Wednesday, July 8, 2020

Michigan Avenue Highrise - 1000M - Stops Construction as Lender Pauses Funding

It looks like one of the larger developments in the Sloop is on pretty shaky ground (via Chicago Tribune):
A Helmut Jahn-designed skyscraper along South Michigan Avenue is on hold at least until September and buyers of the luxury units are being offered some of their deposits back, after the project’s lender stopped funding its construction.
The latest delay, resulting from economic concerns tied to the coronavirus pandemic, raises questions about the viability of the biggest condo project to break ground in Chicago in more than a decade.
At 74 stories and an expected cost of $470 million, the 1000M tower would be difficult to pull off even in the best of times.
It would not be the first audacious project in Chicago to succumb to a case of bad economic timing. The most memorable is the 2,000-foot-tall, Santiago Calatrava-designed Chicago Spire, a project that fell apart after breaking ground and became a global cautionary tale about the fickleness of construction cycles.
Construction lender Goldman Sachs has put the 1000M project on hold until it can be reviewed after a 90-day period ending in September, providing more time to assess the impacts of COVID-19 on real estate demand, according to developers Time Equities, JK Equities and Oak Capitals.

It's another sign of the tough times ahead, but this specific development has always seemed to be on a roller coaster.  Many writers questioned the feasibility of the project, but it did press on with a ground breaking ceremony last fall and legitimate work being done on the foundation at the end of last year.

The Covid-19 hit and some ominous foreshadowing occurred as construction was halted for this project as they cited concerns of spreading the virus.  While this was certainly a valid reason, we imagine some of the financial uncertainty also played a role.

Regardless, it will be interesting to see what happens next with this development.  We shall see.

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