Real Estate Archives

The latest twist in the drama on State Street involves a Lettuce Entertain You venture.

New reports show the housing market could be nearing the end of a devastating three-year slide. Find out if your neighborhood is making a comeback and what could be around the corner for local real estate.

The "for lease" sign has become a familiar sight at Chicago-area shopping centers. The vacancy rate is at a 30-year high, and rents are falling. A recovery may not come until 2012, but local experts say the market is showing some signs of improvement.

Armitage Avenue used to be one of the hottest shopping areas in town. But now vacant storefronts line the street where boutiques used to thrive. We talk to local businesses and analyze the downfall of the renowned street.

There is one month left until the popular first-time home buyer tax credit expires. Did the latest extension continue to boost home sales? We sat down with the co-founder of @properties to get answers.

The amount of distressed commercial real estate in Chicago totals $7.5 billion, and office space makes up the majority of this number. With unemployment at a 27-year high, the office space market might get worse before it gets better.

Many banks that own foreclosed pieces of land in exurban Chicago are selling them at rock bottom prices to get the struggling assets off the books. We talk with one southwest suburban farmer who sold high, bought low, and now may profit from selling his own farm -- twice.

The landmark Allerton Hotel is the latest downtown property to enter financial distress. Learn whether it will go into foreclosure and if there are more delinquent hotels on the horizon.

While most spec builders closed shop after the real estate bust, there are some who continued building multimillion-dollar homes. We visit the site of one of the homes and talk to the spec builder who says he's at the forefront of a market turnaround.

Since fall 2008, Willis Tower has secured several new tenants and overcome a popularity slump to regain its lure as the building of choice in the West Loop. We take a look at how the tower's leasing office has put a shine back on the Chicago icon.

Construction starts will increase by double digits this year, according to a new report. It's a big improvement over last year's record decline, but the value of the projects is still a far cry from its peak. We talk to a local contractor about the struggles and successes he expects in 2010.

According to a new report, the Chicago-area housing market won't recover until 2013, and the industry will look vastly different from the boom years of the last decade. We'll tell you what will be happening to home values, ownership and industry jobs in the years ahead.

Chicago home sales are showing signs of life, but is it a real rebound? We take a look at what's fueling sales and what could hold them back.

Developer Marty Paris is planning a huge, multi-tower retail and residential complex for Uptown's lakefront. But before he builds, he must secure leases, as well as win over neighbors.

The industrial vacancy rate is the highest its been in nearly 20 years. This is creating great deals for renters, but it's also a sign that the local economy is struggling to recover.

Target may lease two floors in the historic Carson Pirie Scott building. This would be a big win for developer Joseph Freed and Associates, as well as for the State Street shopping scene.

The downtown real estate market has been hit hard, and mixed-income redevelopments are no exception.  Mayor Daley has stepped in recently to ensure the survival of one high-rise project in the Cabrini-Green neighborhood.

Vacancies are up, rents are down. Building sales are few and far between. What will 2010 bring for the commercial real estate market?

John Buck Co. has hired the former president of Chicago's Olympic bid committee as the blue-chip developer looks to drum up more public-sector business.

Lori Healey will start next week as a principal at Chicago-based Buck, where she'll focus on building the firm's pipeline of public sector projects, which hasn't suffered as poorly in the recession as other commercial real estate market sectors.

Ms. Healey, 50, would seem tailor-made for the job. She knows real estate, having worked for a major architecture firm before rejoining city government in 2005. She has worked as Mayor Richard Daley's chief of staff and later as president of Chicago 2016, the city's Olympic bid committee.

Spire developer Garrett Kelleher is still looking for funding after a potential deal with some local labor union investment funds falls apart. Lisa talks with Crain's senior reporter Eddie Baeb about the prospects for what would be North America's tallest building.

Hotelier Ian Schrager finds a local investor to help him buy the landmark Ambassador East Hotel and its famed Pump Room.

The owner of the Hotel Burnham is facing a $37-million foreclosure suit as it tries to restructure the loan on the Loop hotel, which is no longer generating enough cash flow to cover interest payments.

Bank of America N.A. last week sued an ownership group including local developers Dan McCaffery and E. Barry Mansur, who converted the Daniel Burnham-designed office building into a hotel in the late 1990s.

The venture defaulted on a $36-million loan after it stopped making monthly interest payments starting in July, according to the complaint, filed in Cook County Circuit Court.

2009 was a dismal year for the commerical restate estate market. 2010 is not looking much better. The office vacancy rate is expected to hit levels not seen in two decades and rents are poised to drop even further.

Chicago has long been dominated by smaller, independent local builders. Now that many of them have filed for bankruptcy or face foreclosure, big national players are moving in on the scene and snapping up cheap suburban land to grow their companies.

Joseph Freed & Associates LLC will be stripped of control of Block 37.

A Cook County judge on Friday ruled to appoint a receiver to take over the project, where an underground pedway and a handful of retailers are to open this month.

Judge Margaret Brennan agreed to grant Bank of America Corp.'s request to appoint CB Richard Ellis Inc. as receiver.

B of A, Freed's primary lender on Block 37, last month filed a $128-million foreclosure lawsuit against the project, saying Freed had defaulted due to cost overruns and that the developer didn't have sufficient money to keep the loan in balance or complete the project.

How bad is the local housing market?

So bad that even the Home Builders Assn. of Greater Chicago has filed for bankruptcy protection.

Unable to pay its bills, the Rolling Meadows trade group filed for Chapter 11 protection Friday, nearly four years into a severe industry slump that has put many its members out of business.

The Home Builders has about 500 members today, down from 1,500 at the peak, says William Factor, the group's bankruptcy attorney.

While battling foreclosure at Block 37, Chicago real estate developer Joseph Freed & Associates LLC is trying to avoid another black eye as it revamps the landmark Carson Pirie Scott & Co. building just down State Street.

Since Carson's closed in February 2007, the building, rechristened Sullivan Center, has only one retail tenant, a small restaurant. More than a dozen contractors have filed liens for unpaid bills, and a $172-million construction loan comes due this spring.

Read the latest from Monday's print edition of Crain's Chicago Business. 

After months of negotiations with its lender, the developer of the Elysian Hotel & Private Residences has scrapped a plan to sell the project's 188 hotel suites as condominiums, removing a cloud of uncertainty over the new $280-million Gold Coast high-rise.

The decision to drop the condo-hotel structure sets up the luxury hotel at 11 E. Walton St. for an early December opening, about five months later than planned. And it averts a potential headache for its developer amid signs that some hotel unit buyers, unable to get financing, would try to back out at closing time and possibly sue to negate their contracts.

At the peak of the real estate boom, the condo-hotel was one of the hottest investment ideas in the country, allowing hotel developers to secure construction financing by shifting their risk onto individual investors, who could occupy their units or have them rented out. But the idea quickly fizzled, and just two downtown condo-hotel projects remain: the Trump International Hotel & Tower and the Raffaello, 175-room boutique hotel in Streeterville.

The dead may breathe new life into the Three Arts Club in the Gold Coast.

Once a 110-room dormitory for women artists, the landmark building could become a permanent home to the cremated remains of as many as 15,000 people.

That plan, put forth by a group of investors led by Chicago architect Bill Bickford, is a novel one for a property revered by preservationists and once coveted by condominium and hotel developers -- until the real estate market collapsed.

A deal for a Muvico movie theater at Block 37 is in jeopardy after Bank of America Corp. "improperly" refused to approve revised lease terms for the upscale movie theater, according to the developer's response to the lender's foreclosure lawsuit.

Chicago developer Joseph Freed & Associates LLC entities said in court filings Monday that B of A doesn't have the right to foreclose on the project or have a receiver put in charge of the downtown mall that's to open next month.

Freed contends that the foreclosure lawsuit, filed Oct. 19 by Charlotte, N.C.-based B of A, came soon after the developer refused to sign a waiver of the bank's conduct with respect to the lease with Muvico -- the largest tenant and a key top-floor anchor in the 280,000-square-foot project.

John Buck is playing a behind-the-scenes role in the financial drama unfolding at Block 37, a job that could give the real estate mogul the inside track if the project's lender decides to bring in a new developer.

Sources say Block 37 lender Bank of America N.A. hired Mr. Buck's firm last spring as an adviser on the star-crossed downtown shopping mall, which faces an uncertain future after the bank filed a $128-million foreclosure suit last week -- less than a month before its planned opening.

Unless developer Joseph Freed & Associates LLC agrees to put more money in the project, which is about $34 million over budget, Bank of America could oust it in favor of a developer that will.

That could provide an opening for John Buck Co., which has the experience, financial resources and now, the familiarity with the development to take it over if asked.

English developer Bill Davies has completed his acquisition of Chicago's Old Main Post Office, roughly two months after he agreed to pay $40 million for the property at auction.

Sources say Mr. Davies renegotiated a lower price for the nearly 3-million-square-foot structure that straddles Congress Parkway downtown at 433 W. Van Buren St. But that new amount could not be determined.

The deal closed Wednesday.

Mr. Davies was supposed to close the transaction on Oct. 10 but his firm, International Property Developers North America Inc., and the postal service were unable to reach an agreement on issues regarding the property's eventual redevelopment.

A group of lenders led by Bank of America has filed a foreclosure lawsuit against Block 37, the mixed-use project under construction in the heart of the Loop, a spokeswoman for developer Joseph Freed & Associates LLC confirms.

In a statement, Freed blasted the lawsuit, calling the complaint "a serious breach of trust with the people of the city of Chicago" and said it would "fight it vigorously."

A copy of the complaint could not immediately be obtained, and a spokeswoman for the bank could not immediately be reached for comment.

Borders Group Inc. has struck a deal to keep its North Michigan Avenue store open another year, until Jan. 2011.

The beleaguered book retail chain in February announced that it would close its long-time store at 830 N. Michigan Ave., saying the store had been falling short of the company's profit goals.

A company spokeswoman on Wednesday said the retailer and its landlord, the British Broadcasting Corp.'s retirement fund, recently came to terms on a one-year lease extension.

The owner of NBC Tower has sued to evict Irish developer Garrett Kelleher's firm from the riverfront skyscraper, where Shelbourne Development Group Inc. has a lavish sales center for the stalled Chicago Spire project.

If Shelbourne is evicted, the firm could lose much of its $10-million investment in the sales center, which includes a fully built-out model, conference rooms and meeting areas.

Read the rest of the story on Crain's ChicagoRealEstateDaily.com.

ShoreBank has filed a foreclosure suit to collect about $1.3 million on the Harold Washington Cultural Center in Bronzeville, casting doubt about the future of the non-profit community center that has long been the controversial pet project of former Alderman Dorothy Tillman.

Making matters worse, the Daley administration says Tobacco Road Inc., the group that runs the center, has violated the terms of $7.7 million in public grants used to finance construction of the facility, where Ms. Tillman's daughter, Jimalita Tillman, is the executive director.

Find out more on this story from Crain's ChicagoRealEstateDaily.com. 

Developers and businesses in Chicago fear they could be on the hook for millions of dollars when they want to replace a parking space with a driveway or a loading zone.

The reason: Mayor Richard M. Daley's controversial $1.16-billion deal to privatize the city's parking meters requires that whenever a metered parking space is eliminated, somebody has to pay for it -- and if it's not business, it likely will be Chicago drivers.

Read more about this expensive situation from this week's Crain's.

With the real estate market in the tank, even City Hall, which can barely rub two nickels together, is hunting for deals. Crain's Tom Corfman has learned that the city is trying to to buy the building at Monroe and Clark that's famous for its weather bell -- which is a bell that changes colors as the temperature fluctuates.

Here's the scoop.

When it comes to housing, people are thinking smaller these days.

For some, that means buying a home with less square footage than they dreamed of just a few years ago. For others, it's about adjusting their expectations of what's next: They are staying in a smaller space for a while longer or delaying buying a home altogether.

After decades of watching the size of new homes expand, residential architects say sizes are shrinking.

Check out our Business of Life cover story this week for more.

Loews Hotels has walked away from an agreement to build a high-end hotel as part of the Block 37 development, despite getting the site for $1, dealing another blow to a downtown project dogged by decades of delays and other setbacks.

Loews follows Apple Computer Inc. and the David Barton health club chain in snubbing the star-crossed project at State and Randolph.

Read more about how the retail part of this infamous block continues to struggle.

Prudential Preferred Properties is buying Rubloff Residential, combining two of the city's biggest residential brokerages. It's the third big brokerage deal this year -- as the housing crash pushes these guys into each others' arms. It's not as sweet as it sounds. Lots more in our story. 

Among the many bad guys behind the housing boom/bust were appraisers, who too often signed off on inflated home values. Now we've got new rules aimed at producing tougher and more accurate appraisals. But Realtors say the rules go too far. Here's the story:

A unit of billionaire Warren Buffett's investment firm Berkshire Hathaway Inc. has acquired Koenig & Strey GMAC Real Estate, one of the Chicago area's largest residential real estate firms.

Wilmette-based Koenig & Strey has been rumored to be for sale for some time, but the recession and declining housing market made finding a buyer more difficult. The firm, which will retain its name, had been owned by Brookfield Residential Property Services.

Read more about it.

Sometime today, in a hotel out in Rosemont, bidding will begin on the Old Main Post Office, the hulking dump in the Southwest Loop that's been empty for a decade. Crain's Lisa Leiter spoke to the auctioneer (sporting a really pretty and expensive-looking tie), a broker and an architect about the potential buyers, the hurdles they face -- and the potential that this star-crossed space still holds. 

You can barely give away a condo downtown, but landlords are sitting pretty. Thanks to a devastated housing market and a lousy job market, more Chicagoans are renting. But renters can take heart: the supply/demand equation may shift in their favor soon. 

Lots of gloomy news out of Lincoln Park today, although we're talking about real estate, not muggers.

First, the developer who bought the old Lincoln Park Hospital site, in hopes of building houses and retail space on that primo Webster/Lincoln corner, is facing foreclosure.

And the owners of Lakeshore Athletic Club, at Fullerton and Southport, have missed two mortgage payments. The owners aren't talking, but coming just three months after they closed the Streeterville location, it can't be a good sign.

Get all your Lincoln Park doom and gloom at Chicago Real Estate Daily.

Photo from ricklevin.com

One of the biggest real estate auctions in Chicago history starts Thursday, when the U.S. Postal Service will try to auction off its Old Main Post Office - the hulking, empty building that sits astride Congress Parkway, and which has been vacant for more than 10 years. Chicago Real Estate Daily has the story.

In the last decade a lot of plans have been floated for the 3-million-square-foot behemoth -- casinos, auto malls and water parks have been proposed -- but nothing has come to fruition. The highest and best use of the place in that time: a cameo in the Dark Knight.

Bids will start at just $300,000. It'll be interesting to see who buys it and what they have planned for one of the city's most intractable tracts.

Chicago-area home sales continued to improve in July - posting a sixth-straight monthly gain and - more importantly - the first year-over-year increase in more than three years, according to the Illinois Assn. of Realtors.

But is the housing market out of the woods? Read our story.