July 29, 2009 – The foreclosure wave has swamped another Chicago real estate conversion project, namely Pearson On The Park in Streeterville. Private Bank and Trust has filed suit against the 28 story, 219 condo high-rise located on 222 East Pearson Street. Developer Ganesan Visvabharathy allegedly failed to make both the February and March installments to repay the remaining $6.8 million still owed on the loan, according to a Crain’s report.

Public records indicate that Mr. Visvabharathy arranged for Private Bank to refinance previous loans used to purchase the building and cover conversion costs. He also personally guaranteed the refinance loan plus put up 55 acres in Mount Vernon as collateral. One extension was granted when the loan came due last November, but attempts to get another extension to March 2010 have so far failed.

According to the article, 176 of the 219 Chicago condos at Pearson On The Park are sold, which is 80%, but only three units have gone under contract so far this year despite reducing prices by around 13%. That isn’t unique to this development though, because Appraisal Research Counselors states that only 17 downtown converted Chicago condos were sold in the first quarter of this year while 62 were sold during the sale period last year.

Developers trying to sell their remaining Downtown Chicago Condos before the end of the year may have to resort to even lower prices to stand out from all the competition.

[tags]Pearson On The Park, Chicago Condos, Chicago Real Estate[/tags]

This entry was posted on Wednesday, July 29th, 2009 at 12:37 pm and is filed under Mortgage Information.