Chicago Condo News

One of the largest developers of luxury condos on Chicago’s Near West Side is facing difficulty in securing financing for a new project in the neighborhood.

Terrapin Group LLC is planning a mixed-use tower at the corner of Monroe and Halsted. However, the group has defaulted on the loan and now owes nearly $600,000 to the lender, Orleans Properties LLC. Orleans Properties issued a notice that it will auction off Terrapin’s ownership in the project, which is a joint venture with Seymour Taxman, a Skokie-based developer.

The announcement is one of the most recent high-profile projects that is facing financial difficulty around the downtown Chicago region, highlighting the pressure that the decline in sales in the area is putting on local developers.

Banks and lenders are tightening requirements for new projects across the country as a result of a large increase in foreclosures. Losses from foreclosures have led to billions of dollars in writeoffs for major banks.

Keep up with the latest Chicago Real Estate news and stay on top of market conditions in neighborhoods around the city. Browse through the best new condo developments around downtown Chicago today.

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The real estate market in North Center continued to see a decline in demand during the fourth quarter.

According to recent data from the Chicago Association of Realtors, a total of 78 condos and lofts were sold in the neighborhood during the fourth quarter. This is a drop of 15 percent in sales from the same quarter in 2006, and the lowest total sales seen during the fourth quarter since 2003.

However, despite the drop in demand, the number of condos and lofts on the market in North Center remained relatively stable. If you’re planning on selling your condo in the neighborhood, it will now take you an average of 148 days to find a buyer, up just 9 days from a year ago.

Prices in the area managed to increase despite the drop in demand for condos. The average sales price for condos sold during the fourth quarter rose by 1 percent from the same period in 2006, one of the lowest increases in recent years in the neighborhood.

Buyers could start to see lower prices for Chicago Condos For Sale around North Center if demand doesn’t pick up in the short term.

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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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