Monday, July 28, 2008

Crashng Prices On Chicago Condos Undercuts Trump

ChicagoBusiness reports:

Investors no longer have to pay Trump prices for a piece of Donald Trump's downtown condominium and hotel tower.

At least 34 hotel suites sold by the developer in the past six months are back on the market, some priced at a steep discount to comparable unsold hotel units in the yet-to-be-completed project. They are owned by investors who signed purchase contracts before construction began on the 92-story skyscraper, aiming to flip the units for a profit after closing.

It's a potential problem for Trump International Hotel and Tower, which is having a hard time regaining early sales momentum in a downtown condo market suffering from surging supply and declining demand. Mr. Trump, who relied on early sales contracts with investors to get $770 million in construction loans, now must compete with many of them for buyers: That's tough when prices on some of the resale units are more than 30% below the developer's.

"My clients want to get out, and the only way they can get out is by undercutting the developer," says broker Andrew Glatz, who has listings for 18 hotel units in the building at 401 N. Wabash Ave.

Mr. Glatz has listed a one-bedroom hotel suite on the 25th floor for $1 million, well below the $1.5 million a buyer would pay Trump for a comparable unit.

He's also trying to sell a two-bedroom suite on the 23rd floor for $2.6 million, vs. $3.2 million for a Trump unit.

The 339-unit hotel opened in January, the same time buyers started closing. Unlike a traditional hotel, where one large investor owns the entire building, the Trump project is a condo-hotel, where suites are sold individually to investors. The investors can occupy their condos and have them rented out when they're away.

No comments:

Post a Comment