November 8, 2008 – The latest news on the Trump Tower front is that Donald Trump is now suing to extend the pay off date of the $640 million construction loan he took out from the Deutsche Bank. The original due date for the loan was May 7th, but Trump was given a six month extension which came due Friday. The bank has thus far refused to extend the loan a second time without stipulations. According to an article in Crain’s, Trump is petitioning a judge to enforce a clause in the loan contract that states if there is an “extraordinary event” the bank must extend the loan. In the article, Trump is defining that event as the global financial crisis.

The suit filed by Trump states that the Deutsche Bank has sold off portions of the loan to as many as 18 different lenders, many whom refuse to extend the loan or are in financial distress themselves. Trump has so far sold about $204 million in Chicago condo and hotel units in the tower with another $353 million under contract. But there are still about 159 of the 339 hotel condo units still up for sale and with investors and individuals offering units for as much as 30% below what the developer price is, competition is tough.

Trump wants to lower the prices on the hotel units, but the loan contract states that they cannot be sold below a certain amount. Trump alleges that this is preventing him from selling the remaining units and paying off the loan. He has already invested close to $77 million of his own money in this Chicago real estate project and has offered to buy the remaining hotel units plus the retail space for $96.6 million, but the bank won’t negotiate a price.

It will be interesting to see how this all plays out, and the judge’s decision will no doubt have an impact on any future lawsuits filed over Downtown Chicago Condos and developments having problems paying down construction debt.

[tags]Trump Tower, Chicago condos, Chicago real estate[/tags]

This entry was posted on Saturday, November 8th, 2008 at 2:01 pm and is filed under Uncategorized.