March 18, 2008 – With an increasing number of lenders tightening restrictions on loan qualifications and in some instances requiring more than 50% in presales, at least one Chicago real estate developer is turning to an alternate means of financing for his project. Crain’s reported yesterday that William Warman of Provence Development Group is attempting to pre-sell the four major parts of his new development, namely the hotel, retail space, apartments and parking, to investors in an effort to make the project more secure and gain construction financing more easily.

Warman has plans to build a 52 story high-rise on 300 North Michigan Avenue. He is marketing all of the tower’s components, hoping to entice investors for them, or at least parts of them. The pre-sale would work about the same as one for pre-construction condos in that the investor would enter into a contract to buy before the tower breaks ground, then close the deal once the high-rise is finished. The article noted that Warman had contracted to buy the prospective building site for roughly $30 million last summer, but has had to delay closing more than once, presumably for monetary reasons.

The developer would like to complete the high-rise sometime in 2011. Once finished, it would have a 160 space underground parking garage and contain around 29,000 square feet of retail space on levels one and two. Floors 3 through 23 would house the 300 room hotel and from floor 24 to 52 would be the 225 apartments. Rents for Chicago Apartments have slowed their upward spiral a bit, but there still may be plenty of investors willing to bank on this project.

[tags]Provence Development Group, Chicago Condos, Chicago Real Estate[/tags]

This entry was posted on Wednesday, March 19th, 2008 at 1:45 pm and is filed under Mortgage Information.