Each week, The Elevator Speech summarizes news related to some of the key industry trends, buildings, deals and dealmakers that shaped headlines. Below are articles that caught our attention the week of December 10.
- Chicago developer Michael Reschke put the office and retail space of the JW Marriott up for sale. The 337,400 square feet of office space at 18,011 square feet of retail space at 208 S. LaSalle St. is expected to sell for about $70 million. Reschke spent $44 million in 2005 to renovate the building, including $21 million in improvements to the office and retail space in the tower.
- Tribeca Flashpoint Media Arts Academy is expanding again in the Loop by leasing 18, 788 square feet of space at 33 N. LaSalle St., where it plans to build a stage for its students to film movies and television shows. In addition to a stage, the two-year trade school for aspiring video, gaming and film professionals will develop a 200-seat screening room and event space, which Tribeca Flashpoint will make available for outside groups to rent for special events.
- Mayor Emanuel is preparing to put Midway International Airport on the market again. Although the city hasn’t yet decided how or even whether to proceed, the Mayor is moving toward another request for proposals that would test the market’s appetite for leasing Midway under different terms. There are too many variables to say what the airport could sell for today, but the back-of-the-envelope calculation is that airports sell for a multiple of their entire annual cash flow, including earnings before interest, taxes, depreciation and amortization and non-operating revenue such as passenger ticket taxes and car rental surcharges. Currently, the market is at a multiple of 14.
- The Q3 2012 Foreclosure and Short Sales Report by RealtyTrac found that commercial real estate foreclosures are down three percent from last year. The report found that 193,059 U.S. properties in some stage of foreclosure or owned by banks were sold during the third quarter. Similarly, the delinquency rate for Chicago-area commercial mortgage-backed securities (CMBS) loans has fallen in three of the past four months after peaking at 10.2 percent in July. The broader downward trend offers another positive data point for Chicago’s commercial real estate market recovering from the crash of 2008 and 2009. Occupancies and rents for office, retail and other sectors are rising again in the Chicago area, allowing more borrowers on the bubble to keep up with loan payments.
What CRE or Chicago news headlines from the past week captured your interest? Leave us a comment and let us know.