CHICAGO | 1000M (1000 S Michigan) | 805 FT | 73 FLOORS

[Kumdogmillionaire]

[QUOTE=the urban politician;8148592]^ How is 6 units per month slow sales velocity?

6 units per month for a 323 unit building, in a market where that rate is all but guaranteed to drop off to an even slower rate is abysmal. If they can keep up their current rate they would hit 80% occupancy by May 2022. If the rate drops to 3 a month, they would take until 2026.

I just don't see how they can hope to make money with loans piling up interest as they fail to pay them back on time and as advertising continues to burn a hole in their pocket. They've spent millions on ads alone and not a ounce of dirt has been moved.

[pip]

Originally Posted by Bonsai Tree

That number seems about right. It says new condo sales which could be the reason for the low number. Also, it depends on what their definition of downtown is. I bet it's only the loop, south loop, and river north. They probably excluded the West Loop which has seen a ton of new condo sales. The city hasn't seen much condo growth since the recession, so this doesn't seem very far off.

Thanks for the explanation. Just wow, to those low numbers! Will Chicago's Condo market recover before the next recession? We are going on 8+ years of economic recovery now.

[Vlajos]

Originally Posted by pip

Thanks for the explanation. Just wow, to those low numbers! Will Chicago's Condo market recover before the next recession? We are going on 8+ years of economic recovery now.

I think you mean downtown new condo market. There are plenty of condos trading all over the city including downtown.

[Fvn]

Are there other cases of buildings that went through a similar situation as this one did? And did they end up actually getting built or did they get canceled/have construction stall? Because honestly, that's the only vibe I continue to get from this project; something is gonna go wrong down the line.

Originally Posted by Kumdogmillionaire

They've spent millions on ads alone and not a ounce of dirt has been moved.

15 postholes!!!

[pip]

Originally Posted by Vlajos

I think you mean downtown new condo market. There are plenty of condos trading all over the city including downtown.

Haha yeah I was referring to the new downtown condo market. That's still really low numbers in my mind though. Still Chicago's overall condo market has not recovered from the past recession.

[LouisVanDerWright]

Typically you only need 33% sold for construction financing so they are 33% of the way to groundbreaking...

[Vlajos]

Originally Posted by pip

Haha yeah I was referring to the new downtown condo market. That's still really low numbers in my mind though. Still Chicago's overall condo market has not recovered from the past recession.

Definitely low numbers for downtown. The total numbers for the city are strong though.

[pip]

^I hope so. Do you have those numbers by any chance?

[Vlajos]

Originally Posted by LouisVanDerWright

Typically you only need 33% sold for construction financing so they are 33% of the way to groundbreaking...

This one may require 50% though. Those smaller buildings you see in neighborhoods will require less pre sales or even no presales

[Vlajos]

Originally Posted by pip

^I hope so. Do you have those numbers by any chance?

Illinois realtor association has them. There were only a few years during the height of the craziness of the 2000s that have higher sales.

The problem now is that there is very little inventory on the market.

[left of center]

Originally Posted by pip

Thanks for the explanation. Just wow, to those low numbers! Will Chicago's Condo market recover before the next recession? We are going on 8+ years of economic recovery now.

From my understanding, most new units coming online downtown have been rentals, with condos being stronger in the neighborhoods; although apartments still dominate in the neighborhoods as well. Declining home ownership rates is a nationwide phenomenon.

[marothisu]

Originally Posted by left of center

From my understanding, most new units coming online downtown have been rentals, with condos being stronger in the neighborhoods; although apartments still dominate in the neighborhoods as well. Declining home ownership rates is a nationwide phenomenon.

Yeah - there are a good number of 2-4 unit small condo buildings that have been built in various neighborhoods (Lakeview, Ukrainian Village, Logan Square, Bucktown, etc) in the last large handful of years as I've been tracking.

[the urban politician]

[QUOTE=Kumdogmillionaire;8148674]

Originally Posted by the urban politician

^ How is 6 units per month slow sales velocity?

6 units per month for a 323 unit building, in a market where that rate is all but guaranteed to drop off to an even slower rate is abysmal. If they can keep up their current rate they would hit 80% occupancy by May 2022. If the rate drops to 3 a month, they would take until 2026.

I just don't see how they can hope to make money with loans piling up interest as they fail to pay them back on time and as advertising continues to burn a hole in their pocket. They've spent millions on ads alone and not a ounce of dirt has been moved.

Understood, but how are sales rates “all but guaranteed to drop off”?

The Trump Tower took YEARS to finally sell out. I think we have to refine our expectations here. These aren’t $300,000 condos were talking about here. These will sell slowly

[The Best Forumer]

I agree... as long as they are sold....

[MakeChicagoGreatAgai]

[QUOTE=the urban politician;8148968]

Originally Posted by Kumdogmillionaire

Understood, but how are sales rates “all but guaranteed to drop off”?

The Trump Tower took YEARS to finally sell out. I think we have to refine our expectations here. These aren’t $300,000 condos were talking about here. These will sell slowly

Sales are likely to slow because the fed is raising rates. We've had 4 rate increases last year and we'll probably get another 4 increases this year and that trend is likely to continue until the fed crashes the housing market. 6 units/month = 54 months to sell out. If their goal is 1/2 sold before they break ground, we're looking at another two years before that happens at the current pace! This project is toast if sales do not speed up and that is very unlikely in a rising rate environment.

[Kumdogmillionaire]

Adding to the issue with increased interest rates and an economy that is slowing to a halt, people are going to start backing out of contracts if they don't see the building start construction in the next year. They'll take the 30k penalty or whatever it is specifically for this building and just buy somewhere else

[Stunnies23]

[QUOTE=MakeChicagoGreatAgai;8149233]

Originally Posted by the urban politician

Sales are likely to slow because the fed is raising rates. We've had 4 rate increases last year and we'll probably get another 4 increases this year and that trend is likely to continue until the fed crashes the housing market. 6 units/month = 54 months to sell out. If their goal is 1/2 sold before they break ground, we're looking at another two years before that happens at the current pace! This project is toast if sales do not speed up and that is very unlikely in a rising rate environment.

Some of your statement is factually incorrect. We had 3 rate hikes in 2017. CME futures are 50/50 on whether we will have a total of 3 or 4 rate hikes in 2018. The idea the fed is going to crash the housing market is just false. We will not see a 2008 replay due to a variety of factors.

[Kumdogmillionaire]

[QUOTE=Stunnies23;8149268]

Originally Posted by MakeChicagoGreatAgai

Some of your statement is factually incorrect. We had 3 rate hikes in 2017. CME futures are 50/50 on whether we will have a total of 3 or 4 rate hikes in 2018. The idea the fed is going to crash the housing market is just false. We will not see a 2008 replay due to a variety of factors.

The reason they are raising rates is to avoid a crash... What are you even saying? He isn't saying the market will crash, he's saying increased rates will slow the market... which is as close to scientific fact as it gets in economics.

[rgolch]

Does anyone know the price ranges for these units.....

There definitely are some tempting units on the website in terms of design and size, but price per square foot would really be the telling factor on what types of buyers they're targeting. For the typical well to do empty nester in their mid to late 50's looking to move back into the city.... I'd image most of them want to be north of the river, and steps from north Michigan ave. That's why I believe the Tribune tower addition and One Chicago square won't have the same slowness of sales like this building is experiencing.

[marothisu]

Originally Posted by rgolch

Does anyone know the price ranges for these units.....

There definitely are some tempting units on the website in terms of design and size, but price per square foot would really be the telling factor on what types of buyers they're targeting. For the typical well to do empty nester in their mid to late 50's looking to move back into the city.... I'd image most of them want to be north of the river, and steps from north Michigan ave. That's why I believe the Tribune tower addition and One Chicago square won't have the same slowness of sales like this building is experiencing.

There's a pretty wide range of prices on this page from moderately expensive to very expensive (Chicago standards)

http://www.goldcoastrealty-chicago.c...s-for-sale.php