Lincoln Park condo project goes broke
Monday, January 28th, 2008Developers are starting to feel the crunch as sales of new condos drop around the Chicago region. Several projects have already been put on hold, including Azure Tower and other large developments. Some developers are even facing bankruptcy as lenders look to unload risky loans.
One of the newest victims of the downturn in the housing market is Ashton Lofts. This 39-unit condo project has already been completed, but sales have been too slow to cover the construction loans owed by the developer, WMC Development IV LLC. The bankruptcy comes as LaSalle Bank filed a suit to recover a $5.3 million construction loan.
The bankruptcy proceedings don’t affect buyers who have already bought a condo at the Ashton Lofts. Also, any unit under contract will also be protected during the bankruptcy proceedings. Delays in the construction of Ashton Lofts caused many buyers to back away from contracts, and have led to a strong drop in the operating capital for the company.
The downturn in the Chicago Real Estate market is putting a lot of pressure on developers to cover construction loans given during the peak of the market. New developments are facing even tougher requirements for financing from banks and lenders.
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