Goldman Sachs has pulled funding from Chicago’s largest active condominium project, the $470 million tower at 1000 S. Michigan Avenue.
The construction lender has put the 74-story tower on ice until it assesses the real estate market’s strength in September, the Chicago Tribune reported.
The bank is “concerned about economic stability of the market at this particular time due to recent events,” said Francis Greenburger, whose firm Time Equities is co-developing the Helmut Jahn-designed tower alongside New York-based JK Equities and Oak Capitals.
In June, Crain’s reported that construction work on 1000M’s foundation had stopped, apparently the first high-rise to fall victim to the economic uncertainty caused by Covid-19. The developers issued a statement at the time that claimed construction had stopped due to safety concerns, not financial issues.
Goldman Sachs covered the cost of the first phase of the foundation but hasn’t released funds to continue working, Greenburger told the Tribune. It’s unclear how much has been spent on the 840-foot tower, though the developers are exploring other means of financing the construction before the September review.
Greenburger told the Tribune that 101 of 421 units were in contract, with buyers having put 10 percent down. Those buyers are being offered half of their deposits back, though Greenburger told the newspaper that many declined.
Several other notable projects in Chicago have been delayed because of Covid-19, which has sent Chicago’s unemployment rate soaring. At least 450,000 workers in the Chicago metro area have lost their jobs in the last year, according to statistics from the Illinois Bureau of Labor. Construction of Uber’s office space in the Old Post Office development has been delayed, as has the planned observatory at the Aon Center.
Greenburger and his partners bought the condo site for $17.2 million in 2016. Some of the units were reconfigured last year into micro-units to spur sales. Prices range from $476,000 for studios to $8.5 million for the penthouse. [Tribune] — James Kleimann