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Historic Sears Headquarters District Finds New Life

realtycapital, 06 November 2006, No comments
Categories: The Institute

Chicago, Illinois,  November 6,  2006 — Celebrating its centenary, the historic Sears Catalog Plant district is now transcending into a new era.  Serving as the original Sears Roebuck and Co. world headquarters from 1906 to 1973, the district boasts a long history of research and development accomplishments including a catalog publishing plant, testing laboratories, automobile insurance (original home of Allstate Insurance) and one of the nation’s first radio stations (WLS).

Today the area is a National Landmark district known as Homan Square.  Continuing the innovative tradition of the Catalog Plant, it is Chicago’s newest technology-based community.  A $30-million Community Center developed by the late Charles H. Shaw is the crowning achievement of this area featuring free WiFi for the entire neighborhood.  

Beyond the technology initiatives, Homan Square boasts a central location within Chicagoland.  Located in North Lawndale, the neighborhood is in the heart of the City’s West Side.  Only ten minutes from downtown (about 4.5 miles), the Rapid Transit serves this section (Blue Line) and the Eisenhower Expressway.  Douglas and Garfield Park surround it.   Just as importantly, the second largest employment node in Illinois is only a few minutes directly east (the University of Illinois and the Illinois Medical District).

The Real Estate Capital Institute is a specific example of technology-based organizations moving into Homan Square.  The Institute will occupy the original Sears Tower.  Located in the heart of the area at the intersection of Arthington Street and Homan Avenue, the 14-story structure is a 100-year-old national landmark, otherwise known as the “Old” and “First” Sears Tower.  This landmark is the oldest skyscraper outside downtown Chicago.  Notes Nat Zvislo, research director of the Institute, “the area has a small community feel within a big-city environment — a true neighborhood.”

The Real Estate Capital Institute selected this community as its headquarters for a myriad of reasons.  The Institute is a national research organization using fully automated communications for processing real estate capital market data.   As a result, its workforce needs to be close to downtown and “tech” neighborhoods such as Wicker Park.   Enough parking and close public transportation access were also important factors. 

For more information about the Homan Square area, please visit www.homansquare.org.  The Real Estate Capital Institute’s website is www.reci.com.

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Las Vegas, NV - February 6, 2010 - According to industry leaders gathering in Las Vegas this week, debt capital is readily available for 2010.  Optimism is in the air and the mortgage lenders are starting to offer more generous terms and conditions.  In summary, timing is excellent for select borrowers in securing debt based on the following conditions:  (1) Recovering economy, (2) Ample supply of capital and (3) Limited supply of financeable real estate assets.  The following highlights summarize the 2010 state of the realty capital markets including an overall outlook and overall funding program offerings:  Back to Basics:  As lenders workout of their legacy problems, new funding goals surface which are clearly more ambitious than 2009. Still underwriting of actual numbers w/o projections, yet inflation fears exist. Most lenders are Indifferent to spreads, but not competition. Valuing real estate properties in a declining market still a challenge. More allocation of funds available above target amounts if deal flow is of sufficient quality Underwriting Dynamics:  As has been the case last year, high-quality projects in major markets backed by excellent sponsorship and cash flow characteristics are most desired—especially based on low leverage of 65% of value.  Location/Property Types: Major MSAs strongly preferred for optional pricing and leverage.  Otherwise a substantially most costly financing with lower leverage. Preferred property types ranked in order:  (1) Multifamily, (2) Credit-Tenant lease of all property types, (3) Industrial, (4) Retail, (5) Office - however medical office ranks equal to Industrial and (5) Lodging. Pricing (Permanent Fixed-Rate Loan): Agency pricing for apartments starts in the low to mid-5% range for 5 year or greater term. Life company pricing starts mid-5% to 6% for 5 years or more term mostly targeted for commercial property pricing (agencies are more competitively priced) More entrepreneurial funds start at 7% or more targeting secondary markets, smaller fundings, older properties and lodging assets. Add a pricing premium of 25 to 50 basis points for loans below $5 million. Yield differential disappearing - typical ($5 to $50 million) vs. larger loans. Forward funds available up to a year based on 6 o 8 basis points premium per month.  Leverage: Above 65% LTV on a select basis combined with lower spreads. Values based on the lower of: (a) purchase price, (b) appraised value or (c) lender imposed capitalization rate.