Major Magnificent Mile project nixed
The downturn in the real estate market and resulting effect on banks and lenders is being felt in the office market in Chicago. A major deal that was announced early last year for the Equitable Building has recently been cancelled due to the inability of the buyer to find funding for the project.
Broadway Real Estate Partners LLC, a New York-based real estate fund, wanted to purchase the building at 401 N. Michigan Avenue in a leveraged deal backed by major banks. These types of leveraged deals have been common for the past few years.
However, banks and lenders are facing increasing pressure from enormous write-offs that have come about as a result of an increase in foreclosures. Several major banks have lost several billions of dollars in write-offs, resulting in the end of easy credit for even the largest of deals.
The failed deal could signal the end of rising values of downtown Chicago office space if developers are unable to get access to cheap credit.
Even the market for Chicago Condos For Sale has seen a significant drop in sales as individual buyers are also facing increasing scrutiny from banks and lenders.
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