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Big names back Trump tower

Soros, Deutsche Bank said to be in on 90-story building

October 28, 2004|By Thomas A. Corfman, Tribune staff reporter.

Donald Trump has lined up three New York hedge funds, including money from billionaire George Soros, to invest $160 million in his Chicago skyscraper, a key piece in perhaps the largest construction financing in the city's history, according to real estate sources and public documents.

Despite reports about the project's record-breaking sales, most of them from Trump himself, many Chicago real estate developers and lenders have expressed doubts about whether the 90-story tower would ever be built.

"It is such a huge project, and the prices he said he was getting were so outside the norm," said Robert Glickman, president and chief executive of Chicago-based Corus Bank.

"It was reasonable to say, `Is this real?'" he said.

Much of the skepticism springs from Trump's own hype. "Chicago developers are much less flamboyant," said Glickman.

The massive financing, which sources say also will include a $650 million construction loan from Deutsche Bank, should quell those doubts.

Trump flies to Chicago Thursday morning for a ceremonial demolition of the former home of the Chicago Sun-Times, 401 N. Wabash Ave., which will be replaced by his 2.5 million-square-foot tower. The demolition is expected to begin for real in January.

On Wednesday Trump declined to comment on the financing, emphasizing instead the luxury project's record-breaking sales.

The chief executive of New York-based Trump Organization said he has agreements to sell three-fourths of the 461 condominiums and 227 hotel-condo units for a combined $515 million.

"Nobody to my knowledge anywhere in the United States has ever sold more than $500 million worth of apartments prior to construction," he said. "It's a great tribute to Chicago, to the location and to a great design.

"And, I guess, to Trump, when you think of it," he added.

The investor trio is led by Fortress Investment Group LLC, according to a financing statement filed Oct. 19 with the Cook County recorder's office.

Fortress, which manages more than $10 billion in investments, is familiar with the downtown Chicago condominium market after providing a key $26 million loan on the River East mixed-use development last year.

The document does not identify the other participants, but a key member is Grove Capital LLP, according to sources familiar with the transaction.

The firm manages most of the multibillion-dollar real estate portfolio of the $13 billion Soros Fund Management, from which Grove Capital was spun off last month.

• George Soros
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