-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Unspoken is fact many commercial real estate owners are stuck holding properties they’re unable to sell, and their lenders reluctant to receive property in lieu of foreclosure.
Giant ticking bomb.
Every piece of real estate in Illinois has it share of the unfunded liabilities for the pensions reflected in their price. The price ight be low but don’t forget that when the amount due the pensions is included the price is higher. PPF often alludes to this and is correct…those pensions are secured by Illinois real estate and will be paid by Constitutional edict. That’s what is funny…those that think Illinois property values will rise forgetting that the pension liabilities are rising as well; something the Illinois people will have to live to realize the facts. Just another good reason… Read more »
https://www.frontlinerepartners.com/property-listings/?propertyId=1201607-sale
This is a receivership sale for 4 three story office buildings in Oak Brook (32% occupancy). Value based on NOI of $228K is about $3,250,000. You need to factor in that you’ll lease the vacant space so there’s additional value in that. Fully occupied it’d be about $10M. Still looks dismal.
Or, alternatively, factor in the value after the leases expire and not renewed, or tenants default or renegotiate, and vacant space not ever filled. Price will fall even further.
Case in point, Navistar took over the beautiful, award-winning ATT building in Lisle some years back. Its less than half utilized. Lisle had a stipulation that the building be occupied in order to get the building, wonder how good that agreement is going now.
Great job fatty! Forcefully close down suburban offices and then they never reopen! Morons of the highest magnitude!