April 15, 2009 – It looks as though X/O Condominiums may be dealt a knock-out blow if a loan extension can’t be worked out between Chicago real estate developer Keith Giles of Kargil Development LLC and National City bank. Giles has defaulted on the $19.1 million construction loan that came due in June of ’07, but had provisions in the contract that allowed for two extensions of up to six months each, according to an article in Crain’s.

Neither party gave a direct comment on the status of the loan default, but Giles did make an optimistic statement in the article. “We have a great relationship with our bank and are diligently trying to work through our issues.” A Dr. Khorsand, an investor in X/O had a more pessimistic outlook though. Khorsand claimed that Giles let him know two months ago that there was a problem with the development. Khorsand quoted Giles as saying that, “`We’ve got bad news: X/O has basically failed.’”

Besides the bank loan that is in default, there is also a $505,368 lien against the development that was placed by architect Lucien Lagrange.

X/O has faced several set backs since it began marketing. The two tower, 479 Chicago condo project on 1712 South Prairie Avenue was stalled for weeks after Alderman Fioretti attempted to change the zoning to shorten the towers. That dispute was resolved after Giles filed a lawsuit to stop the zoning change. But the controversy and delays hampered sales, and the project has hovered at around 44% (210 of the condos) sold for months, according to data from Appraisal Research Counselors.

Sadly, X/O may soon join the list of projects that are scrapped this year and it may be several years more before we see developers launching large projects like these Pre Construction Condos in Chicago.

[tags]X/O Condominiums, Chicago Condos, Chicago Real Estate[/tags]

This entry was posted on Wednesday, April 15th, 2009 at 6:50 pm and is filed under Mortgage Information.