Sales Stall at Trump Tower Chicago
The Donald and his condo buildings are featured in an article in Friday’s Wall Street Journal called “Stalled Condo Projects Tarnish Trump’s Name.” You would think the Chicago project wouldn’t be included in the article, as Trump Tower Chicago, slated to open the hotel portion of the building in only a few weeks, is rising triumphantly along the Chicago River.
But, alas, you would be wrong. Trump Tower Chicago is being built, but sales have been less than stellar.
Meantime, a Fort Lauderdale, Fla., tower with Mr. Trump’s name on it was put on hold indefinitely last month, and a West Palm Beach project could be put on the shelf shortly. Construction on a Trump Tower in Toronto is just getting under way after years of delays and a reduction in height. And at Trump Tower Chicago, a hotel and condo project set to be the second tallest building in the city after the Sears Tower, 30% of the 825 units remain unsold as the condo market there slows.
For anyone as bad in math as I am- that is 247 condos that still need to be sold. And that is at some of the highest price points in the city.
But maybe I’m also missing something else here. Wasn’t the building 80% sold a year ago? Then, a few months ago, when The Donald came to town to cheerlead for the building and drum up some interest, he said it was 75% sold. And now, it is only 70% sold.
Which is it?
Don’t tell me that The Donald isn’t feeling the sting of the sales slowdown. At an average price of $1 million per unit (and that’s on the low end)- that’s $250 million that he can’t lay his hands on to pay off those construction loans. (Trump Tower Chicago is one of the rare buildings he’s actually heavily invested in. He didn’t just license his name on it as he did in other cities.)
Just this week, as reported here, developers for the Mandarin Oriental were saying their similar hotel/condo luxury building would be built. Yet sales there are only at 50%. Trump is at 70%. Waterview Tower, on Wacker, is not much better off. The last I checked, the Ritz on Michigan Avenue was only at 30% to 40% sold.
Trump may get a boost when the hotel portion of the building opens shortly. The building has some buzz.
Forgive me if I fear for the sales at The Spire (already under construction next to Lake Shore Drive.)
This is what the “Donald” deserves after he decides to renegotiate prices or buy back units from the people who bought early into the project. Why take the risk of buying something if he can and just buy it back from you at the original price and resell it. Every developer has this option in their contract, but I think he is the only one I have heard of who actually used it. So why take the risk of buying a 700K+ unit when if it has good appreciation, the devloper can buy it back at my contract price. We take all the risk and he can take the profits.
Who would ever buy early into his next project?
Condo Investor: Do you know where the lawsuit on those units stand? Is the Donald standing firm on invoking the clause? I would be surprised at that, given the lack of sales in the building. You’d think he’d want as many buyers to close as possible.