March 10, 2010 – Silver Tower is the Chicago real estate development of the week to be hit by a foreclosure suit. A $40 million lawsuit was filed by Bank of America after Metropolitan Real Estate Company wasn’t able to meet a December 29, 2009 payback date, according to a Crain’s article.

The 38 story River North high-rise, located on 303 West Ohio Street, has 225 condos but only 76 sales have closed so far, according to the article. That translates to only about 33%. Deliveries began in August of last year.

Of all of the foreclosure suits filed against Chicago condo developments in the past year or so, Silver Tower is the largest building to be hit so far, according to Crain’s. Real estate expert Tracy Cross stated in the report that the large number of buyers who walked away from their sales contracts at Silver Tower are mostly to blame for its current financial distress. “The culprit is the walk-away rate,” he was quoted as saying.

MB Financial, who was a lending partner for Silver Tower, had been offering loans with just a 5% down payment to qualified buyers who wanted to purchase a condo in the high-rise. That incentive wasn’t enough to stimulate sales though. Along with the original $60 million construction loan, $39.9 of which is still owed and the focus of the foreclosure, there is a $9.9 million mezzanine loan from Connaught Real Estate.

2010 may be the year for big development foreclosures, and on a smaller scale you might find your own bargins if you keep update on the latest Chicago foreclosures.

[tags]Silver Tower, Chicago Foreclosures, Chicago Real Estate Blog[/tags]

This entry was posted on Wednesday, March 10th, 2010 at 2:51 pm and is filed under Mortgage Information.