Tag Archive | "Chicago"

Major Property in Illinois Town Faces Foreclosure

A prime commercial property that has been considered to be the heart of growth in a Chicago suburb is now facing a serious risk of foreclosure. The property, known as Metropolitan Square in Des Plaines, Illinois, was once considered to be centerpiece in the rebuilding of the town’s business sector.

Unfortunately, the property owner has fallen more than sixty days behind on the mortgage payments, leading both tenants and officials alike to believe that the property may fall into foreclosure. The property owner currently has a seventeen million dollar bank loan out for Metropolitan Square, and has defaulted on the loan more than once after missing numerous payments.

There is hope that the property owner will be able to rework the overall lending agreement before foreclosure hearings begin. The property owner claims that if payments are adjusted to become more affordable, they will be made on time now and in the future.

The property was crucial to the overall development of Des Plaines, as the city invested more than twenty million dollars into its construction. It currently features a tremendous amount of retail and office space, as well as more than one hundred condominiums. The commercial property’s biggest tenant is a Shop-N-Save grocery store.

The current owner of Metropolitan Square is Schwinge Family LP. They purchased the retail property in 2007. One of the primary reasons why Schwinge Family LP has not yet been able to afford its monthly payments is that the property has experienced fairly high vacancy rates. These vacancy rates are primarily due to rents being too high. Businesses have not been able to sustain themselves as a result of the high rents.

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Chicago Tower Sells for $217 Million

In what is reported to be the second largest commercial real estate transaction in Chicago in the past month alone, Multi-Employer Property Trust purchased a forty-five-story office building in downtown Chicago for more than two hundred and seven million dollars. The real estate equity fund purchased the commercial property from Tishman Speyer Properties.

The commercial office building, which is eighty-eight percent leased, is a strong indication of the growing demand of the market in Chicago. The commercial properties in many prime coastal markets such as New York and San Francisco have out-priced many investors. As such, secondary markets like Chicago are reaping the benefits.

Chicago has seen nearly a fifty percent increase in commercial property sales in the past year. Sales during this time period have brought in over one billion dollars.

Earlier this month, the city saw a commercial property sell on an even grander scale. A one and a half million square foot office building that serves as the home of Groupon Inc. was purchased for nearly four hundred million dollars by CommonWealth REIT of Massachusetts.

These two most recent commercial property sales may actually pale in comparison to an expected future sale. It is being reported that the continent’s tallest building, Willis Tower, is up for sale by its owners. The building is valued at nearly one billion dollars. If the partnership that owns the commercial property is not able to sell the building as a whole, it will likely opt to sell a partial share of it.

Cities like Chicago are certainly benefitting from the recent commercial real estate boom. However, there are still doubts regarding how such cities will fare in the coming months with a fairly dismal real estate forecast being projected.

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Commercial Real Estate Market in Chicago Sees Improvement

Chicago’s commercial real estate market is finally showing positive signs of improvement. For the first time in many months, the vacancy rate of commercial office space has dropped below fifteen percent, and experts believe that it may actually drop further. In addition, rent prices have increased, and are expected to further increase in the coming months.

Commercial office properties in the suburbs of Chicago are not having the same success as those in the city, though they are not suffering major losses either. Vacancy rates of commercial office properties in the suburbs have remained between twenty-two and twenty-three percent for some time.

Commercial real estate sales in the city of Chicago have also enjoyed great success in the past few months, thus bucking the national trend. Commercial properties in the Windy City saw an increase of eighteen percent, and sales of one million dollars or greater have nearly doubled in the last year.

The most recent trends of decreasing vacancy rates and increased sales certainly bode well for Chicago’s real estate markets. While residential real estate sales continue to remain slow, the commercial real estate market is setting the tone for a potential overall real estate market recovery.

Experts believe that Chicago is most definitely on the right path to get out of the current real estate struggles hurting the rest of the country. While recovery is still expected to be slower than most brokers and real estate agents would like, it is still happening, which is more than can be said about other areas in the United States.

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Chicago Real Estate Market Trends

Chicago Real Estate Market Trends

The home prices are low in Chicago but the sale price is up as the inventory of unsold housing projects is going to be cleared. How much this trend will affect the investments made by the lenders and borrowers who are searching to buy or sell new property in the coming few years at Chicago?

According to the famous association of realtors called Illinois, the rise in the prices of home sale was noticed up to 71.6 percent in the end of November 2009. However, the Standard & Poor’s/Case-Shiller index discusses the fall in median home prices at Chicago as 10.1%. This index is presenting a mix picture of health and recovery in Chicago’s real estate market which is not considering as a fix ratio for doing bigger investments.

However, the index figure of real estate market of Chicago can be compared with the year-to-year index ratio. It means that the ratio of index of six months of this year is easy to compare with the six month ratio of the previous year. The sale of existing home in Chicago has been noticed a bit lower this year and sellers are waiting for the prices that can be compared with the price which was noticed in housing bubble.

The city is now focusing condo developments which have been entered in the real estate market of Chicago with new properties. To avoid the risk of foreclosure, thousands of homes were listed as short sales. All of these factors are considered as the main reason of downfall in the prices of real estate home market.

 

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