In Chicago a new real estate boom is occurring. There are 3 large hotels and 2 major apartment skyscrapers being built in River North.
There is also some good news on the “abandoned building” front. At 111 W Wacker, there is an abandoned, partially finished skyscraper that was going to be an 80+ story condo / hotel. They recently changed the facade in the front of the building as you can see in the photo above and claim to be working on completing the building, sitting idle since the 2008 crash. According to this article, it is to become a 65 floor apartment building, apparently satisfying an insatiable demand for high end apartments in the city (also due to the fact that people were having trouble selling condominiums in this real estate market). We’ll see if it actually gets built but this is a good start nonetheless. I wonder if it hurts a building to sit out half-finished, exposed to the elements all winter, but apparently this isn’t stopping the new owner. Doesn’t seem like a good idea to me.
On the other hand, there is a Staybridge Suite building in River North that has been covered with some sort of strange tarp for years. If you go to this link you can see the odd shape that the building was supposed to have. I will believe that they finish this damn thing when I see actual construction, although they do keep the lights on at night. The f’d up part of this is that Staybridge is an actual company – I hope that this leads to some bad publicity or something for them, leaving a giant half built eyesore in the middle of Chicago. Hopefully they make some headway on this before the current mini real estate boom ends in dust and misery like the last one.
Cross posted at LITGM
There was a 20 story building in Oceanside, CA for many years when I first moved to Orange County. Eventually, it was finished and has been occupied for 25 years. Seeing as how they are for sale for nearly $1 million, it must have turned out well. That building stood vacant for 20 years.
The real estate market seems to be spiotty in variopus areas of the country – and even CA. Where I live – 20 miles away – there is a half finished giant shopping center – the buildings concrete but no walls. It is an eerie sight. I don’t understand how – with a glut of office space here – the price per sf seems to stay constant.
What happened to all the real estate people saying real estate was the only sure investment? ;-)
Half built structures that lay dormant for years are a third world thing. I see this when traveling to garden spots like Karachi and Nigeria. Usually the banks that hold construction notes will insist on finishing the structure to have weathertight, enclosed condition to preserve it. But the underlying value of the building may have deteriorated so much that it’s not worth enclosing it. The fate of these buildings are almost always demolition.
Rest assured a double dip recession is on the way. $100+ Oil prices, stagnant Europe, slow markets in US are the leading indicators.
“I wonder if it hurts a building to sit out half-finished, exposed to the elements all winter …”
It won’t hurt the concrete or structural steel at all (assuming the steel has a proper finish).
“Garden spots like Karachi and Nigeria”
If it warn’t for dark humor I’d hev’ no humor at all!
When I lived in NYC my job required me to work in many buildings in Manhattan. I was always amazed at how much vacant space within them remained so for long periods.
The building on Oceanside was open to the elements for many years before being finished. It doesn’t seem to have hurt it. It was the only high rise structure along the coast and was quite a landmark. Wooden structures do not do as well abandoned. There were some houses in Laguna Niguel, near where I live, that were finished but unsold in the 70s when interest rates killed the RE market. A few years later the rates came down and they were opened up to sell. However, when they turned the water on, they flooded. Rats had eaten the plumbing plastic. Now, rat-proof PEX is used in new construction, especially in Arizona.
DJ Guy:
You may be right about an impending double dip. But with all the government interference in the treasury market, one of the better indicators of an oncoming recession – an inverted yield curve – may not be apparent to us as a warning sign.
Other than the *perceived* flight to quality this chart suggests, (3% @ 30 years, really???) everything here appears hunky-dory.
http://economicdatacharts.com/Treasury_Yield_Curve.html