This 2-Bedroom Is An “Amazing Investment”: 235 W. Van Buren In The Loop
This 35th floor 2-bedroom at 235 W. Van Buren in the loop came on the market in June 2012.
If you recall, developed by CMK in the modern style, the building was completed during the Great Recession and has about 714 units.
It has still not sold out its units.
The listing for this unit says it is the largest 2-bedroom floorplan in the building at 1327 square feet (although the developer is also trying to sell Unit #2601 and that unit has square footage of just 1292.)
But it is much bigger than the 1000 square foot two bedrooms that seem to be more common in the building.
It has North and East views.
The unit has exposed concrete ceilings and hardwood floors.
The kitchen has granite counter tops and stainless steel appliances.
This unit is apparently currently rented. The listing calls it an “amazing investment” as the tenants are paying $3150 a month.
The listing says it is “priced well below market value.”
It is currently listed $37,100 under the 2009 purchase price (if you include the $50,000 tandem parking) at $449,900.
Unit #2601 from the developer is listed, with the parking, at $463,800 (not sure if that’s the tandem parking or not.)
Is this property a bargain?
And is it an “amazing investment”?
Blake Golden at Coldwell Banker has the listing. See the pictures here.
Unit #3501: 2 bedrooms, 2 baths, 1327 square feet
- Sold in November 2009 for $487,000 (included the parking)
- Originally listed in June 2012 for $399,900 (including $50,000 for the parking) or $449,900
- Currently still listed at $449,900
- Assessments of $443 a month (includes heat, a/c, gas, doorman)
- Taxes of $6128
- Unit currently rented for $3150 a month
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 11×12
- Bedroom #2: 11×16
Such a great investment that the owner can’t wait to get rid of it!
With 20% down you might get a loan for ~$1750 per month and with fixed costs of $960 I can see how you end up with positive cash flow every month. But if you ever go a single month with no tenant you lost so much of you profit that you may as well have left your down payment money in the bank. Two months without a tenant and you are staring at a loss for the year.
The current owner is probably finding it difficult to refinance as an owner-occupied place, so things are likely far less rosy for him.
When I went to the listing it indicates a price of $399,000. Still too high for a 2/2 in a no amenities building.
“But if you ever go a single month with no tenant you lost so much of you profit that you may as well have left your down payment money in the bank.”
Less than $1000 of that mortgage payment is interest. The rest goes to equity.
Yes, it’s listed at 399,900. That works out to a 6.6% ROA, which is pretty good for the Loop.
Can we see more shots of the convenience store? I’m wondering what is down asile 5.
“When I went to the listing it indicates a price of $399,000. Still too high for a 2/2 in a no amenities building.”
If you buy it with the parking space, which I’m assuming most people will, it is listed at $449,900.
I’m curious how long everyone thinks they’ll be able to get $3150 for this?
$2300-$2400 is more like it in a “normal” rental market. Once we have 7,000 more apartments on the market, will they be able to get anywhere close to this?
Also- those assessments seem way, way low. This is the largest 2/2 in the building. I would assume the HOAs should be closer to $600 to $700 a month.
Eventually, the rent bubble is going to burst and this place won’t rent for over $3100 a month. The owner can dream about a big pay day when he sells, but I don’t think that will happen given this building is comprised of many small one-bedrooms that will appeal to a lower end of the market.
Maybe this is a corporate rental. I know a few people, who rent in that area, just so they have a 2-4 block walk to work and they all pay between 2300-2800. Are there any other apt buildings planned for that area?
Fewer than half the pictures are actually of the unit. What a joke.
Man those guys are getting boned on rent, I couldn’t see paying any more than like 2800 a month for that even with parking
What, no pictures of the men’s salon next to the convenience store?! If the agent isn’t even at least going to be thorough with the pictures then I’m not going to go see this unit.
“$2300-$2400 is more like it in a “normal” rental market. Once we have 7,000 more apartments on the market, will they be able to get anywhere close to this?”
In what, 2+ years from now? In a different neighborhood? Sure, why not, my speculation is as solid as yours, but I’d go with demand for city living UP if jimmy carter 2 gets re-elected. Think gas prices are high how? Wait till Iran attacks Israel or bernake enacts QE8…
“Yes, it’s listed at 399,900. That works out to a 6.6% ROA, which is pretty good for the Loop.”
Or sub 6 when you consider what they are actually renting. Which is fine right now, bc of low interest rates, high rental rates, and not yet jacked up tax and assess. In 7 years, you’ll likely face a substantial capital loss, certainly in real value terms.
The ONLY thing going for this building is proximity to the loop. If you work in the financial district and live on a high floor, you will likely spend more time in elevators on your commute than outside. Other than that, the building itself has no amenities, the units are on the small side, and there is nothing to do in the immediate area outside of work hours that doesn’t involve stabbing tourists.
This is one of the only decent floor plans in the building, where the kitchen is not four feet away from the futon. Of course, this requires someone with $400,000 or equivalent renter who doesn’t mind living room seating being limited to two love seats. Tough sell.
It amazes me the crazy stupid rents people are paying now. It seems like some people just pay whatever they’re asked to pay without even looking around. Even in this irrational rental bubble, one does not need to pay $3000+ for a small 2 bedroom in a sub-par building. I’d say the rent falls to $2000 a month next year once the new construction buildings start flooding the rental market with supply.
From what my friends have told me, it’s almost impossible to find a nice 2-bedroom for under 3k a month in the downtown area. One friend in particular was hit with a $500 a month rent increase. He wanted to move, but couldn’t find anything as nice for less money. He plans to buy next year, but wasn’t quite ready this year.
there’s some decent value if the buyer could get it done, with parking, somewhere in the high $300’s.
hard to believe there’s not even a workout facility in this building. big mistake by developer imho.
That building was a good buy last year when you could get a really good price.
Now all units there are selling higher. South view there is unbeatable and the parks newly built is def a plus.
I know people paying 2k there for 2 beds but they are the kids who are making 100k a yr. No amenities is not a prob. Overall a top middle class building
“Also- those assessments seem way, way low.”
This is a very low amenity building with a TON of units.
With companies moving to downtown (UA moving their headquarter to Sears Tower), this building is a great rental property.
“That building was a good buy last year when you could get a really good price.
Now all units there are selling higher. South view there is unbeatable and the parks newly built is def a plus.”
Are you sure about this? I haven’t ran the numbers recently, but last I checked (earlier this year), resales in that building were coming in 30% lower than initial purchase price. The developer is crazy in thinking they can still demand awfully high (pre-bubble) prices for these horrible units.
And has anyone checked out the Facebook page? Hilarious! The story… awful construction work and awful finishes. Developer/builder has been unwilling to work with owners on anything and replace cabinetry, appliances, fixtures, etc. that have broken within a year of purchase. 235 has a forum for owners. The owners began posting complaints on the forum. The developer is now censoring the board and removed all the complaints. So, an owner created a public facebook page and now everyone complains on there.
Moral of my story… DO NOT BUY HERE! Arrogant developer unwilling to adjust to market prices and horrendous quality.
By the way…. where’s Joe Zekas? He’s usually here by now.
In these CMK buildings you get what you pay for, they are not ‘luxury’ but utilitarian and anyone expecting top of the line finishes and spacious condos will be sorely disappointed. I personally enjoy the low assessment/amenities in my building. I want to spend my money as I see fit instead of funding some craptastic gym that only creepy people use.
And a comment re: rental prices. There’s a new development coming soon to the west loop. It’s about 50 units, all rental. Developer is going to charge approx. $2/sq ft. For a loop unit, $2.50 might be a little high, but not drastically high. Sure, we could be in a rental bubble that’s going to bust, but if you have the extra capital, why not profit?
Gramin , this is a middle class building, what do you expect for?
The price is actually pretty reasonable given the good location, amazing view, and low HOA.
Sales has been great if you check the records.
“I personally enjoy the low assessment/amenities in my building. I want to spend my money as I see fit instead of funding some craptastic gym that only creepy people use.”
Totally agree. Though I do believe those assessments will go up. Last I checked, the developer had yet to give control to the owners. I don’t know if they’ve reached the legal threshold yet, but I could easily see those going up once the owners take control. And if I recall correctly, there’s a new dog park next door. I believe the city funded its development but 235 is responsible for its maintenance. Again, added costs that might not be accounted for yet. I’m always cautious of a developer ran HOA.
Goes back to last week’s convo. Yes, there are alot of people who either have the income themselves for these really expensive units or are on Daddy Warbucks payroll. But there are alot of people who can’t afford or don’t want to pay over 2k for a 1 BD. Do banks even consider consumer demand when approving these construction loans? Seems like they didn’t learn their lesson the 1st time.
Do you like working in a cubicle? At 235 W Van Buren you can live in one, too. I am shocked that someone is paying over $3k to rent this unit. The neighborhood there is nonexistent. You’ve got the financial district, the jail, the CTA, and that’s about it. The building also does you no favors by having *zero* amenities. It doesn’t even have a four-pipe HVAC system! I love the look of 235 W Van Buren on the outside, but that’s all it has going for it. Cheap, cheap, cheap.
“Sales has been great if you check the records.”
What do you define as great? I have checked the records and they were pitiful. The developer had to launch a rent to own program because they weren’t selling and needed the cash flow. They got an extension on their loan last year and it should be maturing shortly. The building went to market in June 2009 and still has unsold units. At the start, they were selling 20-30 units a month… now they’re lucky to sell15 units a quarter. And now that they’re competing with resales in the unit, I don’t understand how they can justify those prices. Case in point… this posting! Selling for 10% less than original purchase price (and will probably sell for 20-25% lower) and on a higher floor than 2601, which is listed 15K more than this unit. CMK needs to get their heads out of their you know what.
The assessments in my 6 year old 2/2 are 360 a month and include heated parking, gas, cable, and internet and all the communal stuff trash, communal electricity, elevators, security camera system, door system, snow removal, yadda yadda yadda so I don’t think these will go up that much. And yes, our building has a pretty good reserve as well.
I don’t want to pay for a pool, doorman, tennis court, concierge or wtfever these other buidlings have that rack up the assessments and i would only use a few times a year.
the ONLY thing I wish my building had that it doesn’t is a rooftop deck, but I’ll live…
Comment re: the square footage…
2601 and 3501 are identical floorplans. The difference in sq. footage is that the broker included the 35 sq ft balcony in their listing. The unit is 1292 sq ft with a 35 sq ft balcony.
Amazing views? Maybe if you face south. But north-facing units like this one look right into CBOE.
I would stay away from this building, I’ve heard terrible things/reviews about the developer CMK. Personally I don’t like the location either though I can see why some might.
elliot just dialed jz’s #
Dan2, this is west of cboe a block or 2. it is on the east side of franklin.
that suburban kid who tried to blow up cal’s bar might have gotten a chunk of this too if his bomb wasnt fake.
“Amazing views? Maybe if you face south. But north-facing units like this one look right into CBOE.”
When did the CBOE move?
Last I knew, it is east of this place, and set back from Van Buren enough that it shouldn’t even block (tho it does affect) the *east* views from here.
One photo of this listing showed the CBOE pretty prominently outside of the window. But I’ll stand down because it seems my post was incorrect. Thanks for setting me straight.
“One photo of this listing showed the CBOE pretty prominently outside of the window”
Yeah, but (1) this is a corner unit with east and north views, (2) that pic was taken from an unfortunate angle to make the bedroom seem a bit bigger, and (3) there is another pic that shows the direct view to the east, which does include the CBOE, but is nothing like the entirety of the view.
I rented in this building last year for a year. It is a middle of the road, rental quality building. The floors in my unit began to have 1/2 cracks in between each piece down my long hallway. The units are very quiet from the concrete construction. It seemed like almost half of the people there were renting and in college or grad school. I rarely had to wait for an elevator. My commute to the financial district was less than 5 minutes from door to door. If it was raining, I would run and get their in 45 seconds. There is NOTHING happening there on the weekends. The whole area is flooded with tourists going to see the Sears Tower. Transportation options are unbeatable with the red, blue, brown, purple, pink, orange, and green lines withing blocks, along with the Rock Island, Union, and Ogilvie stations. Why this owner has two space is beyond me.
“I don’t want to pay for a pool, doorman, tennis court, concierge or wtfever these other buidlings have that rack up the assessments and i would only use a few times a year.”
But this building has a doorman. And it has a lot of hallways (all of which will have to be re-painted and re-carpeted, sooner than you think.) I could go on and on about the costs of operating a high rise but I’ve already done that in prior posts so I’ll refrain from doing it again.
“I don’t want to pay for a pool, doorman, tennis court, concierge or wtfever these other buidlings have that rack up the assessments and i would only use a few times a year.”
But this building has a doorman. And it has a lot of hallways (all of which will have to be re-painted and re-carpeted, sooner than you think.) I could go on and on about the costs of operating a high rise but I’ve already done that in prior posts so I’ll refrain from doing it again.
“With companies moving to downtown (UA moving their headquarter to Sears Tower), this building is a great rental property.”
The Sears has been well rented for years. It’s not going to matter to the buildings nearby that United is moving in there. Besides, United was in Elk Grove Village for forever. The people that work there are likely married and have kids. We’re not talking about Google here. They’re not the target audience for this building.
Also- there are two or three new rental buildings scheduled to be built just a few blocks away from this building- on the west side of the river (over near Presidential Towers and Union Station.) Unclear if they’ll all get built- but Crain’s has done articles on them. So anyone who thinks there isn’t going to be competition for this building (as far as rentals) is wrong.
“This is a very low amenity building with a TON of units.”
You still have to pay for the doormen.
Since September of last year United Airlines has added 360,000 square feet to the 470,000 square feet it leased in the Willis Tower in 2010. According to the Sun-Times, the 4M+ square foot building was 17% vacant in September of last year.
http://www.suntimes.com/business/roeder/7507464-452/after-911-willis-tower-defeats-fear-and-adapts-to-compete.html
None of those numbers square with Sabrina’s contention that “the building has been well rented for years.” But then, Sabrina’s big on sweeping statement and short on numbers. Witness her (?) useless speculation about the demographics of United’s work force.
There are two buildings proposed west of the river and east of the expressway. One is the former Catalyst site, 630 W Washington, which Google places .9 miles from 235 Van Buren. The other is at 601 W Jackson and, according to Crain’s, is currently only under contract and may be seeking a zoning change. Both deals are years away, even if they’re able to secure financing. And neither is in the same rental sub-market as 235 Van Buren.
I’d suggest that you find a more authoritative source than Sabrina for the costs of operating a high-rise building like this one. Tell us, Sabrina, is the cost of door staff, for example, more or less than $30 per month per unit when amortized over 714 units? When will the HOA replace hall carpeting and repaint the halls and what will that cost and what percentage of the cost will be covered by reserves?
Visit the building and check out the units and views. Talk to some owners. Walk the neighborhood – and yes, there is a neighborhood. Ask someone knowledgeable to review the operating budget for the building. In short, encounter reality rather than settle for idle chatter.
As most of you already know, 235 Van Buren is a client.
“You still have to pay for the doormen.”
Yes, but it’s divided by 714 instead of 200.
714 units? That’s hard to believe CMK could cram that many in a building of that height. Maybe they were inspired by Harry Weese who did the nearby MCC that has 725 units and a rooftop deck, and work out facility:
Location Chicago, Illinois
Status Operational
Security class Metropolitan Correctional Center
Population 725
Opened 1975
Managed by Federal Bureau of Prisons
Warden Catherine Linaweaver
Joe Zekas – pissing on opinions since the beginning of the internet.
“Visit the building and check out the units and views. Talk to some owners.”
Oh, I like that line… Joe, can you comment on reports that owners have been complaining on the owners’ forum/board and that the developer is now censoring said board? They even created a facebook page and separate board because the building is impossible to deal with. And any comment on their rent to own program? For a building that was supposedly financially solid and extended their construction loan for reasons other than financial hardship, it seems a bit strange that they would launch such a program. Cleary they’re not selling units. Again, this post is a prime example of that.
Owner is selling for 10% less than original purchase price and $15k cheaper than a same floorplan unsold unit that is several floors lower. Your resales are now becoming your comps. That’s bad news when resales are coming in 25-30% lower than original purchase price.
And you gotta love this comment from the unofficial 235 Facebook page:
“Best College Dorm EVER!!! Constant Parties. Broken Beer Bottles cast from balconies high above. ever-present smell of Marijuana in the hall. Oh college…how I’ve missed you. If you’re into re-indulging in that whole college experience thing again, than 235 is for you. A great place for you and your family….until the sun goes down.”
Not buying in 235… best decision I’ve made in a long time.
Sabrina’s opinions are a hell of a lot more informed than yours, Zekass. She is not being paid to shill on the internet on behalf of developers, but the same cannot be said for you of course.
By the way, you didn’t do too great of a job for CMK here. You showed up late to the discussion and slung a few personal attacks, but didn’t really say anything that would make someone want to buy in this shithole of a building.
If I were your client you would be getting an angry phone call tomorrow morning.
Sales are a matter of public record. They’re happening, and anyone can verify that. The new format of the Recorder’s Office site, for example, makes it easy to see all the recent closings from the developer in the building. You can believe the data from the Cook County Recorder – or you can believe unhinged rants about sales from anonymice.
There’s nothing unusual about rent-to-own programs. They’ve been common in recent years.
Questioning Sabrina’s tenuous grip on facts is not a personal attack – unless you assume, in the CribChatter manner, that facts are irrelevant.
In my experience – and I’d suggest it’s considerably beyond anyone’s here – CMK is one of the more responsive and responsible developers in Chicago. If you think that statement can be bought, you are utterly clueless about me and the realities of my business.
“In my experience – and I’d suggest it’s considerably beyond anyone’s here – CMK is one of the more responsive and responsible developers in Chicago. If you think that statement can be bought, you are utterly clueless about me and the realities of my business.”
You didn’t disclose in this post that they’re paying you to say this. Does this post comply with the FTC guidelines? It seems like you’re taking an “everyone knows this is just advertising” position but I’m not sure that’s sufficient. Any do you think that your experience has any weight in this argument given that you are being paid to say these things?
“Any do you think that your experience has any weight in this argument given that you are being paid to say these things?”
Oh, can I answer this question?! No. As I’ve said many times before, Joe only shows up when someone is talking about one of his clients. He has no interest in the Chicago real estate market, and probably no interest in real estate whatsoever. His only interest is economic… economic in the sense that unless he’s getting paid, he’s not offering his “opinion.”
JZ stated: “None of those numbers square with Sabrina’s contention that “the building has been well rented for years.”
Her contention appears to be supported by your link:
“Still, Willis Tower has held its own over the last decade, replacing tenants who have left. Its current vacancy rate of 17 percent is lower than the building had during the 2006 to 2008 period.”
That vacancy appears in line with the market.
http://www.ftc.gov/os/2009/10/091005revisedendorsementguides.pdf has the FTC guidelines. I think that there has also been some local enforcement in Illinois by the Attorney General on this topic.
JJJ,
I understand the FTC guidelines. Take a break from blowing smoke and try to understand them yourself. While you’re at it, re-read what I said.
G
You might try to understand Sabrina’s point. It’s not supported by my link.
“Take a break from blowing smoke…”
Right, I’m the one blowing smoke. There is no particular shame in marketing; it’s your lack of candor at issue. I can see why everyone here is so happy that your clients’ projects are doing so poorly.
“You might try to understand Sabrina’s point. It’s not supported by my link.”
Of course it is. You are just paid to say otherwise.
JJJ,
It would be hysterical to be charged with a lack of candor by an anonymouse – if it weren’t so pathetic.
If you don’t know that I’ve fully complied with FTC guidelines you need to take a remedial reading course. I suspect you do know it and are relying on the ignorance of many CCers who might be fooled into thinking otherwise. Typical CC approach – just throw some mud and hope it sticks.
G,
The probably you have with your argument is that even some of the CC regulars have some intellectual integrity. I’m paid to be credible and factual.
Sabrina said, in effect, that renting 100s of o1000s of square feet in a building would have no impact on the demand for housing in nearby buildings. That’s an argument that’s credible only in the fantasy world of CribChatter.
JJJ:
Example 3??
“Willis lost an anchor tenant, the consulting firm Ernst & Young, in 2010. However, the owner of United Airlines more than took up the slack and is taking 650,000 square feet in the tower by 2012.”
She was saying the building has always had a relatively stable list of tenant, and this “new” UA lease is nothing earth-shattering that it’s going to solve CMK’s dilemma. I think E & Y would probably have been the better tenant to have a positive impact for CMK. UA less so.
Garmin stated: “The building went to market in June 2009 and still has unsold units. At the start, they were selling 20-30 units a month… now they’re lucky to sell 15 units a quarter.”
JZ replies: “Sales are a matter of public record. They’re happening, and anyone can verify that. The new format of the Recorder’s Office site, for example, makes it easy to see all the recent closings from the developer in the building. You can believe the data from the Cook County Recorder – or you can believe unhinged rants about sales from anonymice.”
Here’s what I have for 235 W Van Buren. Judge for yourself who should be believed.
Total closed to date appears to be 461 of 714 units. 229 unique units have been offered for rent on the MLS, 182 unique units have been rented on the MLS.
Closed per half:
1H2009 39
2H2009 196
1H2010 61
2H2010 43
1H2011 29
2H2011 28
1H2012 35
2H2012 (to date) 30
Thanks, G. I’ve called JZ out before on 235’s sales record and produced those same numbers. His response, “Oh, I haven’t looked at those recently.” It’s interesting that JZ challenges us to pull the data, and when we do, we can easily prove 235’s horrible sales history. You would think that someone who’s paid to schill for a developer would try to argue points that are in his favor. If I were CMK, I’d someone else.
” I’m paid to be credible and factual.”
Every dollar they pay you is a dollar too much by those metrics.
I like when joe z talks about certain developers like they are superheros or saints. for all I know they might be, but then why would they have to hire somebody to blow smoke?
wonder if they bring him out to bars as a wingman . and is he more effective than clios russo vik.? less expensive?
“You would think that someone who’s paid to schill for a developer would try to argue points that are in his favor.”
I would think someone who is paid to shill by a developer would try to deceive, distract, distort and obfuscate in order to encourage new buyers. I’ve yet to be disappointed.
He probably learned a few tricks hanging out with Hef at the playboy mansion back in the 70’s
“I like when joe z talks about certain developers like they are superheros or saints.”
I love it. However, he didn’t do that with CMK this time. In fact, I think he is damning them with faint praise. Do you suppose their check is late?
“CMK is one of the more responsive and responsible developers in Chicago.”
Isn’t Colin Kihnke on some tropical island spending his billions?
” I’m paid to be credible and factual. ”
so when are you going to start being credible and factual?
otherwise you are just ripping your clients off.
Sonies – Turks and Caicos: http://www.timespub.tc/2011/03/a-fighting-chance/
While you’are at it, G, offer some perspective.
Have any downtown developments sold more units during that same time period?
For me to say that a developer is responsive and responsible is high praise.
You guys can spin any fable you’d like – but against that I have a long, highly visible track record of not behaving as you say toward the industry. And unlike you, I have the decency and the guts to put my name behind what I say.
“I have a long, highly visible track record”
Yes, you do. Which is exactly why your “opinions” carry zero weight.
“While you’are at it, G, offer some perspective.
Have any downtown developments sold more units during that same time period?”
Typical. “Some” means more than one. Let me help. Have any had more units to sell? How many have a 3+ year inventory of unsold units?
Another perspective: How many with vast unsold inventory are already at a high % of rentals?
“And unlike you, I have the decency and the guts to put my name behind what I say.”
Huh? I have the decency and the guts to put my name behind what I’m paid to say, too.
G
“Some” has other meanings also.
235 Van Buren’s sales record in the very difficult market of the past few years, compared to other developments, speaks well for it. That’s the perspective that’s needed and that cuts radically against the picture that CCers want to paint of it.
Those 461 buyers (using your number) collectively know a lot more about real estate than the few dozen idle chatterers here.
“235 Van Buren’s sales record in the very difficult market of the past few years, compared to other developments, speaks well for it.”
What other developments? Nearly all of the other buildings went rental. That’s why inventory of new construction is now so low. If you were to strip out the Museum Park buildings that went into distress- it’s even lower.
“She was saying the building has always had a relatively stable list of tenant, and this “new” UA lease is nothing earth-shattering that it’s going to solve CMK’s dilemma. I think E & Y would probably have been the better tenant to have a positive impact for CMK. UA less so.”
Yes- thank you Dan. You explained what I was trying to say much better than I was able to do. It’s not like the Sears Tower was just built. It’s been there for nearly 40 years with a bunch of tenants coming and going.
Sabrina and Dan team up to try to weasel out of what Sabrina clearly said:
“The Sears has been well rented for years. It’s not going to matter to the buildings nearby that United is moving in there.”
Or to put it in plain English: filling 100s of 1000s of vacant square feet will not create demand for renting / buying in nearby buildings. That’s simply a bizarre position to take – but standard fare for CribChatter.
Gene Stunard, who ran Appraisal Research for years, used to say there was a direct, strong and positive correlation between an increase in occupied office space downtown and the demand for downtown housing. He based his statement on mounds of data. What’s going on at Sears / Willis lately is not simply a matter of “a bunch of tenants coming and going.”
What about those 461+ sales in a disastrous market, Sabrina? How do you pretend them away? Or do you think you’ve already done that? Do you think it’s irrelevant to 235’s appeal that other buildings went rental and 235 didn’t?
If all further commenters have to offer is more personal attacks and denial of real estate realities, I don’t plan to respond further.
“Gene Stunard, who ran Appraisal Research for years, used to say there was a direct, strong and positive correlation between an increase in occupied office space downtown and the demand for downtown housing.”
There aren’t any new large office buildings in that area of the Loop. The Sears Tower and 311 S. Wacker, and all the rest of the bldgs. were built decades ago. They used to have higher occupancy rates than they do today. So where was all the “demand” that Stunard claims? Let’s go back to 1998, I bet that entire submarket had virtually the same amount of leased space, yet nobody was clamoring for a residential building located at 235 W. Van Buren. Why now? You can see that the location isn’t truly needed based on poor sales.
“Or to put it in plain English: filling 100s of 1000s of vacant square feet will not create demand for renting / buying in nearby buildings.”
You’re forgetting that E & Y vacated probably even more square footage. Why are you forgetting that? In the grand scheme of things, UA’s lease is not a big deal.
From 2008, you can see what was gained, was merely a replacement for what was lost. No net increase. The bldg. still has the same square footage.
The loss of Ernst & Young will leave a gaping hole in the 110-story Sears Tower. The firm accounts for 19% of the landmark skyscraper’s annual rental revenue, and it is the tower’s biggest tenant, with a lease for 387,000 square feet that expires in 2012.
Ernst & Young occupies about 237,000 square feet, subleasing the rest of the space to other tenants, according to a spokesman for U.S. Equities Asset Management LLC, the building’s management and leasing agent.
“We are very confident that over the next three and a half years we will lease the vacated space and retain these subtenants,” the spokesman says in an e-mail.
“That’s the perspective that’s needed ”
Spoken like the paid shill that you are. Needed for what? Unloading more units for your masters?
The perspective that’s needed is how your tune hasn’t changed even with all the suckers you caught who are now underwater in this building. Your oft-heralded Appraisal Research must have seen the “mounds of data” pointing to the obvious collapse? Did they fail to warn their long list of developer clients? You certainly never acted like you were well informed. You fluff them all the time here, yet they didn’t let you know what the data clearly illustrated? They are your experts, but they missed the obvious? Either you knew and went on deceiving, or, they aren’t very good at what they do. Would you clear that up?
“Or to put it in plain English: filling 100s of 1000s of vacant square feet will not create demand for renting / buying in nearby buildings.”
You are assuming all that space was vacant. I believe this assumption is false. Several companies either will not have their leases renewed when they expire and the space will go to United or will move within the tower to accommodate UA. This supports Sabrina’s claim that there aren’t a ton of new workers in the area, simply a shuffling of them.
“You are assuming all that space was vacant. I believe this assumption is false. Several companies either will not have their leases renewed when they expire and the space will go to United or will move within the tower to accommodate UA. This supports Sabrina’s claim that there aren’t a ton of new workers in the area, simply a shuffling of them.”
Right. It’s not like the Sears was half empty or anything. United is moving 2500 people downtown. It will just be a trickle who will want to live anywhere within walking distance of their office building. They have families and school issues and whatnot to figure out.
And as someone who lived in the neighborhood recently, there really isn’t a neighborhood there. Try as developers might want to say there is. West of the Sears, over the river, it’s better than it used to be. I was excited when the PotBelly’s opened, for instance. But that’s the extent of it. And the further west you go at least you can walk over to Greektown.
This is an area where things are actually closed on Sundays (restaurants etc.) It’s pretty much no man’s land.
But it’s not a bad place to land for a year or two until you figure out what else you’re doing. That’s why it’s a good place to rent.
I’ve only met one couple ever that lives in the loop
Needless to say they were new to town, recent graduates from far away lands and I don’t believe they still live there
“What about those 461+ sales in a disastrous market, Sabrina? How do you pretend them away? Or do you think you’ve already done that? Do you think it’s irrelevant to 235?s appeal that other buildings went rental and 235 didn’t?”
Many of those sales were entered into before the extent of the collapse was obvious. I’m sure if you asked those investors today (and that’s who most of them were, let’s be honest) they probably wish they had never closed on those units.
Also- there were buildings that did FAR better than this one in the bust (which never went rental.) They cut prices and sold out their buildings quickly. SoNo comes to mind. I’m still not sure how they got the prices they got in there- but they did. And now resales are going on – but at least those sellers aren’t competing against the developer.
235 basically went rental anyway. What’s the percentage of units rented out? Is it more than half? I’m assuming it is given the sheer number of rentals I see in there on Craigslist and the MLS (not to mention the developer renting them out as well.)
I support more residential construction in the loop. It makes sense that some developers are going to build more rental towers in the area.
one thing that does bode well for this building, and I’m surprised jz failed to mention, is the relocation of chicken planet. it is very close now so anyone who buys here and is at home during the week will have another delicious lunch option.
can someone photoshop Joe Zekas’ face onto Baghdad Bob’s body?
“There are no American infidels in Baghdad. Never!”
“I’m paid to be credible and factual.”
“there were buildings that did FAR better than this one in the bust … SoNo comes to mind.”
He did limit the comparison to “downtown” buildings.
R&D 659 was selling at the same time as 235 W Van Buren and managed to sell out very quickly. I would think that counts as a “downtown” building as much as 235 does. The reasons it sold out and didn’t have to go rental are that they dropped prices to market levels and also didn’t have 2/2s under 900 square feet like this beauty in 235: http://www.235vanburen.com/site/epage/49931_658.htm?unit=2404
Who wants to buy that???
R+D began marketing early in 2006. 235 Van Buren came to market in September of 2007 – a very different time.
R+D announced its price cuts in June of 2009, the same month that 235 Van Buren began closings.
http://yochicago.com/sales-update-mesirow-financial-slashes-prices-on-all-rd659-condos-by-23-to-39-percent/8872/
R+D’s price cuts simply brought it into line with the pricing of similar units at 235 Van Buren, which were arguably already priced at market. An 1,128 square foot (balcony included) 07-tier unit at 235 Van Buren was selling for $100K less ($320K vs $420K) than a comparably sized 2/2 at R+D before R+D’s price cuts.
Units continue to sell. Isn’t that an indication they’re priced at market?
Let the meaningless chatter, unwarranted assumptions and juvenile insults proceed. It’s pretty much all most CCers have to offer.
R+D still had a ton of unsold units (I believe at least 60% of the building) in 2009 prior to the price cuts. 235 Van Buren was starting closings at around the same time as the price cuts at R+D.
There *are no* comparable units in R+D that I know of, and I live here. The smallest 2/2s are over 1,100 square feet if I remember correctly (not counting their balconies). That’s 200+ square feet of extra space. An 1,100 square foot unit is over 20% larger than a 900 square foot unit. That’s a big difference. On top of that, R+D has a pool, gym, party room, and 4-pipe system vs 235’s 2-pipe. My 1/1+den in R+D is larger than the 07-tier 2/2 in 235 Van Buren. When I purchased, I looked at both buildings, and R+D was the clear choice.
Joe, I’m a fan of your site, but you could at least remain silent on the subject of 235 Van Buren when the facts pretty clearly indicate that 235 is priced too high. We could also look at Silver Tower, which went to market around the same time in River North and now appears to be sold out. CMK built tiny units in a zero-amenity building and tried (and continues to try) to price it on par, from a square footage perspective, with much more desirable buildings. That’s why they have sold out and 235 has not.
“Let the meaningless chatter, unwarranted assumptions and juvenile insults proceed. It’s pretty much all most CCers have to offer.”
I’ve asked this question before Joe (when you complain that we’re all meaningless)- Why are you here then? Only because you’re being paid by your clients?
If that’s true- how sad for you. What a waste of your life to interact with all of us know-nothings. Time is too precious.
235 has sold about as many units as both of those projects combined. If it had the same number of units as either of those it would also be sold out, despite having come to market much later. It continues to sell, and that’s a far more relevant data point as to whether it’s priced to market than the opinion of CCers.
Whether those buildings are more “desirable” than 235 varies, of course, with buyers’ differing desires. Some people obviously prefer the low-amenity / high unit-count 235 on the assumption that it will have lower assessments. Some people prefer the views from 235. Some prefer the aesthetic. Some prefer the location. Etc.
Did Mesirow ever dispose of the last 19 units it owned at R+D?
Sabrina,
I don’t consider my comments as interacting with CC regulars. That’s pretty pointless. They’re addressed to the fact-oriented CC readers (some of whom are doubtless regulars) who have an open mind.
It’s sad that I’m paid to be here? What’s sad is sloppy analysis, allowing ill-informed opinion to pass as fact, and pretending to knowledge that one doesn’t have. What’s sad is chattering about real estate without having seen it or hearing about it from the people who make it happen. What’s profoundly sad is nurturing racists and anti-Semites and their vicious slurs against honest people.
Sigh .. failed to copy and paste the first part of my previous comment:
235 Van Buren has nearly 500 more units than R+D and Silver Tower. 235 came to market 18 months later than R+D and two years later than Silver Tower, which began marketing in September of 2005.
http://yochicago.com/silver-tower-to-rise-in-river-north/10337/
“It continues to sell, and that’s a far more relevant data point as to whether it’s priced to market than the opinion of CCers.”
So- by your logic- if only one unit sells every quarter then it is “priced to market” and a success.
“It’s sad that I’m paid to be here?”
Yeah- actually it is.
Joe, it doesn’t matter when a project was first announced. I’m talking about 2009 and why most buildings (or all of them?) other than 235 Van Buren which still had a large number of developer-owned units for sale at that time have sold out while 235 has not sold out.
On 12/14/09, you wrote an article about Silver Tower in which you said:
“According to sales records from Cook County and Redfin, 61 of Silver Tower’s 233 homes closed between July and early December at an average price per square foot of just over $400. A price sheet dating back to August showed about two-thirds of the building under contract.” (http://yochicago.com/sales-update-price-cuts-and-resales-emerge-at-silver-tower-in-river-north/13201/)
On 6/4/09, you wrote of R+D, “Since unveiling the price changes last Friday, buyers have drawn up contracts for 40 units, bringing sales to just under 60 percent.” (http://yochicago.com/sales-update-mesirow-financial-slashes-prices-on-all-rd659-condos-by-23-to-39-percent/8872/)
On 7/29/09, you quoted a Sun-Times piece which mentioned R+D and 235 in the same sentence as both being plagued by people walking away from their contracts. If we start from mid-2009, all three of these buildings were selling a large number of developer-owned units and all three had suffered from people walking away from their contracts. Since that time, two of those projects completed sales while the 235 is still less than 75% sold (based on the HOA still being under developer control, I assume that’s accurate). The number of units sold in each building is not as meaningful to me as the percent sold, especially since 235 dwarfs pretty much every other building in the city due to its size and density. You would be hard pressed to find a building with more units per square foot in the downtown area, and I think that’s part of the problem.
Who the hell is paying you Joe, the (real estate) Ministry of Truth?
Seriously, trying to contain and control internet conversation (that isn’t even your frickin website) seems like a fools errand and a complete and total waste of money for whoever is stupid enough to pay for it, but kudos to you for getting paid to something so useless.