CHICAGO: boom rundown - everything over 12 floors. v4

[Austinlee]

This picture is freaking awesome:


Alot of other cities would love to have that kind of residential density.

[BorisMolotov]

Too bad its ugly and all looks the same...

[pyropius]

It's not that bad, really. There ought to be a lower-end (relatively, anyway) segment of the high-rise residential market so it's not only the super-rich that can enjoy that kind of density.

[BorisMolotov]

You're right. With the exception of Grand Plaza (And a few smaller ones) they are actually kind of interesting. Its just that the Chicago's entire collection of this type of building is in this picture; if they spread these buildings out, I'm sure that they wouldn't recieve half the criticism they get (Again, with the exception of Grand Plaza.)

[SolarWind]

March 13, 2007

MoMo

[Mojava]

On this beautiful day in Chicago I walked by 600 N Fairbanks to look at the glass. This glass seems crystal clear. I'm concerned what this is going to look like from the outside once the units are occupied. With all of the different window treatments and shades this will look not so great. Anyone have thoughts on this?

[SolarWind]

Originally Posted by Mojava

On this beautiful day in Chicago I walked by 600 N Fairbanks to look at the glass. This glass seems crystal clear. I'm concerned what this is going to look like from the outside once the units are occupied. With all of the different window treatments and shades this will look not so great. Anyone have thoughts on this?

Yes, I agree. Spyguy raised the same concern. I guess we'll have to wait and see.

March 13, 2006

[wrab]

Originally Posted by Mojava

On this beautiful day in Chicago I walked by 600 N Fairbanks to look at the glass. This glass seems crystal clear. I'm concerned what this is going to look like from the outside once the units are occupied. With all of the different window treatments and shades this will look not so great. Anyone have thoughts on this?

Different shades/curtains could be very interesting, giving you a streetside overview of the presence & personality of individual condo units in what would otherwise be a unified exterior. It would be very honest, in the best Chicago style. Or, the condo association might impose unified color/material standards for the shades.

[Eventually...Chicago]

Originally Posted by pyropius

It's not that bad, really. There ought to be a lower-end (relatively, anyway) segment of the high-rise residential market so it's not only the super-rich that can enjoy that kind of density.

I totally agree. As much as we would like to see momo's & OMP's all over the place, there needs to be some vernacular. I would be more concerned if the marquee projects (trump, spire, 300 n. lasalle,...) were not impressive.

Besides the more intense land use becomes, the higher property values go, the more justification for marquee projects exists. (Higher property values require larger margins which can only happen at the high end) Perhaps this is why adrian smith "favored" new york's building movement to ours.

You just have to assume that developers are going to do the minimum they need to do to make money. So, lets make it expensive for them!

[HK Chicago]

With all of the different window treatments and shades this will look not so great. Anyone have thoughts on this?

This will look great.

[Marcu]

Originally Posted by Eventually...Chicago

(Higher property values require larger margins which can only happen at the high end)...
You just have to assume that developers are going to do the minimum they need to do to make money. So, lets make it expensive for them!

I don't think that's necessarily true. Margins have nothing to do with total cost. Driving up costs may cause developers to simply pass it along to the buyers. Especially considering housing is not very elastic.

[Dan in Chicago]

I changed 353 N Clark back to "approved" on Emporis. You doubters out there shook my belief in that caisson. Don't know if anyone's noticed, but there's another false caisson or tunnel shaft south of the Aqua site, where the future project is supposed to go. (This is in addition to the 2 false caissons at the Aqua site before construction started.)

[Tom Servo]

Originally Posted by Mojava

On this beautiful day in Chicago I walked by 600 N Fairbanks to look at the glass. This glass seems crystal clear. I'm concerned what this is going to look like from the outside once the units are occupied. With all of the different window treatments and shades this will look not so great. Anyone have thoughts on this?

I too am pretty about the glass. I think this'll turn out alright.

[Eventually...Chicago]

Originally Posted by Marcu

I don't think that's necessarily true. Margins have nothing to do with total cost. Driving up costs may cause developers to simply pass it along to the buyers. Especially considering housing is not very elastic.

Hey marcu, you do raise a good point and i had to think about it for awhile.

But i still am convinced that higher costs mean higher margins as developers are taking more risk, therefore require higher returns. I think this is especially true with property values as land acquisition costs are upfront and not part of construction financing, therefore are a tremendous liability. Considering developers don't develop many buildings at a time, they can't take advantage of economics of scale. So, how do they achieve greater return on a parcel that has great value? They build a higher quality building to command higher rents increasing their margins. So, while a city like new york is building only gucci's or prada's due to their land value, we are building mostly gap's & j.crew's. (with a gucci or prada thrown in every now and then!)

I'm not a finance/econ guy so i could be full of it!

[Nowhereman1280]

Originally Posted by Marcu

I don't think that's necessarily true. Margins have nothing to do with total cost. Driving up costs may cause developers to simply pass it along to the buyers. Especially considering housing is not very elastic.

Originally Posted by Eventually...Chicago

Hey marcu, you do raise a good point and i had to think about it for awhile.

But i still am convinced that higher costs mean higher margins as developers are taking more risk, therefore require higher returns. I think this is especially true with property values as land acquisition costs are upfront and not part of construction financing, therefore are a tremendous liability. Considering developers don't develop many buildings at a time, they can't take advantage of economics of scale. So, how do they achieve greater return on a parcel that has great value? They build a higher quality building to command higher rents increasing their margins. So, while a city like new york is building only gucci's or prada's due to their land value, we are building mostly gap's & j.crew's. (with a gucci or prada thrown in every now and then!)

I'm not a finance/econ guy so i could be full of it!

Actually that is not the case, housing, especially on the scale we are talking about, is extremely elastic. Just because something is a necessity does not mean it is not elastic, for example, look at water. Water is one of the most elastic products there is. The kind of housing we are talking about is a luxary and, as almost all luxaries are, is extremely elastic. This can easily be seen in through the fluxation in real estate prices due to economic conditions. People do not buy these condos cause they need them, they by them because they want them. Therefore one can assume that any attempt to pass on costs to the consumer would result in the inability to sell units. Again this can be seen though value engineering, they can't pass on the cost of thicker glass on Trump to the consumer, so they cut it.

[SolarWind]

March 9, 2007
Avenue East


The Fairbanks at Cityfront Plaza


March 13, 2007
Trump Tower & The Fairbanks at Cityfront Plaza


Avenue East & 550 St. Clair


The Tides


Parkview West

[sentinel]

SolarWind, can I nominate you to be President of SSP, or some such?? You are amazing.

[DANTHEDISCOMAN]

Originally Posted by wrabbit

Or, the condo association might impose unified color/material standards for the shades.

For sure. Almost all condos downtown with floor to ceiling windows dominating the facade enforce such measures, and the ones that don't ought to because they look like they are straight out of the ghetto.

There is a slight tint of greenish blue but I think the clearness is great and be really interesting at night for peeping Toms! (not me of course)

[SkokieSwift]

Originally Posted by sentinel

SolarWind, can I nominate you to be President of SSP, or some such?? You are amazing.

Agreed. I really appreciate that you give us wide shots that provide context. Close-ups of half-built frames and window panes are OK once in a while. But what's most exciting, at least for me, is to see these metal and concrete skeletons rising among their already-built neighbors, and getting a better sense of what the future skyline will look like.

[Marcu]

Originally Posted by Nowhereman1280

Actually that is not the case, housing, especially on the scale we are talking about, is extremely elastic. Just because something is a necessity does not mean it is not elastic, for example, look at water. Water is one of the most elastic products there is. The kind of housing we are talking about is a luxary and, as almost all luxaries are, is extremely elastic. This can easily be seen in through the fluxation in real estate prices due to economic conditions. People do not buy these condos cause they need them, they by them because they want them. Therefore one can assume that any attempt to pass on costs to the consumer would result in the inability to sell units. Again this can be seen though value engineering, they can't pass on the cost of thicker glass on Trump to the consumer, so they cut it.

Good point. You certainly thought the point through much better than I did.

Originally Posted by Eventually...Chicago
Hey marcu, you do raise a good point and i had to think about it for awhile.

But i still am convinced that higher costs mean higher margins as developers are taking more risk, therefore require higher returns. I think this is especially true with property values as land acquisition costs are upfront and not part of construction financing, therefore are a tremendous liability. Considering developers don't develop many buildings at a time, they can't take advantage of economics of scale. So, how do they achieve greater return on a parcel that has great value? They build a higher quality building to command higher rents increasing their margins. So, while a city like new york is building only gucci's or prada's due to their land value, we are building mostly gap's & j.crew's. (with a gucci or prada thrown in every now and then!)

I'm not a finance/econ guy so i could be full of it!

The thing about risk makes sense and you raise an interesting point. Although I see it evening out eventually since some of that risk inevitably results in a situation where the developer has to get rid of the condos asap and underprices the market. So It's true that the successful projects will have the higher margins. But overall and in the long-run it might not be the case.