Overcoming many redesigns and a sickly office market, the Trump International Hotel & Tower inis slated to rise between the Wrigley and IBM buildings in late 2007.
Initially hyped as the nation's tallest skyscraper by Donald Trump, the flamboyant real estate magnate, the original 2001 design by Skidmore Owens & Merrill failed to win over Chicago's residents and architects.
Four years and three designs later, the stacked boxes have been replaced by a cylinder-shaped glass exterior that resembles a tall, streamlined ship topped with a thin, spiked spire.
The $750 million project, which includes a $640 millionloan from Deutsche Bank Securities, broke ground this year. Once completed, it will house 452 residential condos and 286 hotel condos with studios and one-, two- and three-bedroom units.
The latest incarnation marks quite a contrast from Trump's original plan. In response to the slumping office market, the Trump organization scaled back the office component from 1.6 million sq. ft. to 350,000 sq. ft.
Then in 2004, floors 17-24 — which were originally planned as office space — were reconfigured as condos.
“Unusually high vacancies” categorize office-leasing activity in the area, says Jim Lannon, director of leasing at the Wrigley Building, noting that he has had difficulty leasing office space at $26 to $32 per sq. ft.
Last year, corporate consolidations and relocations of law firms and businesses added to the inventory, weakening an already beleaguered office market. The vacancy rate in the surrounding area recently fell to 17% after finishing 2004 at nearly 19%, according to Property & Portfolio Research. On the supply side, 3.1 million sq. ft. of office space is expected to be completed this year compared with just 400,000 sq. ft. in 2004.
The decision to remove the office component from the Trump development appears to be paying off. Initially priced at $750 per sq. ft., today the building's condos are selling for $1,000 per sq. ft. for residential condominiums and $1,200 per sq. ft. for hotel condos.
The buyers are typically baby boomers from Chicago and surrounding suburbs purchasing their first, second or third homes, says Tere Proctor, director of sales for Trump International Hotel & Tower.
To date, 70% of available space, including condos and hotel condos, has been pre-sold. The hotel condos are particularly appealing because they can be purchased for personal or corporate use, and they offer all of the amenities of a five-star hotel.
When not in use, the rooms may be rented as part of the hotel. Prices for condos range from $527,000 for studios to $28 million for a penthouse. The pricing of hotel condos starts at $815,000 for studios and rises to more than $3 million for two-bedroom suites.
What will be the impact of this 92-story project on downtown? “It will add to retail traffic and business in the area as well as increase overall value of property,” predicts Rick Mikrut, operations manager for the nearby Tribune building, home to the Chicago Tribune newspaper.
As with past projects, The Donald is more than willing to cater to the upper crust. The top penthouse has sold for $28 million and four others went for $11 million or more. Proctor says revenues for the sale of all the units should amount to something “close to $1 billion dollars.”