The Dirt Lawyer's Blog Archive

When I read this story, captioned " It can't get much worse ," I wanted to jump out the window. Luckily I was in the basement. Seriously, here's what some are saying in institutional investor land: Properties with purchase offers are not closing; transactions are down; and managers are going hat in hand to their investors for cash to prop up properties they do own. “There's no light, no tunnel, no liquidity, no equity,” said Jeff Barclay, managing director and head of acquisitions and development at real estate investment firm ING Clarion Partners , New York. “Some people are being wiped out,” said Claudia Faust, co-founder and managing partner at Hawkeye Partners LP, a real estate private equity firm in Austin, Texas. Hawkeye takes stakes in real estate money managers Deals are being broken at historically high rates. Some buyers are reneging on deals struck just a month or two ago. Others have walked out on deals or “shamelessly” renegotiated deals after they...

I wrote previously about a great new project being undertaken at 200 N. Riverside Plaza, a stone's throw from my Chicago office. The Tribune reports this afternoon that William Blair & Co., the local financial services firm for well-heeled folks, is taking 350,000 sf (or 35%) of the building, presumably on a long term lease with rents at $45-50/sf (which I imagine includes a nice tenant improvement allowance for the initial buildout. This means the building is almost certainly a go. The fact that the venture is apparently being backed by pension funds is also helpful because it makes the project largely immune to tightening in the credit markets. I'm looking forward to seeing this project come online, albeit probably in four years or so.

Hines is looking to develop 200 N. Riverside Plaza with a 50 story, 1 million sf building. Although if this get built it puts a ton of new space online, I like this project for different reasons. First, the legal issues surrounding a deal like this are very complex, and I like that. You have the river and the railroad tracks to consider, complicated constrution issues, major-league anchor tenant lease...the whole kit and kaboodle. I also like it for a selfish reason -- because it is near my Chicago office, which just adds to all the development going on in my neck of the woods. The bad news? I think it will completely block the east views from the roof and third floor of the building where my office is.