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Old October 3rd, 2009, 07:26 PM   #9001
Onn
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Originally Posted by spectre000 View Post
Your the biggest optimist their is Onn, I'll give you that. But the Spire being built is all down to Shelbourne selling units. Plain and Simple. Luxury condo sales are completely dead in Chicago. No one is even buying units in the Trump tower and that tower is finished.
Well this is no ordinary condo project either, I wouldn't say it's dead.
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Old October 4th, 2009, 04:25 AM   #9002
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Why not The Spires switch to apartments or offices instead condos? Will that make any difference for any banks to be willing to finance this tower?
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Old October 4th, 2009, 04:44 AM   #9003
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Why not The Spires switch to apartments or offices instead condos? Will that make any difference for any banks to be willing to finance this tower?
When financing an apartment project, banks usually require anywhere from 25-50% of the cost in upfront cash. So Shelbourne would need around $400-750million. Then a bank would lend them the rest of the money. Before the credit crisis banks were doing construction loans where developers needed much less up-front cash.

Same kinda situation if they did this as an office tower, but you don't need cash, you would need a major company agreeing to be an anchor tenant.
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Old October 4th, 2009, 05:21 AM   #9004
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I had a meeting with someone at Jones Lang Lasalle in Chicago last week, and the Spire was brought up at that meeting. The folks at Jones Lang pretty much said it is dead. One guy said he doesn't expect to see construction on the site in his lifetime.

If it does restart, they are predicting at least 2 years between now and when construction restarts. The main issue is financing, and absolutely no one is willing to finance the project.
Well, which is it, dead or starting in two years ? These guys sound like they were blowing stuff out their a$$e$.
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Old October 4th, 2009, 02:51 PM   #9005
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Why not The Spires switch to apartments or offices instead condos? Will that make any difference for any banks to be willing to finance this tower?
Disregarding the issue of financing offices would probably not work because of parking issues. If even half the building was converted to office space the parking requirements would increase significantly and there's no place to put additional parking. Obviously this would not be an issue for apartments since the total number of people in the building would remain relatively the same.
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Old October 4th, 2009, 03:22 PM   #9006
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If it does restart, they are predicting at least 2 years between now and when construction restarts. The main issue is financing, and absolutely no one is willing to finance the project.
No one is willing to invest in any Chicago project at the moment. All the major lenders have blacklisted the city. That's why the Olympics were very important even if it was only a hail-Mary-pass attempt to save the city. Does anyone think the transit system or highways will be fixed now that there isn't an Olympics to garner much needed funds from the Feds?

Chicago can kiss that high speed rail idea goodbye too.
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Old October 4th, 2009, 08:06 PM   #9007
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Disregarding the issue of financing offices would probably not work because of parking issues. If even half the building was converted to office space the parking requirements would increase significantly and there's no place to put additional parking. Obviously this would not be an issue for apartments since the total number of people in the building would remain relatively the same.
An office tower would require less parking spaces. Most workers downtown commute via mass transit.
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Old October 4th, 2009, 08:39 PM   #9008
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I'm not very sure whether it really is gonna be built
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Old October 4th, 2009, 11:56 PM   #9009
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The general bone of contention is the securing of finance for this building.Once it is done the construction will kick off. The agonizing thing is that the economy is still getting through bad times.

I heard times without numbers that this building is not gonna be constructed and that's nothing new at all to me here.
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Old October 5th, 2009, 01:51 AM   #9010
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No, that was a few months-year ago. Many of the power-brokers on Wall Street that would be buying units like these have already regained much of what they lost in the recession. And banks have to start lending at some point, they could put togther a collection of smaller loans. The US economy is also expected to grow 4% in the second half of the year, and 5% next year.
You're in dreamland. Wall Street is in New York. Why would these "power-brokers" be interested in a multimillion dollar condo in fly-over country? And the U.S. economy will not grow 4% in the second half of the year. I think we'll be fortunate to avoid a double dip.

While losing the Olympics was not a serious blow to Chicago's long term reputation, you have to look at what Chicago's current reputation is and how, ironically, the bid process may have actually reinforced the negative stereotypes of the city that the 2016 backers were aiming to dispell. The 2016 Olympics was a chance to rebrand Chicago as a vital, growing global city. The bid process only caused the media to emphasize several of Chicago's weak points - its lack of natural beauty (comparing it unfavorably to Rio), its reputation for political corruption, and its huge crime problem in particular. Yes, the media happily obliged for over a year - pointing out each incident of gang violence, each murder spree, every political misstep, every sign of public discontent from the anti-Olympics groups with how the city was ignoring serious problems, every incident that somehow "proved" Chicago's deep-seated corruption and cronyism - to analyze how it might affect "the bid". And then, Obama's part in the Copenhagen fiasco, highlighted for over a week by the national right-wing media and talk shows, and Chicago's dismal last place finish tarnished the city even further.

What does this have to do with the Chicago Spire? Simply this: After the crash of 2008, the only hope the developers of this project had in succeeding was to promote and build on the atmosphere of optimism that the 2016 Olympics would have provided. A slim hope, yes. But their only chance. Don't dismiss the effect - buying real estate has always been as much (or more) about emotion as common sense. That's even more true at the upper end.

Think of ther international buyer explaining his or her purchase and getting the following response: "Buy a million dollar condo in Chicago? Chicago, that city that lost the Olympics to Rio because of its crime problem and poor financial backing? Chicago - that cold, flat city in flyover country that fancies itself an international destination because it was the first to build a ten-story "skyscraper"? You've got to be kidding me. That city is old news; boring. Why would you want to spend any time there?" Contrast that feeling to what might have been if Chicago had won the games.

But even factoring out emotion, with a glut of condos - including luxury units at half the price in Trump's tower nearby - no one in their right mind would buy into this thing (much less finance it) now that the perceived economic boost and infrastructure improvements the Olympics were to have brought to the city will not happen. And it will be a decade or more before the glut is sold and prices rebound to pre-crash levels.

Let's be honest and face it. The Chicago Spire is dead. It's only a matter of when it will be announced.

Last edited by DFDalton; October 5th, 2009 at 02:15 AM.
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Old October 6th, 2009, 12:23 AM   #9011
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You're in dreamland. Wall Street is in New York. Why would these "power-brokers" be interested in a multimillion dollar condo in fly-over country? And the U.S. economy will not grow 4% in the second half of the year. I think we'll be fortunate to avoid a double dip.
Who do you think will be buying the Spire units? Not your average Joe, but high brow investors. The economy could certainly grow 4% in the second half of the year, the economy has lost so much steam that it's going to come back with a little bit of a jolt. Alan Greenspan said on CNN yesterday that he's upgraded his econmic growth projections from 2.5% to 3% for the third quarter, and said growth could end up being even higher. I'm going to go with higher.

http://www.cnn.com/2009/POLITICS/10/...omy/index.html

Quote:
While losing the Olympics was not a serious blow to Chicago's long term reputation, you have to look at what Chicago's current reputation is and how, ironically, the bid process may have actually reinforced the negative stereotypes of the city that the 2016 backers were aiming to dispell. The 2016 Olympics was a chance to rebrand Chicago as a vital, growing global city. The bid process only caused the media to emphasize several of Chicago's weak points - its lack of natural beauty (comparing it unfavorably to Rio), its reputation for political corruption, and its huge crime problem in particular. Yes, the media happily obliged for over a year - pointing out each incident of gang violence, each murder spree, every political misstep, every sign of public discontent from the anti-Olympics groups with how the city was ignoring serious problems, every incident that somehow "proved" Chicago's deep-seated corruption and cronyism - to analyze how it might affect "the bid". And then, Obama's part in the Copenhagen fiasco, highlighted for over a week by the national right-wing media and talk shows, and Chicago's dismal last place finish tarnished the city even further.
Every other city in the world!

Quote:
Think of ther international buyer explaining his or her purchase and getting the following response: "Buy a million dollar condo in Chicago? Chicago, that city that lost the Olympics to Rio because of its crime problem and poor financial backing? Chicago - that cold, flat city in flyover country that fancies itself an international destination because it was the first to build a ten-story "skyscraper"? You've got to be kidding me. That city is old news; boring. Why would you want to spend any time there?" Contrast that feeling to what might have been if Chicago had won the games.
But none of those reasons are the reason Chicago lost to Rio, where's the logic there?

Quote:
But even factoring out emotion, with a glut of condos - including luxury units at half the price in Trump's tower nearby - no one in their right mind would buy into this thing (much less finance it) now that the perceived economic boost and infrastructure improvements the Olympics were to have brought to the city will not happen. And it will be a decade or more before the glut is sold and prices rebound to pre-crash levels.
You don't know that!

Quote:
Let's be honest and face it. The Chicago Spire is dead. It's only a matter of when it will be announced.
It would have been announced already if it was dead! The fact that it hasn't been cancelled yet means that Shelbourne is all the more the determined to build it.

Last edited by Onn; October 6th, 2009 at 01:05 AM.
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Old October 6th, 2009, 12:38 AM   #9012
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Unfortunately, now I see the reason for closing this thread every once in a while.

The Spire's fate is tied to the Olympics - really?

Major lenders have blacklisted a city of nearly 10 million and there won't be any big transit projects - what?

It'd be great if people who have no idea what they are talking about remained silent or discussed the recent news articles.
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Old October 6th, 2009, 12:39 AM   #9013
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Well said. If the spire was dead, it would be already. Personally I really hope it continues since I plan on buying a place there or in the Trump in about 5 years. The olympics was a letdown for sure, but I still think there is a significant chance.


BTW, whats wrong with discussing possible outcomes for the spire on this thread? It's useless to post any new photos of the empty construction site at the moment but this is a good place to find any articles people find and post.
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Old October 6th, 2009, 01:30 AM   #9014
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Unfortunately, now I see the reason for closing this thread every once in a while.

The Spire's fate is tied to the Olympics - really?
In the boom climate it was conceived and born under, no. But in this economic downturn, with real estate values having crashed so hard, and with glut of unsold downtown luxury condo units as a result, the microscopically slim prospects for this project can be severely impacted by such intangibles.

A win for Chicago wouldn't necessarily have guaranteed that Kelleher would move forward. Far from it. But I believe the Olympic loss damaged the prospects for this project's continuation profoundly.

No one who has the guts and will to start such a project is going to give up easily. Kelleher was hanging on for a year, waiting for the Olympic announcement to see how it might change the current situation. He may very well take some time to reassess the situation now before jumping to conclusions. But ultimately I don't think what he'll find is going to be promising either in terms of unit sales, in terms of the rising cost of materials in the coming years, or in banks' willingness to finance construction.

It may be just a short time before Kelleher is forced to cut his losses and concede defeat.
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Old October 6th, 2009, 03:22 AM   #9015
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.

No one who has the guts and will to start such a project is going to give up easily. Kelleher was hanging on for a year, waiting for the Olympic announcement to see how it might change the current situation. He may very well take some time to reassess the situation now before jumping to conclusions. But ultimately I don't think what he'll find is going to be promising either in terms of unit sales, in terms of the rising cost of materials in the coming years, or in banks' willingness to finance construction.

It may be just a short time before Kelleher is forced to cut his losses and concede defeat.
Losses? Do you know how large Shelbourne is? He could hold on to the site for years, especially considering there is already millions of dollars worth of foundations in place. It's not like there are developers clawing for the site either, and taxes are not going to bankrupt them.
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Old October 6th, 2009, 06:14 AM   #9016
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Losses? Do you know how large Shelbourne is? He could hold on to the site for years, especially considering there is already millions of dollars worth of foundations in place. It's not like there are developers clawing for the site either, and taxes are not going to bankrupt them.
It doesn't matter if Kelleher has $100 million into the foundation works. Whatever the figure is, it's a sunk cost. What matters is how much he stands to gain or lose by his future actions. If he builds 2 million square feet at $2000/sq ft and can only sell at $1200/sq ft (which is about as high as Chicago condo space has ever sold for) he is better off bailing now, regardless of the foundation cost.

I just don't think there is anyone who can rationalize this thing as financially viable in this city in these economic conditions. It's 7 levels of underground parking, a supertall with an unusual design, and must be spec'ed out to the highest level of quality - much higher than the Trump Tower. It needs to sell well over $1000/sq ft because it most certainly will cost well over that to build. I don't see it happening.
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Old October 6th, 2009, 07:46 AM   #9017
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It doesn't matter if Kelleher has $100 million into the foundation works. Whatever the figure is, it's a sunk cost. What matters is how much he stands to gain or lose by his future actions. If he builds 2 million square feet at $2000/sq ft and can only sell at $1200/sq ft (which is about as high as Chicago condo space has ever sold for) he is better off bailing now, regardless of the foundation cost.

I just don't think there is anyone who can rationalize this thing as financially viable in this city in these economic conditions. It's 7 levels of underground parking, a supertall with an unusual design, and must be spec'ed out to the highest level of quality - much higher than the Trump Tower. It needs to sell well over $1000/sq ft because it most certainly will cost well over that to build. I don't see it happening.
You clearly don't want this building built.
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Old October 6th, 2009, 08:36 AM   #9018
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Why can't some billionaire with money to spare give the money to finance this building?

I mean, if Oprah loves Chicago so much..
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Old October 6th, 2009, 08:48 AM   #9019
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I prefer to be a realist. I never assumed that Chicago was a shoe-in for the 2016 Games either. So I wasn't bitterly disappointed. I would keep your enthusiam for this project in check so you don't fall into deep depression if and when it fails.

I think the design itself is beautiful. The location is not all that great (a structure this tall should not be right on the lake) and the building doesn't really scream "Chicago" to me. In fact, I feel the unusual design and scale of the building detracts from the skyline, which is one of the most perfect in the world. It makes Chicago take on the appearance of a city like Toronto or Seattle, where a single tall icon overpowers and defines the skyline. Such cities tend to look smaller than they are as a result. I prefer a skyline to be a perfect arrangment and synergy of dozens of talls like Hong Kong, New York, or Chicago in its present state.

A 1500ft version of the Chicago Spire would actually work better. There's nothing magical about 2000 feet - there are already taller buildings in the world.
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Old October 6th, 2009, 08:53 AM   #9020
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All of that is made moot by the fact that eventually buildings will be built in Chicago that are between the height of the Willis Tower and the Chicago Spire, making the Spire's impact less dramatic, if that even matters.

And I disagree about the location. I think a tower like the Chicago Spire *should* have a front and center spot in the skyline.
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