will all soon get married, have kids, buy cars and move to the suburbs – and while I still believe a percentage will definitely do that, I am seeing the majority in this generation rejecting home ownership, marriage, cars, etc. – renting has become much more convenient and doesn’t have the stigma it once had – people are willing to pay a premium for freedom and flexibility – and I don’t see that changing.
In addition, young men no longer know how to fix much of anything (in the past, every guy new how to fix a leaking toilet/sink, change a tire, get rid of a hornet’s nest, etc.) – younger guys today have no clue – if something is broken, they will just look up a repairman on their smartphone – and they don’t want to deal with these types of issues – so they rent….
In the city, it is even more prevalent – the only way this would ever change is if the cost differential really becomes huge – but I don’t think landlords are that stupid – they will keep it very close to ownership to ensure profitability.
I’m going with B & C… I think some of the projects will be converted to condos when the market is right, and I do think there is a long term trend toward young people staying in the city longer and boomers deciding to move into the city as empty nesters.
But, as others have noted, there is a limited market for those earning enough to spend the top dollar these apartments are asking. There are only so many newly minted investment bankers, law firm associates, etc. or trust fund kids working in PR while daddy pays their rent that’s higher than their monthly take-home pay.
Because all the developers are chasing the high end, luxury rental market they are going to get burned… basic economic theory says that as supply increases in the face of even demand, prices will come down. But can apartment building owners stay afloat if they have to drop rents after having spent top dollar for all the bells and whistles expected in a “luxury” rental?
oh no clio agrees with me……….. worlds are colliding ………
“South Loop, yes
River North, no”
Well, then, that settles it.
“I totally agree with olic”
That certainly does settle it, then.
when did Clark & Barlow go out of business? now there’s a loss.
People living in downtown make higher incomes than I think many of you want to believe. The rental market is strong because there is a shift in how people view homeownership. Single folks and DINKs want to be downtown, they want flexibility, and they want nicer places. They are willing to pay the premium to get it. A lot of the apartment inventory is severly dated. Long term renting isn’t being viewed by the younger generation as a sign of career failure anymore.
Sure, many will flee to the burbs as soon as Junior comes along, but there isn’t a rush to own. Many rather just wait until they can buy THE HOUSE now versus a temporary condo with a maybe a five year utility. The developers are seeking to fill that need.
“People living in downtown make higher incomes than I think many of you want to believe. The rental market is strong because there is a shift in how people view homeownership.”
Well the population of River North is much much smaller than “the suburbs”. I don’t think many River North folks will be moving to Lake in the Hills when/if they move to the burbs.
Its all about phasing. When they say “7,000 new units by the end of 2014” it sounds staggering, but some of those units are already coming online and when looking at the active sites/proposals it has been a fairly linear growth pattern. A problem will arise if new starts begin to happen at an exponential rate, especially if they are all occupying the same region. Hopefully before that happens (because it probably will in the next 2 years) developers will seek out other areas and leave the downtown core to settle.
“when did Clark & Barlow go out of business?”
Sold to Studio 41.
1. There is undoubtedly a continuing trend for more young people to live in cities.
2. A majority of these young people are still going to settle down and have families, but they may wait until they’re 30-40 years old to do so.
3. Buying a starter condo assuming you can sell it in 5-7 years when your kids are ready for kindergarten is a really dumb idea, as thousands of accidental landlords will tell you.
4. What Russ said about shitty apartment stock.
5. Voila! Apartment boom.
“I am tired of grown men who don’t have cars, so if these condos bring in more carless men, I’m going to go to the suburbs to meet a future husband.”
Or you could just stand at the corner of Clark and Addison at 1 AM on a Saturday night waiting for the bus as I accidentally discovered.
Chicagoans are VERY friendly!
“3. Buying a starter condo assuming you can sell it in 5-7 years when your kids are ready for kindergarten is a really dumb idea, as thousands of accidental landlords will tell you.”
Not necessarily. If you don’t overpay like the bubble buyers did and pay in cash or borrow very little, a condo can drop substantially in value and you’ll still come out even or ahead of renting over a 5 year period. But if you have that 5 year time horizon, buying an overpriced starter condo with 3.5% down such that 90%+ of your mortgage payment is going to interest for several years, I agree that is a really dumb idea.
Ultimately, the market is just a herd, the herd is moving to renting today. Give it a few years if Helicopter Ben can unleash his inflation machine and the herd will move back to buying. The current home buying generations of Americans have no collective memory of busts. As soon as the first bottom buyer walks away with $25-50k after a 2 year holding period, the Mini Trumps will come crawling out of the woodwork again.
“I am tired of grown men who don’t have cars, so if these condos bring in more carless men, I’m going to go to the suburbs to meet a future husband”
Jenny, I think Bob is available and has a car too…….. icying on the cake it’s a hybrid!
I’m in the age range we are discussing and most of my friends are planning to buy a place in the next year or have already bought a place. Most of us are single and don’t want to put our lives on hold for a future relationship that may or may not happen. Even my friend who lives in a River North area apartment is planning to buy next year. Of course, as time goes on, there will be more people in this age range to take the places of those who have moved on to owning.
I still think that the rental bubble is going to burst, but I don’t think the impact will be as hard felt as the property ownership bubble.
Major Homebuilder stocks have gone up 100% YOY. Look at stock prices of Toll Brothers, Beazer Homes, PulteGroup etc… Helicopter Bernanke is clearly the culprit with his forced 0% interest rates. The real question is but when, not if, the interest rates go back up to market determined rates what will happen? Obviously the dollar devaluing (us defaulting?) is extremely likely, but the better question is where the money will flood out to. Will it go to physical goods like real estate, gold, and other commodities or other currencies? Will the flood of dollars from investors to a potential save haven like Real Estate compensate for the loss of homebuyers due to the increased mortgage rates?
Bernanke clearly is manipulating interest rates to try and pave off the unemployment rate. He has stated that as his intention countless times. When the time is up for this inevitable policy failure and we try and stave off inflation through a Volcker like response, what will happen?
I checked out En-V and a couple of the other fancy apartment buildings. Their target audience is almost non-existent. Based on the parties and amenities, it’s clear the management companies are trying to appeal to people age 25-35, which is fine. Problem is, to comfortably afford a $2350 1 BD apartment, you need to be pulling 90k a year. How many 25 year olds make that kind of $?! And if they do, they usually owe Aunt Sallie Mae 1k a month in student loans.
how many 30-35 year olds pull in 90k?
Lots.
“I checked out En-V and a couple of the other fancy apartment buildings. Their target audience is almost non-existent”.
EN-V has a 91.2% occupancy rate and charges the second-highest rents in downtown Chicago on a per-square-foot basis, according to Appraisal Research. A studio rents for $1,485 a month, while the largest two-bedroom unit goes for $6,073.
Do you have en-v?
Read more: http://www.chicagorealestatedaily.com/article/20111005/CRED03/111009950/river-north-apartment-tower-slated-to-sell-for-about-125-million#ixzz29fsYuGfS
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“how many 30-35 year olds pull in 90k?
Lots.”
Most of the Google Mobility engineers will fall into that category and most accountants as well. And these are all people without advanced degrees (and the associated debt). I’d guess a large portion of Groupon’s employees also fall into that category. The mayor is trying to establish the area as a tech hub. Freshly minted hardware and software engineers make mid-$50’s right out of school. If there is any area that will have high-paying jobs and can support high-rent apartments, this is it. The newly minted B1G English/Communications/Psych/Poly Sci kids making $35k/yr will continue to live in Lakeview. I just hope River North doesn’t turn into dense Naperville.
“I’d guess a large portion of Groupon’s employees also fall into that category.”
Define “large portion”.
Aggregate cost of cash comp + benefits in 2011, divided by total employees was under $40k–admittedly misleading as a single statistic. But with a (presumed) floor of about $20k, and the named execs drawing ~$300k in cash comp each, I don’t think the number making $90k+ is huge.
Another problem I see with option ‘B’ is that a lot of the new apartments that are being built (even the so-called luxury ones) were built in such a way that don’t lend themselves to be converted into condos. Be it the much smaller floor-plans, insufficient sound-proofing between units, ect.
The En-V rental building is a great example of this. You could even say that the ‘appointments’ are already condo-grade, however: the floor plans are much smaller than what you’d expect in a condo you call ‘home’, and the major noise issues due to poor build quality/insulating between units.
First HD is dead right based on my NW sub’n SFH submarket. 15 closings in last 90 days @ $380-$450K. 11 SFH’s on market in that range including 3 under contract. So if my submarket is typical, oilc is dead wrong: certain sub’n SFH markets are hot hot hot!
More interesting to me is what is happening to pricing & absorption of condos that are the equivalent of recently constructed apartments. Example: 400 N Clinton, 10 year old mid-rise in Kinzie Park PD, roughly across from K Station apt. complex. 1300 sq ft 2/2 Unit 703 was listed for $455K + $30K pkg in June 2010 and sold Feb, 2012 (20 months mkt. time) for $363,500 (w/pkg). Unit 203 was just listed for $529K + $40K pkg September, 2012 and went under contract within 30 days (low floor but nicer finishes). We won’t know price until a lender funds purchase & sale closes but if presumptive contract price is $500K isn’t that is 37.5% higher than most recent sale price? I believe renting a 1300 sq ft 2/2 unit would cost about $2800/month here or slightly higher in newer, with more amenity K Station. Any thoughts?
I guess the bottom is in….. and I can now use HD’s tagline…. buy now or be priced out forever!
I cannot believe someone actually named a building En-V. That’s just asking for ridicule and some sort of kharmic payback.
“I don’t think the number making $90k+ is huge.”
Right. What’s the “typical” groupon employee anyway? Salespeople and copywriters prob outnumber tech folks. Even for tech folks, I’d bet that salary+bonus (excl stock) averages under $90K.
“Aggregate cost of cash comp + benefits in 2011, divided by total employees was under $40k–admittedly misleading as a single statistic. But with a (presumed) floor of about $20k, and the named execs drawing ~$300k in cash comp each, I don’t think the number making $90k+ is huge.”
I assume that is worldwide including sales weenies, which is most of their workforce. I believe that their workforce in River North is comprised mostly of upper execs and geeks and would think the average pay is significantly higher than that. If a majority of your payroll lives/works in places like suburban Overland Park, KS and Newport News, VA making $25k/yr that will greatly skew that average.
There are a hell of a lot more people living in the neighborhood doing different things than groupon, like thats the only business here… Look around sometime at how many smaller businesses there are that pay extremely well
“I cannot believe someone actually named a building En-V. That’s just asking for ridicule and some sort of kharmic payback.”
Oh, just wait until you see the photos and other advertisements for the place. They’re so over the top they have to be a joke.
I have been distracting myself at work by constructing elaborate cheesy horror movie plots involving this building.
Speaking of cheesy, anyone watch “Chicago Fire” on NBC? What a steaming pile of crap that show is! Dick Wolf should be ashamed of himself
” I believe that their workforce in River North is comprised mostly of upper execs and geeks ”
I think you’d be surprised at how much of the nationwide sales staff is in Chicago. And it’s not like they have 500 “geeks” in Chicago *in addition to* 300 in Palo Alto:
http://articles.businessinsider.com/2012-03-27/tech/31243269_1_office-shrek-franchise-room-names
“We won’t know price until a lender funds purchase & sale closes but if presumptive contract price is $500K isn’t that is 37.5% higher than most recent sale price?”
No, all of the government’s attempts at inflating another housing bubble can’t bounce the cat that high. You are ignoring the vast difference in finishes. #203 has new kitchen, baths, floors, closets, window treatments, etc, of the decorator variety. #703 had 2002 developer special kitchen, baths, carpet, etc.
Come to think of it, the developer finishes were from last century.
“Right. What’s the “typical” groupon employee anyway? Salespeople and copywriters prob outnumber tech folks. Even for tech folks, I’d bet that salary+bonus (excl stock) averages under $90K.”
I’ve heard anecdotally that initially salespeople at Groupon were making CRAZY money, including getting a piece of each sale to customers for deals they put together. Like management didn’t even do the math on how much they were going to be paying people on their deals. Like 25 year olds making $300k crazy. I’m sure that hasn’t continued and can’t speak to how things are today, but the story amused me.
“Even for tech folks, I’d bet that salary+bonus (excl stock) averages under $90K.”
I think you underestimate what good “tech folks” make. I am tech folk so I know what market rate in Chicago is and that Groupon pays above it.
Who would En-v that location on Wells butted up against elevated tracks in the shadow of the Mart with crappy looking Kinzie Street buildings & the abandoned rr/ alley on south face completing the streetscape? While absorption of their apartments confirms rental demand I don’t see any retailers there despite tons of residential units in the area and supposed millions of visitors trafficing by foot and EL in and out of the Mart.
Wow G – you are so negative about what looks like a nice top floor unit with nice views – granite in kitchen & bath, maple cabinets, hardwood floors and oh yeah $136.5K more in buyers pockets to make personal decisions about whether & which upgrades (based on assumed contract price). How much extra would a buyer pay to be 5 floors higher than the Kinzie St truck route into downtown?
“I think you underestimate what good “tech folks” make. I am tech folk so I know what market rate in Chicago is and that Groupon pays above it.”
Yeah, I had some numbers in mind of what fully loaded cost was but realize now I was misunderestimating. $90 is too low for salary+bonus avg if everyone (other than execs) are included. Still, gotta think there are a lot of (non-tech) people not being paid that much if @fo’s avg is right and if groupon has even a little bit of biz sense (yeah, yeah).
I don’t know what the answer is but they need to get more units on line quick – the rent increases are killing me; if it keeps up I will have to consider buying.
“Who would En-v that location on Wells”
Well someone did the developer sold it for around 125 million, that on average is $500k per unit.
Some of these fancy apartment buildings are complete fantasies. They are amazing; like Hugh Hefner and James Bond built an apartment building. Will be interesting to FFwd two years, when other River North apt buildings are done renovating their units and amenity rooms to look like that, and rent is 20% less for a larger , equally nice unit.
yeah like you the buyer looked around and decided the bottom was in & they better get it purchased for $500K per unit or face being priced out forever. My hat’s off to the developer for having huge cajones & reaping an appropriate windfall. Lots of luck for the new owner ever reselling it without taking a huge capital loss once they experience Cook County taking their inordinate share of cash flow whilst many competing complexes come on line with newer & better amenities and interest rates move back toward their historic norms – ownership will wonder why they didn’t just lease these units.
Being on the sellers side of the table thanks for the compliment SB.
I’m sure Met Life will be fine
Congrats but I intended more to slap the buyer (MetLife – figures) rather than highly compliment the developer. When the apartment over supply arrives who will suffer most? Poorly located developments. Location is more than just River N vs S Loop – no question EnV’s location is phenomenal when viewed on Google earth. But things like noisy el tracks overhanging your entry and crappy looking environs will matter more in a competitive future imo. And imo the sale of EnV confirms an old saying – if the wind blows hard enough even turkeys can fly! Aren’t past tailwinds in real estate the reason some C(lio)C’s posters believe themselves natural born geniuses of real estate despite recent evidence to contrary? Did EnV sale require developer to keep or master lease back its empty retail space? For how long?
SB, I have said too much regarding my association with said project. And I am not Clio in fact the opposite ie the name. No real estate genius here, what I am good at is evaluating investments. Do I think there is upside in rental rates? The answer is no. Do I think real estate valuations are headed to the heavens? The answer is No. My position in real estate (less than 7% of our nw) was purchased by my husband all cash on foreclosures. The reason for the purchase was an inflation hedge as we have enough gold and dividend paying stocks. As everyone knows bond are paying shit with all downside risk. Our cash was getting less than 1% in the bank (no news here); looking for income there are few options. We bought 2.5 years ago looking at a 10 year hold. During this ten year period if we see abnormal appreciation we will sell early. After tens if interst rates are still shit we will hold for a longer period. Do I sound like Clio?
“They have been at their jobs for a few years and are ready to move on to something nicer. and yes, these will be the ones that got accounting, engineering, or IT jobs.”
What about all the other RN types: trust fund types, girls who have HP-type daddy that supports her $100K designer label consumption lifestyle while little precious works “in advertising” for only $40K, you have some “club” bartenders and waitresses that probably scrape up the money to live in these towers, the people at the numerous non-profits, foundations & charities (scamming millions esp. like some of these breast-cancer orgs do), luxury car salesmen at Perillo, Fletcher Jones, some expats from Asia or Europe subsidized somehow, foreigners who come to USA to live medium-term for highly specialized medical care (lots of Muslims do this). You have the RE brokers and loan officers like that atproperties dude in SoNo. And last but not least the Candid Candace photo crowd of Star Wars bar types, that cannot be pinned down to anything. Not all of these people are rich, but they find a way to live where they do, and still go out and get drunk….(the Muslims excluded).
I guess “C.”
Peter Evans conflates matters:
“Lenders are willing to finance apartment developments, but finding equity is not easy, said Peter Evans, a partner with Chicago-based real estate firm Moran & Co. ‘The debt is not an issue; the equity is the issue,’ Mr. Evans said.”
Huh? I’d guess that when 5-year T-notes yield 80 bps, about 100 bps less than the cpi, that “finding equity” investors, risk capital, is *not* a big problem. And besides, should readers of this poorly reported story presume that this deal’s equity investor is *not* The Omni Group of Companies’ very own Capital Division, a private-equity firm?
Who knows or cares, right? The question is: what % of this deal’s capitalization will be funded by the equity, mezz (?) and senior lenders, respectively, and at what promised yields? About that, we learn nothing. But I’m sticking with “C.”
http://www.onni.com/about/investment/
“Who knows or cares, right? The question is: what % of this deal’s capitalization will be funded by the equity, mezz (?) and senior lenders, respectively, and at what promised yields? About that, we learn nothing. But I’m sticking with “C.””
“equity” ends up meaning “mezz lender” still, especially in the construction context, imo. Think that finding true third party mezz financing, at rates remotely palatable, is tough.
Both of you are forgetting about the infamous “loan guarantee” that the equity investor is required to sign. Ask Freed, McLean, Reschke, Hunt/Latsko or any of the countless other sad stories that are still popping up on http://www.chicagorealestatedaily.com/ on an almost daily basis. I’d say over the last 3 years, there have been easily 50-60 stories about bankruptcies, foreclosures, lawsuits, etc. where the borrower is being hounded because of the guarantee they signed, that’s from the biggest deals to the small neighborhood ones. I don’t know how some of them with money can so easily sign them, knowing that just one bad deal could have a severe impact. Actually, if there are any RE Attys. reading this, what really, truly happens (w/ guarantee remedy) when deals get that screwed up?
PS Re: Google and Motorola Mobility
(Crain’s) — Google Inc.’s acquisition of Motorola Mobility is burning cash at the search engine firm, which reported a 20 percent decline in third-quarter earnings today, sending its stock down about 10 percent.
The cellphone unit added $2.6 billion in revenue during the quarter, accounting for 18 percent of Google’s $11.3 billion. But Motorola-related operating losses and restructuring charges singed Google’s bottom line.
Google said operating losses associated with Moto Mobility were $527 million in the third quarter.
“Like management didn’t even do the math on how much they were going to be paying people on their deals. Like 25 year olds making $300k crazy. I’m sure that hasn’t continued and can’t speak to how things are today, but the story amused me.”
Groupon now has thousands of employees. Those newbies they’re hiring out of college now make $40k and live in Uptown.
” Actually, if there are any RE Attys. reading this, what really, truly happens (w/ guarantee remedy) when deals get that screwed up?”
I have some experience in this with smaller developers and it’s just damage control. It’s basically Chap 11, or short sales with negotiations, payment plans, there’s not a whole lot you can do. Some defense lawyers go on the crazy offensive and bill like crazy with motions here and there, but the problem with that is that it’s almost never effective. I tell my clients that if I could invalidate the personal guaranty on your mortgage docs, I could invalidate the personal guaranties on every mortgage doc that XXXXXXX bank has made for the last 10 years, and that’s not going to happen.
Quite often these guys who got into trouble are the ones who confused debt with wealth. Sure they have $3,000,000 in assets, plus an unsold $1,000,000 house in Hinsdale, but they have $5,000,000 in liabilities and a net worth that’s actually negative. I’ve got one case now that obviously I can’t get too into but it’s a similar situation. About $300,000 a year in passive income is the only asset but there’s at least $4,000,000 in debt secured by $2,000,000 in assets, including some personal guaranties. It’s just damage control at this point, but there’s not much there other than the $300k a year which doesn’t even begin to touch the negative equity. And there are a couple of banks hounding the debtor too. The ‘B’ word is probably most appropriate at this time but that’s a hard sell to a lot of formerly successful people. This is a fairly common situation, I see it all the time actually. A lot these former real estate developers in million dollar homes are all screwed.
Sort of related, it’s just amazing how much money some of these guys made during the ‘boom’, whether it was in finance, or real estate, or trading, and so so so many of them blew it all thinking the good times were never going to end. The smart ones banked all the money but they’re few and far between. I have one case where the bread earner made $400,000 every year for the last decade, that’s almost a 1%er, and then when the good times ended, this family blew through *everything* to maintain that style of living for another two or three years, and now they literally have nothing, they can’t afford the electric bill on their 4,000 sq ft house. When things got slow they blew through savings, then retirement savings, then started borrowing, and finally, blew through the money they were supposed to set aside for taxes. I mean, this is common human story, from rags to riches and back again, but I still feel shocked every time I see one of these stories, and I see them all the time. One client told me, as I showed him his Chapter 7 paperwork, “We used to make so much money, and when we lived, we lived WELL, you know what I mean?” and in my head I was like yeah, you blew $250,000 a year every year for 15 years and now you’re upside down on your mortgage, all for a couple of trips to Hawaii, dinners at Mortons, leather shoes in your closets and cars that are now old. Good job!
ah there the hd we know a love. another riches to rags story…….. 🙂
We’re gonna be literally surrounded by Candians! This is like an awful version of Red Dawn!
Surrounded by Candians? This is like an awful version of Red Dawn!
funny ml 🙂 , second time not so much!
You guys are forgetting a huge employer of Chicago; small proprietary trading firms called “prop shops”. They have thousands of young, educated workers who are brilliant with computer programming and mathematics. These people all want to live in the areas surrounding the loop, which means River North is prime area for them to live.
HD –
So interesting.
Thank you for sharing.
I love true life stories.
They are cautionary tales.
It’s fascinating to see what motivates people.
‘What about all the other RN types: trust fund types, girls who have HP-type daddy that supports her $100K designer label consumption lifestyle while little precious works “in advertising” for only $40K…’
Spot on Dan! It’s such a midwestern/Chicago mindset that thinks only those making the cash *themselves* will be living in these new rentals, hence all the ‘how many 25 year olds make that kind of money’ talk here. I admit I used to think that way with years of childhood mid-western work ethics drilled into my brain, and I just naturally assumed that those renting or buying expensive places were making big(ish) bucks. Sure many are indeed making nice money, but the more I’ve talked with neighbors or parents of 20/30/even 40 something year old kids (especially after they’ve had a drink), the more I’ve realized that a *huge* amount of them are being subsidized by the parents, grandparents, gay uncle, whatever.
Even in my LP neighborhood, the number of households that bought here not with their salary alone but because the parents own a big PR firm, car dealership in Boca, grandma sold the farm which is now a mall, big inheritance (all true stories), is more than you think… or more than you want to think. I suppose it doesn’t matter as long as the bank or landlord gets their money, but don’t believe for a second that everyone who lives the lush life in these very small but highly visible wealthy neighborhoods, actually make the payments themselves.
Dannyhofer –
When I lived in DC I worked at GWU Hospital.
The Saudis would come for surgeries with these huge entourages and have entire wings reserved for them and their multiple wives and family members. They had special meals prepared and got the red carpet treatment with everything.
Of course they paid out of pocket for this privilege and they got the best of what money could buy.
well since today is true story day I will share one. one of my current renters is a nw grad, so I do a credit check and employment verification. employer verifies her salary at 30k a year and rent is $1850. I tell her that I cannot rent the apartment to her because inadequate salary. She says not to worry her dad will be paying. I’m thinking to myself this is going to turn out bad if she rents it. I inform that her father has to sign the lease. her father signs and tells me that he doesn’t want to deal with monthly rental checks and will do a bank-wire transfer every 6 months in advance.
Cha-ching, oilc!
Lucky u.
Another day, another developer looking to start up another apartment building… this time in the West Loop: http://www.chicagorealestatedaily.com/article/20121018/CRED03/121019770/after-losing-streeterville-site-developer-plans-west-loop-apartments
not really cha-ching, I place the money in a separate savings account with the security deposit with a monthly withdrawal. when I return the security deposit I will rebate the interest (which will be like 3 cents)
but there is peace of mind that we will be paid.
They are going nuts with apartment buildings in the West Loop, I don’t understand why some of these aren’t allocated to be office buildings since they are so close to public transportation.
Following up on comments above I do think people are understimating the incomes of these 20 somethings. However what baffles me is that I have a hard time believing they are putting anything aside for retirement. When you factor in all the expenses I don’t see how anything is left for retirement and plus I think this generation is mostly about the “now” and looking cool. Hopefully social security will still be in good shape.
There’s actually a fair number of graduate students living in the RN area. When I was in law school the 2nd most popular area to live other than presidental towers was RN, and then lakeview or WP. They’re definitely being supported by parents or aunt sallie. lots of med students and NW grad students in the area too. There’s also a lot of single professionals in their 30’s who live there and work at the bigger law firms or the big four accounting, or consultants, etc, making upwards of $100k a year. I know more than a few people in their 30’s and 40’s who lived in a 1 or 2 bedroom in RN for a long time while they slaved the hours away, unmarried, single, or moved in with the sig nif other. Especially if there’s a DINK income, it’s much much easier to live in a 1 or 2 bed, two peope n their 20’s making $60k a year is $120,000 and that’s a pretty nice lifestyle for a couple who splits expenses and lives downtown. Plenty of money for starbucks and dinners and have money left over. Its starts to get out of hand with the BMW’s that sit in the parking garages, or the trips to peru for vacay, and the new designer clothing, all the time, etc, then they start to pull out the credit cards. I think you’ll also find that a lot of them have higher credit card balances despite the higher incomes, at least I’ve garnered in my conversations with some of teh RN trixie 30’s 40s types. One commented to me the other day that she was just recently bailed out of credit card debt by a wealthy family member. but I digress
HD: I still don’t get it. Let’s say the equity investor is in default on the loan and there’s nothing left to negotiate, so the bank knows it’s going to get the keys back. Like the Block 37/Freed case. What happens then? How do they “go after the guarantee”? What do they end up getting?
In that case, we’re talking about a $10 million loan guarantee on a deal that more than $10 million out of balance. I thought I read that Dan McLean (just so people don’t think I picking on the jews) signed a $40 million loan guarantee on a totally busted condo deal. Do the banks actually get EVERYTHING these people have? Somehow, I doubt we’ll ever see either of these guys driving a Chevy around town. They still seem to hold onto the NS house and the Lexuses….right or wrong?
helmet: On a $40,000,000 personal guaranty (btw guaranty is with a ‘y’) there needs to be some planning and asset protection done well and long before signing. Assets get protected by such measures as retirement accounts, trusts, shell corporations, etc. That’s a level of planning that highly qualified boutiques and large law firms and accounting firms provide. That way when the deal goes sour, the creditors looks for assets and find nothing, and more importantly, find no fraudulent transfers of assets either. But then that begs the question whether you’d ever get the loan in first place if all your assets are protected, but I digress.
The banks in general do go looking for assets. And believe me, they go looking, the first thing they ask for when talking negotiation is a financial disclosure under oath. Keep in mind that during this bust, a lot of these debtors don’t have anything left, and they lose everything. A lot of these loans giving during the 2006-2008 time period were given to people who should have never gotten them in the first place. Many are not necessarily broke and in poverty, they still have connections, family money, protected assets, etc, but it’s not quite the same, and it is difficult to recover from. We have one builder we represented, who did a lot of high end stuff on the north shore, 7 figure homes, that got caught up in the bust, and they’re living a very subdued lifestyle. A spouse has dementia, there’s only protected retirement accounts, and the bank knows they’re chasing nothing but they’ve got files to paper up to prove there’s nothing there. There’s liens and such but with protections like tenancy by the entirety, the house is protected,
There are lots and lots of builders who’ve gone bust this time around, it’s extraoridnary how many people just got completely wiped out. Some will come back, many will not. Kimball Hill, the company that built my parent’s home, made it through every boom and bust except for this last one and in 2008 or so they went under.
I understand how you could think that sure, they’re not going to lose ‘everything’ and they don’t necessary lose ‘everything’ but life really slows down, and they do lose a lot, and life changes. They don’t have quite the same incomes to begin with and the banks take most of their assets.
These big homes on the north shore, I once heard someone say that the names on the mailboxes may change, but the wealth remains, and that’s true. Riches to rags happens and back, not so much for the 1%, but definitely for the 5%, because they can lose it all a lot easier.
helmet:
here’s an example of a 5 generation family that owned a furniture maker that went bust during this last recession
http://www.bizjournals.com/stlouis/print-edition/2011/07/08/lammerts-sell-millions-in-treasures.html?page=all
They lost everything on their personal guaranties, including the “Chippendale bureau table, circa 1765, which sold for almost $5.7 million.” They had all this stuff, and the bank went searching for assets and found them, and sold them at auction, even they couldn’t protect their assets sufficient.
You should know betters, banks are the most powerful force in this country. They’re the 1st estate. The politicians and the 1% who fund their campaigns are the second estate. But the banks, like louis the XIV, are the first estate, They own and run everything. They write the laws and enforce them. No escape.
Of all the bad things that tbtf banks have done, enforcing personal guarantees and finding collateral don’t seem that offensive to me. I feel sympathy for people who fall on hard times, but permit me to not really be too torn up because they lost their dresser that is worth more than almost everyone’s house because that bank, gasp, actually expected to be paid back.
Interesting example HD.
“Members of the Lammert family once owned Lammert’s Furniture and Gift Co., a furniture retailer founded in 1861 that grew to be a multimillion-dollar company with multiple locations before it closed in 2007.”
Boy, I’m sure PVTB and its CEO: “Mr. Larry D. Richman , 59, Chief Exec. Officer, Pres, Exec. Director, Member of Bus. Risk Committee, Chief Exec. Officer of The Privatebank – Chicago, Pres of The Privatebank – Chicago and Director of The Privatebank – Chicago” enjoyed putting the screws to that long-time American family. This same crowd whined and pulled all the troops however to claim that B of A was mistreating Joseph Freed on the Block 37 foreclosure! I don’t recall seeing any articles about PVTB putting the screws that deep into Chicago borrowers in default. That’s an amazing article. Be careful who you borrow from and do business with.
It’s amazing how many borrowers were willing to sign guaranties during the last boom.
http://www.chicagobusiness.com/article/20090221/ISSUE01/100031349/liening-on-mclean
I’ve been out of the loop when it comes to downtown prices but I just searched CL and these River North 1 BD are going for crazy prices. $2000+ for a 1BD in my opinion is OUTRAGEOUS. I don’t care if you make 90K+ it is not worth it. Spend that money on traveling, eating healthy foods, entertainment, etc. Stainless steel isn’t going to buy you happiness. Not by a long shot!
HD: Thanks for providing the article but I strongly disagree with your interpretation. The bank did not auction off borrower assets. The borrowers appear to have elected to raise cash by auctioning some of their valuable personal assets to tune of $6 mil in January, 2011. Private Bank received payment of $1.7 million in March 2011 (leaving balance due of $1 mil) and also received a 2004 Volvo S60 ($8K) & 4 valuable paintings owned by borrower (so what remained due PB?). Private alleges borrowers did not advise that they sold their furniture and claimed to still own it. I question whether borrower’s personal property is pledged to Private Bank? Presumably borrowers squirreled away some of the money between the $6 million in auction proceeds and the $1.7 it wired Private Bank pissing off PB once it figured it out. But borrower owed others too so maybe some or all of their missing $3+ mil was paid to other lenders.
homedelete…
one thing people can do is to MOVE THEIR MONEY out of Big Banks. I bank with North Community Bank and it is amazing. Ture customer service (they know my name), wave any overdraft fees, local, personal, etc. Really good stuff. When I lived in NY I had to bank with Chase and it was horrendous. As soon as I came back to Chi I went back to North Community. Small banks, regional banks, etc. are great. Yeah so what if their ATMs don’t “scan your check and deposit it automatically” they count where it matters.
HeilHofer if you were a shareholder would you want your banks management to give a defaulting borrower a pass because they were a long time American family (oh yeah the borrower did not have the misfortune of being born with a name that incites your bigotry huh?) While borrower personal financials show a ton of assets you’d be cool with your bank writing off the balance as just unfortunate to happen to good wasp borrowers from time to time huh?
Lastly DannyHofer in stating “let’s say the equity investor is in default on the loan” you misunderstand the way development deals are typically structured. The developer typically has the least real skin in the game (ie significant cash at risk other than potential risk of loan guaranty). The developer typically has found equity investors and/or mezzanine lenders who fund what is required above what a primary lender like PB or BofA will provide but who are not guarantors on the PB/ BofA loans. It may be amazing to you how many willing guarantors there were during “the last boom” but I am much more amazed by the many loans made to guarantors without significant net assets (other than imaginarily valued real estate) – there was no hope loans could be repaid unless that boom continued ad infinitum.
“HeilHofer if you were a shareholder would you want your banks management to give a defaulting borrower a pass…”
Again, you must have missed how the our-crowd crowd pulled out all the stops to try and paint B of A as the bad-guy on the Joseph Freed foreclosure of Block 37. They almost succeeded in pressuring B of A to give the borrower a special break, but in the end they foreclosed. McLean didn’t benefit from that kind of massive pressure, cheerleading and propaganda effort. I guess he had the misfortune of not being born into the crowd.
“you misunderstand the way development deals are typically structured. The developer typically has the least real skin in the game (ie significant cash at risk other than potential risk of loan guaranty). The developer typically has found equity investors and/or mezzanine lenders who fund what is required above what a primary lender like PB or BofA will provide but who are not guarantors on the PB/ BofA loans.”
I think we’re on the same page.
“It may be amazing to you how many willing guarantors there were during “the last boom” but I am much more amazed by the many loans made to guarantors without significant net assets (other than imaginarily valued real estate) – there was no hope loans could be repaid unless that boom continued ad infinitum.”
Good point.
Dann: Mclean is your kind of guy – he has lost numerous lawsuits because he screwed his friends/partners/investors royally and also screwed his customers, his subs & his lenders. (Funniest apocryphal story is when Maggie Daley called one morning to complain about her basement flooding in residence he built in S Loop and his ‘customer service’ department blew her off. Dan McL got religion about customer service in the afternoon once all his projects were shut down by city edict.) I hope you invest some of the money your broad minded brilliance has allowed you to accumulate with McL – he needs some good equity partners to get his cash flow machine up and running again. And hey with a name McAnything instead of Richman it’s all good for you huh?
Dann: I just read CCB article you linked to about Dan McLean and this comment to article says it all about McLean:
“Marianne C. wrote:
Mr. Dan McClean owes PIO WOOD WORKING INC., over $150,000 dollars for over a year. This is how small businesses go out of business and people loose jobs, homes, etc.
This great man has owed me this money for over a year and I may loose my home and business for people like him. How great of a man is he when he can not pay for materials installed and delivered to make his office new again.? Is this normal behavior? How great of a man is he when he steals from normal everyday people? Do you go buy products at the store and not pay for them? Do you go out to eat and not pay your bill? No, you would be aressted, so why not pay your bills Mr. Dan McClean?
I hope you are ashamed of your self Mr. Dan McClean, I would not show my face in public you should be embarressed. How does your wife feel about what a man you are? I would be mad if my husband did what you did.
Have a geat day and think about all the little people you have hurt.
God Bless You and give you the wisdom to know the difference between good and evil.
Remember the old saying: “Do unto others as you would have done to you”
I hope you take this upcoming Lent season to reflect on your lifestyle.
Thanks,
Marianne R. Caporale Faraone
Owners Wife”
Speaking of River North, anon(tfo) do you know whats going on with Jenner School? I was looking at zonings and that wierd part of cabrini around goose island is Jenner k-8 and Lincoln 9-12 but I read somewhere that Jenner was a property being sold by CPS?
” I read somewhere that Jenner was a property being sold by CPS?”
Had not heard that … had heard the (sort of) proposal to make Jenner “LaSalle” and make LaSalle into “Lincoln Elem South” (to deal with teh crticial overcrowding at Lincoln). Which has a ton of opposition, but is not an inherently terrible idea–except it leaves un-answered where the kids in the rowhouses and “public” parts of the new-con buildings would go as an attendance area school–don’t think that Jenner, as it exists, co-exists with a moved “LaSalle” in teh same building.
In any case, can’t believe that they would *sell* a nearly new school building. It *is* really, really under-enrolled, so something is going to change, and it very well may be a switch to a charter school. But that would almost certainly be a lease, rather than a sale.
Dann Dann: Since you won’t concede a McLean or a McAnybody is a scumbag I would like to state that IMO the Freed borrowers did not deserve BofA repeatedly dropping pianos on them just because Freed alleged BofA reneged on promises re restructuring loans on Block 37. Your talk about our-crowd crowd sticking up for apparently righteous people while no one would stick up for Danny Boyo McLean, as scummy a guy as there is in real estate (no small accomplishment there), is just more of your wrong, hate filled bigotry backed by bizzaro theories. Just my opinion.
Just noticed those above posts. I never stuck up for McLean. I just said that nobody stuck up for him. Freed also defaulted on loans and guarantees, yet “the crowd” in media, public comments, etc. came to rally for this guy who lied, defaulted, wasted taxpayers’ time, and didn’t honor his obligations and contrats, etc. I’m suggesting that good people shouldn’t take the sides of either of them when they are in blatant default of their contracts. That’s what I said, so you’re totally off base. I never stuck up for McLean, question is why so many of the crowd stick up for Freed? Because of his last name, they support him. I’m right about it, you’re not.
Anyway…..HD here are some comments from a Commerical RE atty. regarding personal guaranties. Will we see Sy driving a Chevy Malibu? Somehow I doubt it, lol.
Sy Taxman sued over loan guarantee on Forest Park project
Lawsuits seeking to collect on personal guarantees have become increasingly common since the recession, as more projects struggle and fewer loans are paid off, says Richard Traub, partner and co-head of the real estate and land use practice group at Chicago-based law firm Freeborn & Peters LLP. Lenders also usually have the option to file a foreclosure suit, allowing them to seize the property and recover the money by selling it.
While each case is different, Mr. Traub said lenders typically sue to collect on guarantees for one of three reasons: because it may be easier than foreclosure; because it serves as leverage at the negotiating table, or because they’re simply mad at the borrower. A lender that wins a judgment can pursue a borrower’s personal assets, whether it be a home or a stock portfolio.
“People don’t like to be sued on personal guarantees,” said Mr. Traub, who is not involved in the case. “Foreclosure — while painful — it’s more distant.”
Read more: http://www.chicagorealestatedaily.com/article/20121107/CRED03/121109800/sy-taxman-sued-over-loan-guarantee-on-forest-park-project#ixzz2BYuCIs3p
Your response is typically just more of your wrong, hate filled bigotry backed by bizzaro theories. Just my opinion. Taxman can pay or settle his guarantee without denting his net worth imo. (I bet reading that really pisses you off huh?) You are the one focusing on names – your post neglects to mention FirstMerit Bank is also suing co-guarantors Timothy Anderson and Timothy Hague but their names don’t support your bigoted hateful world view so you don’t ponder if they will drive Malibus. Dann Dann Dann – you are so not right. Your are wrong again and clearly clueless.
I didn’t say anything about any of the guys in the crain’s article. I only put that here because of the comments/quotes about personal guaranties from the lawyer. WTF are you talking about? “Sy Taxman sued over loan guarantee on Forest Park project” is the crain’s headline, go whine to them they didn’t include the two Tims. I only mentioned the crowd once, as it related to their circling the wagons for Freed, because of their bigoted nepotism, they couldn’t see the issue clearly. That’s what happened and you couldn’t prove me wrong anyway. PS If Sy Taxman has all this money, then why isn’t he honoring his written word and his contractual obligations? LOL, busted again.
You are such a loser. You lie so often you can’t remember even your recent lies. “”I didn’t say anything about any of the guys in the crain’s article.” a few minutes earlier “Will we see Sy driving a Chevy Malibu? Somehow I doubt it, lol.” Bust that ya a–hole
OK, listen you IQ-challenged moron.
I said above: “Somehow, I doubt we’ll ever see either of these guys driving a Chevy around town.”
That was about McLean and Freed.
I said it about Sy Taxman, because he’s on the Crain’s headline and his name is easy to remember compared to the two Timmys that you’d have to dig into the article to get and copy/paste. I only noticed the bigoted nepotism with regards to Freed. I never said anything about Sy Taxman in that regard. I didn’t say anything about Taxman that I didn’t also say about McLean. So, you’re wrong.
“Taxman can pay or settle his guarantee without denting his net worth imo.”
You know what? I actually agree with you. I’m sure he has some US dollars, shekels, and some gold bullion. Question then is: why is he in default, getting sued, and not curing his default and honoring his obligations and word? Hey, you can at least expect a bankrupt person to not be honorable. Can you explain why Mr. Taxman is being dishonorable and avoiding his guarantee? Only explanation would be he doesn’t care about being a shyster as long as nothing “dents his net worth”.
I am shocked you can spell moron correctly. I do not enjoy your ravings – self delude away you loser. I know what I read. The article states the lender extended development loan due date multiple times & most recent extension expired about 30 days ago. Reasonable borrowers certainly expect lenders to continue pattern of amend, extend & pretend. Danny Boyo McLean isn’t bringing certified checks to pay his balances within 30 days of his loan’s expirations but you continue to give Danny Boyo a pass as he is your paragon of virtue. I regret having fed you ya troll – just ignore this and try to be productive in your nastily negative little world.