July 22, 2009 – Ricker-Murphy, the developer of Lincoln Park 2520 have announced that in an effort to secure a construction loan and hopefully make more sales, the three tower Chicago real estate project will be both shortened and the number of units reduced. Crain’s reports that the tallest of the planned high-rises in the complex to be built on 2520 North Lakeview Avenue will go down from 41 stories to 33 stories and the number of Chicago condos will be lowered from 292 to 198.

The overall design of Lincoln Park 2520 will stay the same and the 19 townhomes at the base will still be built, according to the article. Sales have been stuck at about 50% for some time, and by lowering the number of condos in the project it would jump to 74% sold. But wiping out the top 8 floors of the tallest tower also causes 29 condos to disappear. Those condos are already sold, and Crain’s points out that if those buyers decide not to opt for another unit, the gains will be lost.

John Murphy of Ricker-Murphy said in the article that, “Our opportunity to reduce the scale we believe will actually make us more attractive for not only construction financing, but also more attractive for the buyers.” But he also admitted that lowering the number of condos also lowers the profit of the development. “There is profit, and we feel it is consistent with our underlying projections from the outset,” he commented.

With the backing of the GE Pension Fund, Ricker-Murphy is moving forward with foundation work for the complex, even without a construction loan in place. This is probably to shore up faith in the project and also because buyer contracts in place right now state that first deliveries must be made no later than the end of 2011. Foundation work must be started now for that to become a reality.

Ricker-Murphy bought the site for $44 million, of which $28.75 million will come due to Bank of America on August 15th. The developer needs to either extend that loan, lock in a construction loan or make some sales to raise cash. Prices at Lincoln Park 2520 are about $885 per square foot, so that puts them close to the Chicago Luxury Condos range and finding buyers may be a hard sell right now.

[tags]Lincoln Park 2520, Chicago Condos, Chicago Real Estate[/tags]

This entry was posted on Wednesday, July 22nd, 2009 at 12:48 pm and is filed under Mortgage Information.