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Old November 20th, 2008, 10:06 PM   #461
MikeAR303
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Anyone heard anything about this one lately?
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Old December 2nd, 2008, 09:21 PM   #462
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Put a fork in it?
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Old December 2nd, 2008, 10:51 PM   #463
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..

Last edited by Loopy; May 19th, 2010 at 03:36 AM.
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Old December 3rd, 2008, 08:47 AM   #464
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Quote:
Originally Posted by Loopy View Post
Yes, it is pretty much dead as a project.

However, the developer is not bankrupt and there are no foreclosures or liens on the project as far as I know. So, in my opinion, there is a slim chance this one could come back to life if our 2016 Olympic bid wins out.
Not to mention, they were able to secure a decent amount of contracts before the market tanked. I would say that most current proposed condo highrises in Chicago don't have a very good chance, including this one, but I would say this one at least has a better chance than most, for the reasons you mentioned, and due to the fact that it has much less sales needed than most projects before it could potentially get a loan.
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Old December 5th, 2008, 01:20 AM   #465
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How do contracts matter?

However many contracts they obtained in 2006/7, when they purported to be 75% sold on the first Tower, how many remain valid today? Certainly any flippers are now out, and anyone actually needing a place to live has gone elsewhere. Original contracts were sold on a basis that ground would be broken in fall 2007. I can't imagine that many of their previously sold contracts remain viable at this point.

Last edited by Prairie Avenue; December 5th, 2008 at 05:40 PM.
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Old December 5th, 2008, 09:51 PM   #466
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Quote:
Originally Posted by Prairie Avenue View Post
However many contracts they obtained in 2006/7, when they purported to be 75% sold on the first Tower, how many remain valid today? Certainly any flippers are now out, and anyone actually needing a place to live has gone elsewhere. Original contracts were sold on a basis that ground would be broken in fall 2007. I can't imagine that many of their previously sold contracts remain viable at this point.
Not to mention the large number of people who probably won't be able to get financing when the time comes. I know this was a problem in several of the newer buildings I looked at before I bought my current place. Contracts were falling through left and right, resulting in more units becoming available almost daily.
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Old December 5th, 2008, 11:52 PM   #467
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Quote:
Originally Posted by Prairie Avenue View Post
However many contracts they obtained in 2006/7, when they purported to be 75% sold on the first Tower, how many remain valid today? Certainly any flippers are now out, and anyone actually needing a place to live has gone elsewhere. Original contracts were sold on a basis that ground would be broken in fall 2007. I can't imagine that many of their previously sold contracts remain viable at this point.
How do contracts matter? Is that a serious question?

Without a doubt, some investors are going to cut their losses and back out of their contract, and there will be other people who won't be able to get financing once the time comes, as someone else mentioned. And I don't know what the wording was in X/O's contracts, but I would imagine that the developers probably wouldn't go out of their way to confine themselves to strict deadlines in terms of starting construction (or else the buyers would have the option to back out), in terms of wording their contracts.

While there are surely going to be some investors backing out of their contracts, I don't think this number is nearly as high as you would think. I am assuming that all of the buyers under contract had put 10% down...while for a few people it may make sense to take that loss, I would imagine that most people would hold onto their contracts and avoid losing their down payment and decide to hold onto the property once it gets built....or better yet, hope that the project is cancelled and they get their 10% down payment back, with interest.

So while some contracts are certainly going to fall through, in this market, the majority will not. Let's say 20% of contracts end up falling through on average, for any given contract. If X/O was 50% sold originally, they'd still have 40% under contract after buyers back out of their contracts....whereas a project that was 10% sold originally would then fall to 8% sold. So obviously, the number of contracts they have DOES matter. X/O's chances at success, while not very good, are still better than the development that maybe had ony 10% of their units under contract before the market crashed.
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Old December 6th, 2008, 12:27 AM   #468
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I think all contracts have some sort of “out” for the buyer if the unit cannot be delivered by a given date. I don’t think it would be tied to the start of construction, but more likely to the delivery of the unit.

If the developer cannot deliver by that date, then it has to give back the deposit to the buyer and the contract is void.

In this market, only about 100% of the buyers would be happy to take back their deposit.

I’d say these guys would need to start marketing all over again if this gets revived.
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Old December 8th, 2008, 08:52 PM   #469
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Quote:
Originally Posted by Sir Isaac Newton View Post
While there are surely going to be some investors backing out of their contracts, I don't think this number is nearly as high as you would think....So while some contracts are certainly going to fall through, in this market, the majority will not.
One other issue that has been seen in developments that are built and closing is that sale contract prices are ending up higher than current bank appreciations. There are stories of units in One Museum Park being appraised for less than the sale price. When this happens the loan cannot be made. So the developer faces either dropping the sale price to the appraised value or having the deal not close due to financing.

What do you think about the sales prices for XO units negotiated during the height of real estate run up versus what they would appraise for if they too were hitting the market at this point?

You say no one would be likely to walk away from a 10% down payment, sure in the abstract and without looking at obligations that might be true. But if the decision is not to simply to walk away but now pay closing costs and sign into financing on a unit that appraises for say 20-30% less than the sale price in the contract and comes with high assessments and tax obligations that 10% walk away may seem like a bargain.

Look at all the projects that were conceived and started sales but not construction during the waning "good times" of the last real estate cycle that are now dead. I don't see XO's former contracts putting them at any advantage right now over any of those projects, and given the past, present and future carrying costs for the project, land ownership, that major demolition still has to proceed, etc., I would think vacant lots in the S. Loop are in better shape to be developed than XO.
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Old December 8th, 2008, 08:57 PM   #470
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Contract outs

You are correct that developers will never put in clauses guaranteeing start of construction in their standard contracts or out clauses on date of completion. I doubt they would negotiate a start clause either. But out clauses a year or two beyond the developer's projected completion date are routinely agreed to if the buyer's attorney puts it in a rider to the sales contract. It is one of the value added items attorney review gets you. It is hard for a developer to explain why such a clause should not be included when provided the leeway of 24 months beyond when they say they will deliver.
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Old January 6th, 2009, 04:36 AM   #471
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To the point

Look at today's Crains. There is an article there on the South Loop and how many units previously under contract no longer are. And those relate to buildings under construction, not a mere whim like XO.
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Old January 24th, 2009, 10:28 PM   #472
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http://www.chicagobusiness.com/cgi-b...rticleId=31256

X/O Condominiums
Andrew Schroedter
January 26, 2009


...Kargil at the time said sales would improve after the spat's resolution. But that prediction hasn't panned out; only about a dozen units have sold since July 2007, when buyers snapped up about 200 condos.

It's unknown when construction of the two glass towers, across the street from the landmark Glessner House in the Prairie Avenue Historic District, will begin or if developers have financing. Calls to Kargil Principal Keith Giles weren't returned.
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Old March 6th, 2009, 05:19 AM   #473
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xo condominums

Does anyone have any information on whether or not XO condominiums have obtained financing for the project and if not, will investors be able to recoup their earnest money?
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Old March 6th, 2009, 07:00 PM   #474
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Quote:
Originally Posted by flowergirl View Post
Does anyone have any information on whether or not XO condominiums have obtained financing for the project and if not, will investors be able to recoup their earnest money?
My guess would be no to the first question (especially since it is so difficult in general to obtain financing at this point in time) and yes to the second question (as I believe that your earnest money has to be held and protected in an escrow account, by law).
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Old March 25th, 2009, 06:54 PM   #475
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Across the street

Perusing the new suits filed I came upon several filed by 1600 Museum Park LLC seeking disbursement of earnest money on sale contracts for failure to close by the buyers. The amounts are pretty significant, 60k or more. probably be holding an auction soon and that should cushion the blow.
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Old April 15th, 2009, 10:23 PM   #476
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From Chicago Real Estate Daily (Crain's):

Developer defaults on X/O condo site

A venture led by Mr. Giles has defaulted on a $19.1-million loan secured by a Prairie Avenue property where the developer had planned a controversial 479-unit project called the X/O Condominiums, according to Joubin Khorsand, an investor in the venture.
* * *
Mr. Giles declines to say whether he plans to put the property up for sale or return deposits to buyers of X/O condos.
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Old April 20th, 2009, 04:43 PM   #477
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XO

The article states 44% of units had been sold. Interesting since Giles had said that the first tower was pretty much sold and they were starting to sell units in Tower 2. I had heard they stiffed Lucien, and that very little of the actual architectural had been done beyond the mock-ups and overall design for the dog and pony shows, and that his firm had stopped all work a long time ago.
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Old September 30th, 2009, 04:11 PM   #478
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http://www.chicagorealestatedaily.co...ws.pl?id=35642

Foreclosure suit hits X/O condo site

By Alby Gallun, Sep. 30, 2009

(Crain’s) — Caught by the depressed condominium market and the credit crisis, developer Keith Giles faces foreclosure on a South Loop property where he had planned a 479-unit condo project.

National City Bank has sued to collect $20.2 million from Mr. Giles and his partner in the development, Jerry Karlik, alleging that they defaulted on a loan for the site at 1712 S. Prairie Ave. Unable to secure a construction loan for the project, the pair simply ran out of time and options for a property that may now only be worth a fraction of the $13 million they paid for it in 2005.
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