Getting a new skyscraper

[i_am_hydrogen]

Nice to hear. 375 East Wacker has been on the back-burner for awhile, but I read that Loewenberg (Magellan) is just waiting for the opportune time to build it. And he has a really strong track record at Lakeshore East. Not the best architect, but a really good developer. It's almost as if the economic downturn skipped Lakeshore East.

[chet everett]

"Opportune time to build" is a fancy way of saying "no one has yet been able to swallow the ridiculousness of the story we've been trying to feed to those that would lend us money"... It is ALWAYS about the money. Yes, vacancy rates are a huge factor in helping lenders believe there is demand, but they want to be sure that the money that they decide to toss at the developer will yield greater return that other options -- every kind of alternative has to be thought through: private equity firms that run all kinds of businesses, traditional stock market investing in anything from energy companies to tech firms to turn arounds, investing in single family real estate mortgages, investing in sovereign debt, etc...

The strength of labor unions that once were willing to put their own retirement funds into major construction projects has weakened. The traditional insurance firms and other kinds of financial firms that once felt good about underwriting construction have seen lots of losses and a generational shift in the kind of upper management that no longer have the kind of experience to broker the deals. Even the developers themselves are a different breed than the guys whose names sit atop the big development firms they started -- just like "guys that look at computer screen" now dominate the personnel decisions for sports teams the current generation of development execs are not likely to press individuals for their financial backing in an era where accounting decisions dominate...

[Lucky Clover]

Looks like the Wolf Point project might just get approved now. Should be nice.

[emathias]

Originally Posted by Broadrippleguy

Whats Chicago downtown office vacancy rate?
Always check that for any city before even thinking of new skyscrapers.

Originally Posted by i_am_hydrogen

It's 14.9 percent, but that only matters when you're talking about office towers. All of the stuff planned or under construction is rental or hotel, with a few exceptions (e.g., 444 West Lake, 130 North Franklin).

What's also relevant is whether the people need new space can find the type of space they need. If it's 14.9%, but there's sufficient demand for types of space not represented by that 14.9%, then new office towers can (and will) get built. For example, there are reports that there is a shortage of big, Class A single-floor contiguous space, such as the type used to create proprietary trading floors.