Trump Tower Update: Stuck at 75% Sales
The Trump family was in town yesterday to celebrate the topping off of Trump Tower Chicago, at 401 N. Wabash, in River North. As usual, The Donald was nothing but outspoken about the state of the Chicago housing market.
From Crain’s:
“From a high-end perspective, Chicago may be one of the worst (condo) markets” in the country, Mr. Trump said.
That’s a bold statement given what’s going on in Florida and Las Vegas.
According to Crain’s, only 75% of the condo units have sold in the building- about the same number of sales that were reported 2 years ago. Closings on the condo tower started recently.
Though condo sales at the project have been scarce, the good news is that buyers who signed contracts a few years ago are showing up at the closing table. About 20 buyers have already closed on their residential condos since Aug. 1, and only two have walked away from their contracts, Mr. Trump said.
Trump is also asking to extend repayment of his construction loans, which he is saying is a perfectly normal occurrence:
As a result, the developer plans to extend the project’s construction loans, which come due in a few months, the younger Mr. Trump said, declining to provide a specific date. The developer financed the project at 401 N. Wabash Ave. with $770 million in loans from Deutsche Bank and Fortress Investment Group LLC.
It’s not unusual for a developer to extend a construction loan, especially in today’s slow market, and Mr. Trump said “we had projected to do that anyway.” The developer has also hired a broker to sell the project’s 83,000 square feet of retail space, which could raise money to pay down the construction loans.
Trump to ask for later loan due date [Crain’s Sep 24, 2008]
With the demise of Waterview Tower across the river, I am willing to bet that both Trump and the Spire will now see a nice increase in their sales…
There are many equally nice buildings for far less per sqft. Hence, this building is likely to struggle until the economic engine starts chugging again. I am also not a big fan of owning in a building with a hotel.
It would appear that construction stopped at the Spire.
Ask Paulson to buy the remaining, I hear he is about to get a lil’ bit of free money…
Very pretty building… Silly price increase from initial offering which will have to come off. Beautiful building though. Great color at the right time of day.
Construction at the Spire has not stopped, they are gearing up for the next phase, so there has been a slow down in activity on the site.
As for Trump vs. other equally nice buildings, which ones are you talking about? The buyer for a building like Trump is also concerned with status and now that Waterview is out, and the 65% of their sales, I bet more than a few of them will migrate to Trump or the Spire.
Chump Towers.
I don’t think Spire will be built. Trump is a nice building but depends what you want. Personally, I prefer 55 E Erie, Palmolive, or 73 E Walton (conversion of office part of mall there).
Jason R,
When projects ‘gear up for the next phase’ activity typically doesn’t slow. I think the Spire is stalling trying to get more sales before they proceed. I too have my doubts it will be built.
Jason R – I dont think Waterviews demise will create sales for Trump or the Spire. Most of their buyers/investors bought in early at price points of about $500-600/sf. Trump is at $1000/sf and the Sprire $2000/sf. As for the Spires construction delay, they were quoted is last weeks suntime saying so…
http://www.suntimes.com/business/1172700,CST-FIN-tick19.article
“Turmoil in the credit markets will cause unspecified delays in the construction of the 150-story Chicago Spire, said a spokeswoman for the developer.
Kim Metcalfe said underground utility work at the site, 400 N. Lake Shore Drive, will continue but that the pace will slacken until the market improves.
I realize that many buyers at Waterview Tower got in early, but they were still making sales as of July 2008, in the $750/sqft range.
JL–what’s bad about buying a condo in a place that also has a hotel? Just over-amenitized?
****JL–what’s bad about buying a condo in a place that also has a hotel? Just over-amenitized?****
Ya, I’d opine that you’re overpaying for room service, concierge, spa, etc….which have very high sunk and marginal costs.
seriously even if you had a limitless bank account, you can only eat so much room service….and you’re likely to already have your own hair stylist/spa/gym/etc. as opposed the default in-house option.
Though a hotel concierge would be a great hook-up to get hard-to-find-at-any-price tickets, access, 411.
if your building has a hotel, a lot of your neighbors are tourists. the more tourists, the more high priced tourist traps and the less useful neighborhood businesses.
my understanding is that waterview is not dead yet, just on hold until funding is approved. They haven’t refunded initial investors have they?
Re: Waterview:
Current rumor is that the condo portion is dead. They’ll finish the hotel (28 stories total, including parking) and that’s it.
I think building amenities are neat and I do take an interest in a projects amenities, however in all cases it seems the amenities are grossly overpriced relative to what you can get the amenities for at a nice health club/gym.
Workout room, pool, spa, sauna, steam room, etc seem to add several hundred dollars to monthly assessments. My monthly gym membership is $75 and it has all of that. I never have understood why these amenities cost so much more if they are bundled with the unit.
Streeterville Realtor,
Why do you think the Spire won’t happen? What will they put there instead?
I hope we won’t be left with a hole in the ground for years to come…
Trump’s statements regarding the future of supersized buildings and the high-end condo market are about as close as Trump will come to admitting that he made a HUGE MISTAKE building this place.
But I agree with him that the era of oversized buildings might be over. I love them. They’re gorgeous and exciting and have given us the most beautiful skyline in the world. But they are massive energy guzzlers on a per/sq ft basis compared to smaller buildings, and are horrible to evacuate in the event of an emergency. They require all kinds of backups and redundant systems and armies of highly trained personnel to operate them.
I think the Spire won’t be built because nobody will finance it. This has been the problem all along. The developer says he has financing but won’t disclose any specifics. What bank would want to sign on for something like this at this point in the credit crisis?
Kentworthy,
The chaos and transient nature of being in a hotel are deterrents. No matter how much money you have, the price per sqft is ridiculous relative to the price of other high end buildings (270 E Pearson, 340 E Randolph).
If a person moves from Chicago to a city in Indiana, one might be able to buy a home for $200 per sqft that would cost $500 per sqft in Chicago. It does not necessary mean that the person received a good value because the prevailing rate in the new city might be $150 per sqft so you overpaid. The same thought process holds for the Spire relative to the remainder of Chicago. For an international investor picking up the currency benefit from Euro or Pound to Dollar, a price of $2,000 per sqft might not seem high on the surface.
“Trump’s statements regarding the future of supersized buildings and the high-end condo market are about as close as Trump will come to admitting that he made a HUGE MISTAKE building this place. ”
I think he made a huge mistake screwing the original buyers, and increasing prices after the contracts were signed.
Nice addition to Chicago skyline- Would be nice to see the pricing come down to earth. at 500-700 sq ft it would sell out quickly
Spire is dead, the architects stopped working on it. The construction site currently has zero activity. The dream is over, and now the hangover begins….. All the ultra-wealthy with the deep pockets are now feeling the effects of the downturn in the economny too. Their was a recent article in the WSJ which touched on this topic.
At trump we will see what happens to the pricing. The smaller units will probably be hurt the most. Those million dollar 1-Bedroom units have living room so small you cannot fit a dining room table in them. Luxury is more that nice finishes in a shoebox size apartment, Luxury is also larger rooms, quality of space, etc.
Trump endorsed McCain yesterday. Will buyers care? Seems an odd move since it might turn off people who do not share his views.
““From a high-end perspective, Chicago may be one of the worst (condo) markets” in the country, Mr. Trump said.”
No one asked this *sshole to invest here. An now he blames others for his mess.
What’s the name of the high rise that is south of the city, but looks kind of like the Trump tower? (Meaning really, really tall; multi-levels, silver)? It was just recently completed. It is really beautiful; I always admire it on LSD while driving home towards Hyde Park.
I think you’re talking about One Museum Park. We’ve chattered about it a few times.
Thanks, Sabrina. I’ll check the archives to read about it.
Does anyone know the price history in Trump Chicago?
Here is one for a little over 800/sqft
http://chicago.craigslist.org/chc/reb/889425712.html
Here is one for about 775/sqft
http://chicago.craigslist.org/chc/reo/886880320.html
Are things coming down here?
Investor: Tom Feddor at Keller Williams has one of the listings and I believe he has posted here before (not on the Trump building however.) Perhaps he can enlighten us.
Prices appear to be coming down. I beleive that units were selling in the +900.00/sqft. range a couple of years ago. Soon everyone will enjoy the friends and family pricing that was given to insiders at project launch.
“Jason R on September 25th, 2008 at 7:16 am
With the demise of Waterview Tower across the river, I am willing to bet that both Trump and the Spire will now see a nice increase in their sales…”
How did that bet work out for you?