I think the building will probably be reprogrammed to include a hotel and rental being that both are hot markets currently and Atlas Apartments appears to be a rental company. The rest of the units not will have four to five years before they are delivered to sale by that time the condo market could have a resurgence.....
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http://chicago.cbslocal.com/2014/02/...raper-project/ the spire may be back guys!!!!!!
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oh im late lol nvm....
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Given the size of the building, if the 550 lowest units were taken by Atlas and the unit counts per floor were roughly consistent throughout the tower, that means the entire bottom 1/3 of the building would be apartments. That means the condo units wouldn't even start until 650-800' above the ground. I have a feeling units above that line would sell like hotcakes even in today's market even if they are a little pricier than any potential competing towers that might crop up. |
70,000 units - Atlas is huge. I've never heard of them, but then again I'm a real estate development n00b
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LVDW - good point. That's a ton of units. Looks like Atlas wants to bet heavily on this project.
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RE: Spire. . .
Money Pit? Someone had to say it. . . . . . |
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550 units might sound like a big bet to most people, but that's a drop in the bucket when your portfolio is 70,000 units. Some quick, back of the envelope, development math: Let's assume the price per key that Atlas is using is $500,000 (not unreasonable since Parc Huron sold for like $485k/key a while back and this is a way more awesome building). They are likely planning on using an approximately 50% equity, 50% debt mix on a project like this since that is the going expectation by banks for riskier projects like this right now. So we assume the total valuation for it's apartment units that Atlas is operating on is: 550 X $500,000 = $247,500,000 Of that 50% is equity so Atlas would have to contribute about $125,000,000 to be lent against with another $125,000,000. Which is pretty damn close to the number they are throwing down to recapitalize the project. HOWEVER, I think the $500,000/key assumption is probably fairly low and probably closer to $750,000/key which means Atlas will probably have to contribute another $50,000,000+ in equity to the project on top of that. That also assumes Atlas does not have a stake in the condo portion which of course would completely change the game since they would be required to front even more equity. What makes me nervous is that you have to run some pretty high per key prices to even come close to the approximately $1,000,000,000 it will take to finish this thing. I suppose the good news is that commodity and labor prices have fallen significantly since the boom and this is probably only a billion dollar project after accounting for the work that has already been done instead of a $1.5-1.75 billion project like it was in 2008 during the commodity bubble. Regardless Kellher is going to need more oomph than the announced recapitalization with Atlas to get this done. I estimate he will need another $400-500 million in equity to get it done. Maybe he is working the unions again to try to get them to plow some pension money into the project like they were considering a while ago. |
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A bold endeavor but I'm hopeful.
Better get Liam on the horn: http://images.starpulse.com/pictures...MTO-004565.jpg |
Allow me to simplify that, LVDW...
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You are an asset to the forum. Thanks for running the numbers. |
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Maybe a dumb question... what does this mean as far as Related's bid for the site? Who's in the driver seat now?
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I saw what you did there;) #1 all the way
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I think Atlas might be buying the Related owned debt so Related might be out of the picture soon. They may end up being a partner also???...........This is going to be very interesting to watch unfold this summer. The plan has to be submitted in August it looks like. |
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Really, this is a large amount of money even for a lakefront lot in downtown Chicago, so no matter what happens I can't imagine something really damn large and dense won't happen at this site whether it's the Chicago Spire or some large tower built by somebody else who eventually 'gets a hold of' the title. * $20 million to build a new sales center, hiring local and international marketing staff, rehiring Liam Neeson ( ;) ), putting up some equity, etc etc... |
If they do move forward on the Spire, I have they make a minor adjustment to make it a little better. Maybe something like this...
http://ic.pics.livejournal.com/saboy...0_original.jpg |
HomrQT, I have always liked that version of the building the most.
Damn, I can't believe we're talking about the Spire again. Now you see, this is wrong. First it started getting built, we all got excited, then the recession happened, some hope lingered, but then we all accepted that this project was dead. But now there is this glimmer of hope, but you can't be sure. This is the ultimate tease. |
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