Posts Tagged ‘hotel’

Distressed CRE Hits $108 Billion

Monday, August 3rd, 2009

More than $108 billion of commercial properties in the United States are now in default, foreclosure or bankruptcy.   That preliminary statistic is nearly double the amount reported at the start of 2009, according to New York-based Real Capital Analytics, Inc.19and20

At the end of June, 5,315 buildings were reported to be in financial distress.  Hotels and retail properties are the most “problematic” assets after bankruptcy filings by mall owner General Growth Properties, Inc., and Extended Stay America, Inc.  The lack of credit is spurring property defaults throughout the country and among every type of investor.

“Perhaps more alarming than the rapid growth in the distress totals is the very modest rate at which troubled situations are being resolved,” according to Real Capital Analytics.  The good news is that approximately $4.1 billion of commercial properties have emerged from distress.  “In far more situations, modifications and short-term extensions are being granted, but these can hardly be considered resolved, only delayed,” the report notes.

Deal or No Deal?

Wednesday, June 17th, 2009

Chicago’s iconic post office that straddles the Eisenhower Expressway has been vacant since a new facility replaced it in 1995, and the U.S. Postal Service has decided it’s time to sell the deteriorating structure at 433 West Van Buren Street.47424223

On August 27, the Postal Service will auction the 77-year-old, 3,000,000 SF, 14-story building.  The suggested opening bid is $300,000, but because there is no minimum, the building’s ultimate sale price could be significantly higher or lower.  Even auctioneer Rick Levin has no idea of how much the building might be worth. “I don’t know that there’s a more unique, hard-to-value piece of real estate in Chicagoland than this,” Levin said.

Since the Postal Service moved to a new Harrison Street building 14 years ago, it’s been suggested that the old space be used as a casino, a water park or an auto mall.  In 2007, the city gave initial approval to a failed plan with an estimated price tag of $300 million, including $62 million in local and federal incentives, to develop the complex into condominiums, offices and a hotel.

If a buyer is found, it will have to secure financing – a significant challenge in today’s tight lending environment — as well as deal with the property taxes.  Once the world’s largest postal facility, the building has always been property tax exempt.  Its eventual assessed value will be based on its future uses and the revenues derived from those uses.

One11 West Illinois Street Is Development Magazine’s Latest Cover

Wednesday, May 6th, 2009

One11 West Illinois Street is on the cover of  the Spring issue of Development magazine, published by the National Association of Industrial & Office Properties.111w_illinois_1

The Development article highlights the building’s unique positioning as Class-A-to-own office space that lets businesses own their space in a building with the quality of a premium-priced skyscraper – but at 40 percent of the cost of leasing.  The versatile building accommodates multiple uses — hotel, retail, restaurant, and office space.

Aimed at entrepreneurial business, One11 comes at a time when credit is being extended to small- to medium-sized business through the Small Business Administration and other agencies.  (To hear Key Bank executive Charles Krawitz discuss capital available to entrepreneurial firms, visit our TAG podcasts here.

Prominent architect Martin Wolf, FAIA, senior principal with Solomon Cordwell Buenz & Associates, faced several design challenges, specifically two adjoining buildings that occupy part of the site.  Wolf resolved this challenge by designing One11 around the buildings and creating a dramatic prow-like edge that resembles the bow of a ship.  The design achieves a contemporary, geometric presence that has won high praise from Blair Kamin, the Chicago Tribune’s Pulitzer Prize-winning architecture critic.

One11 West Illinois Street’s lead user – the Erikson Institute – had taken 75,000 SF on three floors prior to the ground-breaking so the graduate school for child-development professionals could have an upscale vertical campus.  A key factor in Erikson’s decision to purchase was the tax-exempt financing and the real estate tax exemption.  This economic incentive gave Erikson the ability to purchase almost double the space they had previously occupied.

To read the entire article, please visit NAIOP

Welcome

Wednesday, March 19th, 2008

Dear Friends,

Welcome to Alter NOW, our company’s brand new blog. We hope you’ll find it informative as we set out to chronicle the important trends underway in our industry. We hope to keep this free from sales and marketing language and simply use it as a way to start a dialogue with the stakeholders in our firm — our clients, our tenants, our contractors, our communities.

For those who may be unfamiliar with our firm, The Alter Group is 53 years old this year. We started as a residential developer in the south side of Chicago and have since grown to become a national developer of office, industrial, healthcare, hotel and retail facilities in 25 markets around the country — from California to Washington DC.

There are 160 people in 4 offices who keep the company running. I am grateful to all of them. Since brevity is the soul of wit, I will sign off here. I hope you enjoy Alter NOW.

Best wishes,