It’s no suprise that Block 37 is being foreclosed on. The project seemed doomed from the beginning. Doomed since it was first introduced under the original Daley, Richard J., in 1970. Today Bank of America and another group of investors moved to foreclose on the development claiming the developer Freed owes $128.5 million on a $205 originally loaned. So, what gives? How could the developer not make the building work? The location could not be more ideal, surrounded by the court house, theater district and shopping central.
However, maybe we shouldn’t be so quick to blame the developer. This could be just another loan gone wrong. Another time the banks and other lenders overextended themselves to debtors, a mirror of the imploded housing market. We will have to wait and see if banks begin to foreclose on other development projects to know if this is a fluke or if it’s the begining of a trend towards a burst in the commerical real estate bubble.