News of two units going into foreclosure at Chicago's Trump Tower comes this weekend. The bank action will be the first of it's kind in the long suffering project, though more than a few expect this to be only the beginning.
Over 25% of the condo units and 36% of the hotel-condo units remain unsold. Those units (over 200 in total) remain in the possession and on the books of the hotel development group.
Two years ago (pre-opening) I warned about this very thing happening. I have regularly followed the buildings progress, and travails, since it's announcement on my favorite Chicago real-estate site, CribChatter. The Trump has had so many issues, it now has it's own tab on the site. And nothing in the past few years have changed the developments prospects for success.
Consider, since 2007:
- Pre-construction condo-owners in the building have waged a fierce bidding war with the Trump group to dump their properties to prospective owners in the building. This has led to massive price reductions on the sale of every unit since the Grand Opening. All you need know on that front is 25% off is the opening, and it just starts going down from there. This is why the developer still has the same amount of units since opening.
- Chicago has entered a housing glut some describe as, "the worst in the nation." We have more empty units in the city of Chicago (with more on the way), than any city in the country. At last count, there were 22,600 unsold, EMPTY condo-units in the Loop and 4 surrounding neighborhoods as of 09.30.09. All told, analysts believe the city-wide number to be as high as 110,000, counting only the empties,tens of thousands of more "condos" were transferred to rental properties after sitting on the market for 2 years. A lot of that has to do with...
- The Olympic Dream was foiled in October, so the city's plan of filling all these empties with the workforce that was sure to come with the jobs the Games would have provided.
- Trump has remained a dick. Please read THIS farcical article from 2007 on how demand for living quarters at the property was so strong, he had to "cut out friends and family." If the Donald were being eaten by sharks in the open sea, while drowning, during an alien attack on the earth, he would say that it is "all a part of the plan and good for business." Everyone told him the building was too big, had too many units and was priced to high for the Chicago market. But his ego told him that he was the person who could introduce New York-style pricing to the Second City. Uh, computer says "no."
Look for more fire sales in the coming weeks and more foreclosures in the Spring, as Chicago's long-term job market prospects become clearer and more dreary.
But I close on a high note. The building, I must admit, is the best and most stunning addition (and clearly my favorite) to the Chicago Skyline in 20 years. Thank you for that, at least.