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  #2801  
Old Posted Oct 8, 2014, 2:38 PM
SamInTheLoop SamInTheLoop is offline
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There's an awful long way to go before we could actually even contemplate the Spire starting up again, but I'll say this - if Kelleher manages to stay involved in this project/land parcel by next summer, and Related hasn't taken over, than hats off to him, because that would be some insane perserverance.....
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  #2802  
Old Posted Oct 8, 2014, 6:12 PM
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Originally Posted by Ryanrule View Post
there is a lot of desire for people external from the city/country for this tower to go away.
This is a bizarre comment.
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  #2803  
Old Posted Oct 8, 2014, 6:38 PM
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Originally Posted by Onn View Post
I would consider the Spire among an elite group of skyscraper proposals in the world. And that's because of it's sure old-school elegance, almost romantic aesthetics. The only other towers I would compare to the Spire to in the world today are the Empire State Building, the Chrysler building, and the Eiffel Tower. Of course, those projects were thought of as crazy at the time too.
Reviewing the posted articles, my sense is that the play being made here by these various investor groups is for control of the site (brilliant insight, right?) and whether that is worth $135 million or whatever. My guess is the appraisal is relating the value of the most feasible use for the site and whatever existing site work has been completed. It's amazing, Chicago is one of only a two or three cities in North America where a slightly improved site could fetch $135 million.

But it is doubtful the appraisal is related to potential build-out of a 2000 foot condo tower. The likelihood is that that is not the optimal use of the site at this point simply because Kelleher conceived of that idea at the height of once-every-seventy-years financing bubble.

If willing to acquire control of the site at $135 million +/-, an investor obviously believes alot of big Chicago-style stuff can be built profitably there. It does not mean specifically the Spire as originally conceived, obviously. I imagine the new controlling investors will clear the slate and consider the optimal development approach: possibly, but not necessarily, the Spire.

I don't think the "elite proposal" factor Onn suggests above has any bearing on the calculated decisions of cold-eyed Wall Street opportunists.

I'd also guess that Kelleher will be kicked to the curb as soon as possible by whoever gains control of the site.
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  #2804  
Old Posted Oct 8, 2014, 8:33 PM
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Originally Posted by Cro Burnham View Post
Reviewing the posted articles, my sense is that the play being made here by these various investor groups is for control of the site (brilliant insight, right?) and whether that is worth $135 million or whatever. My guess is the appraisal is relating the value of the most feasible use for the site and whatever existing site work has been completed. It's amazing, Chicago is one of only a two or three cities in North America where a slightly improved site could fetch $135 million.

But it is doubtful the appraisal is related to potential build-out of a 2000 foot condo tower. The likelihood is that that is not the optimal use of the site at this point simply because Kelleher conceived of that idea at the height of once-every-seventy-years financing bubble.

If willing to acquire control of the site at $135 million +/-, an investor obviously believes alot of big Chicago-style stuff can be built profitably there. It does not mean specifically the Spire as originally conceived, obviously. I imagine the new controlling investors will clear the slate and consider the optimal development approach: possibly, but not necessarily, the Spire.

I don't think the "elite proposal" factor Onn suggests above has any bearing on the calculated decisions of cold-eyed Wall Street opportunists.

I'd also guess that Kelleher will be kicked to the curb as soon as possible by whoever gains control of the site.
Kelleher is seeking control of the site, not various investors. Now Kelleher and the investors will have a deal to make of course, the investors are going to want money back. However getting that money back could be 5 or 10 years down the line, investors think long term. They're not thinking about the foreseeable future, and they know Kelleher will have plenty of time to complete the project within whatever time frame they hammer out.

The site is likely worth more than $135 million (in fact Shelbourne said they really only needed $125 million, the agreement with Atlas includes another $10 million, probably for future costs). The site is likely worth more than its current price because it is a very unique waterfront site with construction already done on it. Second Related got the site at a rock bottom price because of the bankruptcy. It's likely worth over $200 million, so even if Kelleher is out of bankruptcy but still can't complete the Spire project in a number of years from now and has to sell the site...he would likely still have enough to pay off the investors some time from now. Worst case scenario.

I think the Spire will be built as originally conceived. Three big reasons for this!

1.) The global million/billionaire market Kelleher seeks to buy/rent units in the Spire does in fact exist. Right now because of a weak global economy their willing to invest in property in US cities. This includes property investors from the US, Europe, Russia, The Middles East, Latin America, and China. The first time the Spire went on the market it sold over 300 units in a short period of time, what crashed the project was the worst financial crisis since the Great Depression, one particularly focused on property. Not happening this time. Just like in projects in New York City, global high-end investors will have a prime interest in the Spire project when asked. They know investments in the building would be good even before it is built, Chicago has a strong strengthening real estate market.

2.) Just as important (perhaps more important) is that Kelleher has partnered with Atlas this time around, which is actually a Chicago based real estate company. This was a smart move on Kelleher's part in my opinion. Atlas has apparently done multiple high-rise projects in Chicago and the South Loop, according to the Chicago Tribune. Because they're from Chicago, already taking on multiple projects, they know the lay of the land probably better than Shelbourne from Ireland does. They know what kind of investors or bankers would be interested in funding in Chicago, where to get the investors for the Spire. They know how to market the project to both locals and international buyers. They know what kind advertising to put together and pricing for the units. This is one of the reasons I think Kelleher has an even better chance of building the project than back in 2008. From a Chicago perspective Atlas has the potential to get this done.

3.) Chicago has a substantial luxury real estate market. Maybe not on the level of New York City, but the demand is there from both national and international buyers. Right now there is only a limited number of luxury residential spaces available in the city. Yes the Spire is a big project, the city should be able to absorb the space though. The downtown area of Chicago grew like leaps and bounds during the 2000s, that expansion will continue as time goes on. The Spire may seem a little overkill right now, it might not a decade from now. That gives funders incentive because they know the units in the Spire will be bought or filled eventually. Also, because 500 of the units are being rented with the Atlas deal, they don't even have to worry about those right now. They can rent those out at a lower rate than the rest of the tower, then gradually raise rents over time. Eventually some of those renters may want to buy their units.

I don't think its inconceivable that the project will be built at all. There's not much holding it down once they get past the legal issue. I think someone will put up financing for it. Some of it may come from an international lender, but Chicago is a global city. I would expect that. Things may not take off right away but the process is already moving faster than some people expected.

Last edited by Onn; Oct 8, 2014 at 10:41 PM.
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  #2805  
Old Posted Oct 9, 2014, 2:14 PM
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Originally Posted by Onn View Post
I think the Spire will be built as originally conceived. Three big reasons for this!

1.) The global million/billionaire market Kelleher seeks to buy/rent units in the Spire does in fact exist. Right now because of a weak global economy their willing to invest in property in US cities. This includes property investors from the US, Europe, Russia, The Middles East, Latin America, and China. The first time the Spire went on the market it sold over 300 units in a short period of time, what crashed the project was the worst financial crisis since the Great Depression, one particularly focused on property. Not happening this time. Just like in projects in New York City, global high-end investors will have a prime interest in the Spire project when asked. They know investments in the building would be good even before it is built, Chicago has a strong strengthening real estate market.
I sure hope you are right. I certainly don't think Chicago is a place where the super rich and powerful choose to live in, unless they made their money here. People actively choose to take their fortunes to places like New York, Miami, and Los Angeles. I don't see much of that here. I would love for that to be the case.

But seeing that 300 units were sold gives me some hope. If you create a building and a view like nothing else out there it can really sway some folks.
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  #2806  
Old Posted Oct 9, 2014, 2:28 PM
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Originally Posted by Onn View Post
Kelleher is seeking control of the site, not various investors. Now Kelleher and the investors will have a deal to make of course, the investors are going to want money back. . . .
Opportunistic Wall Street RE investors are going to want the project that delivers the best combination of risk and return with a realistic and marketable exit strategy. In all honesty, that is most likely not a 2000 foot super luxury tower targeted to Arab, Russian, and Chinese billionaires.

Kelleher may push for completion of this concept, but the I doubt the money players really give a shit. And they will have the control. It is highly doubtful they are going to turn over their fortunes to a brash guy whose brashness could be said to have partially bankrupted Ireland.
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  #2807  
Old Posted Oct 9, 2014, 3:28 PM
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Originally Posted by TSSTaylor View Post
I sure hope you are right. I certainly don't think Chicago is a place where the super rich and powerful choose to live in, unless they made their money here. People actively choose to take their fortunes to places like New York, Miami, and Los Angeles. I don't see much of that here. I would love for that to be the case.

But seeing that 300 units were sold gives me some hope. If you create a building and a view like nothing else out there it can really sway some folks.
I don't think they would intend to live here. Just like many of those luxury condos in NYC or Miami that pretty much sit empty most of the time. It's about the investment.

Plus, lets not forget about Kelleher's secret weapon:



How can you say 'no' to this guy?
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  #2808  
Old Posted Oct 9, 2014, 3:30 PM
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Originally Posted by Cro Burnham View Post
Opportunistic Wall Street RE investors are going to want the project that delivers the best combination of risk and return with a realistic and marketable exit strategy. In all honesty, that is most likely not a 2000 foot super luxury tower targeted to Arab, Russian, and Chinese billionaires.
That would be the Spire project buddy. Yes, it could very likely be a 2,000 foot luxury tower. As investors know, the more they risk the more rewards they could have to reap. The luxury market in Chicago is capable of supporting the project if the project is globally marketed. Just like the first time.


Quote:
Kelleher may push for completion of this concept, but the I doubt the money players really give a shit. And they will have the control. It is highly doubtful they are going to turn over their fortunes to a brash guy whose brashness could be said to have partially bankrupted Ireland.
The project and Ireland were both brought down by the worst financial crisis since the Great Depression. Sounds like sour grapes. It's not just Kelleher here it's also Atlas...which has already made a commitment to 500 units, or half the building. How are they going to take away half the building and still build it?
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  #2809  
Old Posted Oct 9, 2014, 3:55 PM
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Earlier stories mentioned that Atlas may be interested in having a mix of apartments and condos. I think some story mentioned 400 apartment units.

I don't think anyone would try to bring 1,200 condos to the market right now. That was a different time and different market. I wouldn't be surprised if the Spire ended up with an Aqua combination - Hotel/Apartments/Condos.

Shangri La and Mandarin Hotels were lined up and ready to take a large chunk of space in a mixed-use building before the crash. The Spire seems like a good opportunity if either hotel is still interested in the Chicago market.

The developer could also make a killing on an observation deck and restaurant at the top. The John Hancock observation deck sold for $40 million.

The Spire will be different because the market is different. I hope it is the same height, but what’s inside will not be the same.
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  #2810  
Old Posted Oct 9, 2014, 4:07 PM
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Yes I belevie so, there is not a market for that many condos but I do beleive they can sell condos, and apartments.

As well as the hotel this would make some design changes though to the base of the tower. A observation deckwould also be awesome.
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  #2811  
Old Posted Oct 9, 2014, 4:15 PM
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Kelleher plan to build 150-storey Chicago tower back on track

The Irish Times
9 October 2014
Tom Lyon

...

Mr Kelleher, who was in court, said Atlas was “absolutely” the right partner to allow him to finally build the Spire.

He said much of the work had been done, [but] much more remained. “It was always going to be a bit of a drill,” he admitted. “This will be an incredible come back,” a source who knows the developer said. “Garrett is 100 per cent determined to do it.”
http://www.irishtimes.com/business/s...rack-1.1956782
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  #2812  
Old Posted Oct 9, 2014, 4:31 PM
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Nice. Hopefully we will see some activity on site soon.
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  #2813  
Old Posted Oct 9, 2014, 4:53 PM
LouisVanDerWright LouisVanDerWright is online now
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Originally Posted by the urban politician View Post
It's about the investment.
It's actually all about the money laundering. These billionaires all come from countries where the population periodically revolts and kills all the pseudo royalty throughout history. They all need to a place to dump their ill gotten gains that they can flee to on their private jet when the time comes to bail. They have immense quantities of wealth, but it is incredibly illiquid until they can find a way to get it out of their country. What a better way to do that than to comingle those funds with the wealth of other billionaires and invest in obscenely valuable luxury RE? Just read up on One Hyde Park in London, something like 78% of the units have no identifiable human owner and are held by an untraceable web of trusts and companies.
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  #2814  
Old Posted Oct 9, 2014, 5:09 PM
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Originally Posted by LouisVanDerWright View Post
It's actually all about the money laundering. These billionaires all come from countries where the population periodically revolts and kills all the pseudo royalty throughout history. They all need to a place to dump their ill gotten gains that they can flee to on their private jet when the time comes to bail. They have immense quantities of wealth, but it is incredibly illiquid until they can find a way to get it out of their country. What a better way to do that than to comingle those funds with the wealth of other billionaires and invest in obscenely valuable luxury RE? Just read up on One Hyde Park in London, something like 78% of the units have no identifiable human owner and are held by an untraceable web of trusts and companies.
That might sometimes be true, but that doesn't fully explain all the supertall projects in New York lately. Many locals have actually bought into the towers. Of course the list also includes a Chinese mom buying a unit for her young daughter and a Canadian fashion tycoon.

Some buyers in One57: http://therealdeal.com/issues_articles/one57s-big-buys/

By the way, both One57 (last heard 70% sold) and 432 Park (last heard 90% sold) are on the way to selling 100% of their units. Not to mention the countless other projects in New York doing well like 56 Leonard and 30 Park Place.
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  #2815  
Old Posted Oct 9, 2014, 5:14 PM
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^^^ If it were all illegitimate money, then the scheme wouldn't work. The idea is if you get enough big money in one place, then it is really easy to slide not so legit big money in and out of the project. If I'm a Russian billionaire and I secretly buy into a NYC condo project and then sell a few years later to someone else who is completely legitimate for $100 million, then I now have a $100 million pile of completely legit cash if I properly report it and pay my taxes. Real Estate is a great way to launder huge amounts of money because it is so valuable and appreciates and depreciates so rapidly. It's very hard to prove where any of it came from if I bought something and it appreciates and then I sell it. Once the money has been in one legitimate transaction, then it is difficult to determine it's origins before that transaction. So you need legitimate buyers and sellers in these buildings who don't care where the money is coming from or going to so the illegitimate money can be washed clean.
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  #2816  
Old Posted Oct 9, 2014, 5:28 PM
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Originally Posted by LouisVanDerWright View Post
^^^ If it were all illegitimate money, then the scheme wouldn't work. The idea is if you get enough big money in one place, then it is really easy to slide not so legit big money in and out of the project. If I'm a Russian billionaire and I secretly buy into a NYC condo project and then sell a few years later to someone else who is completely legitimate for $100 million, then I now have a $100 million pile of completely legit cash if I properly report it and pay my taxes. Real Estate is a great way to launder huge amounts of money because it is so valuable and appreciates and depreciates so rapidly. It's very hard to prove where any of it came from if I bought something and it appreciates and then I sell it. Once the money has been in one legitimate transaction, then it is difficult to determine it's origins before that transaction. So you need legitimate buyers and sellers in these buildings who don't care where the money is coming from or going to so the illegitimate money can be washed clean.
There are probably some cases of this, but the projects aren't really being done with the idea of attracting illegal money. I don't see Barnett out there inviting illegal money into his projects, although I doubt he asks tons of questions where the money is coming from. And so, we don't want Russian money in our buildings? Do you honestly think those kind of investors don't feel safer having their money in the US than some economically sketchy foreign country? Some of these investors would be investing in Europe right now, but Europe's economy isn't doing as well as the US's has been.

The Spire is the kind of project that would interest global investors right now.
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  #2817  
Old Posted Oct 9, 2014, 5:33 PM
LouisVanDerWright LouisVanDerWright is online now
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^^^ I'm not saying the money is "illegal" and I'm certainly not saying that we should care who is buying these units. What I am saying is that this is the reality of the situation and how these things work. I think the Spire has a good shot at rising despite the hurdles before it. IF the Spire gets built, I would not be surprised to see a flood of global money follow it into this city and end up funding a handful more similar large, ultra luxury towers. The global money hasn't discovered Chicago yet and I think that's largely got to do with the excess supply of land here. If one big ultraluxury tower gets built, I would expect that to change things a bit.


PS, I saw a bunch of cars and trucks parked on the Spire ramp yesterday, does anyone know what that's all about?
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  #2818  
Old Posted Oct 9, 2014, 5:38 PM
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Originally Posted by LouisVanDerWright View Post
PS, I saw a bunch of cars and trucks parked on the Spire ramp yesterday, does anyone know what that's all about?
The appraising of the site perhaps? It was said to have to be done quickly because of the time constraints for the deal. I don't know though.
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  #2819  
Old Posted Oct 9, 2014, 5:55 PM
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Originally Posted by Onn View Post
That would be the Spire project buddy. Yes, it could very likely be a 2,000 foot luxury tower. As investors know, the more they risk the more rewards they could have to reap.
Sigh . . . vast oversimplification. Increased risk does not necessarily lead to greater potential return. Some risk is just idiotic, like unnecessary additional risk taken when less risk can yield equivalent returns. The original Spire will likely not be pursued if it is determined that a project with a lesser risk profile can generate comparable or better returns. There are probably multiple project configurations that would meet such criteria.

The original configuration might be optimal, but to say that with your unremittant assuredness, as though it were an established fact, is just silly.

Your optimism is irritatingly charming, but you, for undecipherable reasons, are pitching Kelleher and the project's revival as though you were personally invested and as though forum readers were a bunch of clueless ponzi-scheme dupes.

My sour grapes result from people like you using unsubstantiated, meaningless marketing-speak gibberish to blindly promote a pretty far out idea as though it were completely ordinary. Your approach disregards the intelligence of most forum partcipants and is kind of, I guess, neurotic bordering on outright strange. You'd be well advised to come to terms with reality. The likelihood is that you will be disappointed.

Quote:
The project and Ireland were both brought down by the worst financial crisis since the Great Depression . . . . .
. . . . because of wild speculation by people like Kelleher and firms like Anglo-Irish. I don't believe the guy has a lot of credibility. But he is shamelessly ballsy that's for sure.
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  #2820  
Old Posted Oct 9, 2014, 6:09 PM
Chi-Sky21 Chi-Sky21 is offline
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Originally Posted by Cro Burnham View Post
My sour grapes result from people like you using unsubstantiated, meaningless marketing-speak gibberish to blindly promote a pretty far out idea as though it were completely ordinary. Your approach disregards the intelligence of most forum partcipants and is kind of, I guess, neurotic bordering on outright strange. You'd be well advised to come to terms with reality. The likelihood is that you will be disappointed.

.
Strange that so many people were so neurotic that they originally sold 300 units in the building and got started on this project in the 1st place. Sooooooo....maybe it is not quiet as far fetched as you may suggest.
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