River North condo project gets loan for first tower
(Crain's) — The developers of a two-tower, 385-unit condominium project next to the Scottish Rite Cathedral in River North have secured a $135-million loan to finance the construction of the first tower.
Enterprise Cos. and Mesirow Financial Real Estate, both of Chicago, plan to break ground Jan. 21 on the Walton on the Park development, says Enterprise Chairman Ron Shipka Sr. Chicago-based Corus Bank N.A. has agreed to provide the construction loan, and investors, including Enterprise and Mesirow, are kicking in about $50 million in equity, he says.
Buyers have signed contracts for 85, or about 43%, of the 198 units in the 39-story south tower, at State Street and Delaware Place. Mr. Shipka expects the groundbreaking to provide a marketing boost, showing potential buyers that the project is real.
"On the 21st, as soon as we start digging, we're going to have a blip in sales," he says.
Yet many developers are having a much harder time financing condo projects these days amid a sluggish downtown market. Downtown developers will sell about 4,000 condos this year, down 31% from 2006, according to Appraisal Research Counselors, a Chicago-based real estate consulting firm.
Related story: More downtown condos sold than added in 3Q
Condos in Walton on the Park sell for about $450,000 to $1.25 million, says Mr. Shipka, who estimates the total value of the first tower will be $220 million at sellout.
Enterprise and Mesirow will start marketing condos in the north tower when about 75% of the units in the south tower are spoken for, probably next fall, he says. The developers will need to raise more equity and secure another construction loan to finance the second high-rise.
