Hong Kong investors are leading a new charge of Asian money into the U.S. real estate market, and Chicago is one of the favorite targets.
A new study by E & Y Kenneth Leventhal Real Estate Group said $6.3 billion has been poured into American property markets from Asia in the last four years, with $2.9 billion coming from Hong Kong. The influx of money comes in spite of the Japanese, who the study found were mostly sellers of U.S. holdings.
A strong economy and the relative safety of U.S. markets is propelling the moves, analysts said.
While California and New York lead the pack, Illinois and Chicago have become the third most popular choices for Asian real estate money. The study noted that Illinois attracts most of its Asian investment from Singapore, followed by Hong Kong. But the report also noted that most Asian buying in this area came from 1993 to 1995.
Sales force
The commercial real estate rebound remains in full force. The latest data from CCIM/Landauer indicates that commercial realty sales in the second quarter of this year set a record at $4.9 billion, up 40 percent from the first quarter of 1997.
The number represents a high-water mark for the current recovery, analysts said. The recovery is being fueled in large part by real estate investment trusts, which led all purchasers in the second quarter by acquiring $1.7 billion in property.
In another positive sign for once beleaguered markets, office sales were the prime choice of realty investors. Nearly half of the total sales for the quarter, $2.3 billion, were for office properties.
Color coordinated
Rezmar Development Corp. has acquired a seven-story loft building at 1250 W. Van Buren St. in the West Loop Gate area and plans to convert the structure into 100 residential lofts.
Formerly home to Color Type Printing Co., the renamed Vanguard Lofts will offer one- and two-bedroom plans priced from about $100,000.
The classic timber post and beam loft building is being redesigned by FitzGerald Associates Architects. The loft building will offer something modern to at least some of the purchasers, who will be able to buy units with built-in tech centers that include high-speed data transmission hookups.
Rate of returns
The recent rally in Treasury securities and the lower interest rates it brought have already translated into higher mortgage refinancing activity and further increases are likely, mortgage lenders and analysts are saying.
NationsBank Mortgage, the country’s sixth-largest mortgage lender, said it has seen a 20-basis-point decline (or 2-tenths of 1 percent) in mortgage rates and that is bringing a 3 to 4 percent increase in refinancing activity.
NationsBank said about one-third of its $1.5 billion monthly loan production came from loan refinancings in the most recent week.
Empire National Bank, a mortgage lender in Traverse City, Mich., said its refinancing business jumped by 5 percent last week, compared with activity in the last six to eight months.
High note
A 42,000-square-foot loft building in Chicago’s Bucktown neighborhood has been purchased by a group of private investors who plan to turn the property into a haven for high-profile music-related tenants.
The building, at 1644 N. Honore St., is already home to Idful Music, which is expanding and remodeling its studio space.
Insignia/Frain Camins & Swartchild, which represented the buyers, said the asking price for the building was $1.45 million. The property was the former home of N. Henry & Sons, a firm that specialized in silk screenings and advertising specialties.
Deal of the week
In one of the largest transactions in Lake County, Illinois, this year, Peer International of Wheeling has purchased a 144,000-square-foot building on 20.5 acres at 3801 Norman Dr. in Waukegan.
Peer will use the space to relocate, expand and consolidate its bearing business. Grubb & Ellis, which represented the seller of the facility, said Peer will utilize the space for offices, manufacturing, distribution and corporate headquarters.
The site can accommodate expansions up to 350,000 square feet.
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Chicago Tribune real estate editor Steve Kerch reviews realty news and answers your questions on housing and other topics on The Real Estate Show every Friday from 9:40 to 10 a.m. on Channel 26-WCIU.
