Bank-Owned 2/2 now priced at $259k: The Sterling at 345 N. LaSalle

This news warrants a weekend posting.

Thanks to Mike for pointing out that the 2/2 we’ve chattered about before in The Sterling, at 345 N. LaSalle in River North, has dropped in price again.

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Just a recap:

Unit #206: 2 bedroom,  2 bath, around 1200 square feet

  • Sold in September 2004 for $445,000
  • Sold in September 2005 for $600,000
  • Went into foreclosure
  • Bank originally listed it for $299,000
  • Went under contract in 2 days
  • Fell out of contract
  • Has been listed for several weeks at $299,000
  • Now reduced to $259,900
  • Assessments of $476 a month

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It is now listed less than all of the one bedroom units in the building.

Sudler Sotheby’s has the listing.

Another foreclosure we’ve chattered about has also reduced its price.

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Unit #4701: 3 bedrooms, 3 baths, penthouse, 1900 square feet

  • An ad on Craigslist says it sold in September 2005 for $895,000
  • It also sold in February 2005 for $719,500
  • Was listed at the end of December 2007 for $725,900
  • Now listed at $709,900
  • Assessment of $816 a month

Jax Realtors has the listing.

22 Responses to “Bank-Owned 2/2 now priced at $259k: The Sterling at 345 N. LaSalle”

  1. Streeterville Realtor on February 9th, 2008 at 9:00 am

    Hey,

    Has anyone seen this particular unit? I’ve taken a look at some previous foreclosures and they need work. Forget about the cheap cabinets and white appliances that are universal to the building. The foreclosed units need new flooring, new doors, often wall repair work, paint, etc.

    I’ve thought of buying one of these, putting in wood floors, painting and eventually redoing the kitchen and blah white bathrooms but when I price it all out, I would have to plan on living there for a minimum of 14-20 years to make money. Let’s be honest, you would probably have to spend close to 100K to make this unit beautiful and then stay put for a long time.

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  2. Does anyone know if there is something else going on with it other than just cosmetic changes?

    Isn’t it possible that even if you “make it beautiful” (as Streeterville Realtor said), you still wouldn’t be able to flip it for $400k anyway (or not for several years- at the earliest.)

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  3. Streeterville Realtor on February 9th, 2008 at 9:09 am

    I think that if you put in wood floors throughout, painted, put in SS appliances, and staged it (forget redoing the kitchen or bathrooms), you could list around $329,000-$340,000. Factor in all of your costs, such as closing costs, agent fees, assessments, taxes, carrying costs, appliances, professional painter etc, and I don’t know if you would make anything.

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  4. There are no pics of the 3/3’s kitchens, bathrooms, etc. anywhere. What are they hiding? From past posts, my guess is that the bank should be happy to get $400K for this, and the new owner would need to spend about $100K fixing it up. Hmmmm…. maybe I’ll go take a look…

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  5. Doesn’t 206 face the back over the garage driveway? If so, it has no view (being on the second floor) and I am afraid it may look only at the brick building facade across the alley. It would be rather noisy to say the least. Does anyone know what the percentage of renters is in this tower?

    P.S. Sabrina, Socketsite has a posting about Millennium Park and how S.F. wants to TRY to build something similar. The responses are funny to say the least.

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  6. But the question is has anyone seen drops in value like this of 1/2. Is this the first of many throughout the city with all the new supply of condos coming on line??

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  7. The Sterling is a unique(ly bad) building. The developer has a very bad reputation for quality, and for building for investors rather than residents. Thus, when a market goes bad, the values really tank. No one can predict the future, but I think even the most bearish visitors to this site don’t predict those kind of drops in any reasonably well-built building in areas like, say, Streeterville, Gold Coast, Lincoln Park, or Lake Shore East. Sure, those are probably overpriced, too, but more on the order of 10% (in my opinion). But sketchier areas, like Bronzeville/Woodlawn, Rogers Park, Pilsen? I for one wouldn’t be surprised by drops of 50%. Maybe even more.

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  8. Doesn’t it come down to how many people bought with loans they couldn’t afford (less so in what building)?

    Also- the number of investors vs. residents will matter. The Sterling had a huge number of investor buyers. But other buildings have as well.

    The question is: will investors in the latest condo towers, who likely won’t be able to flip their units for much money (if any at all), be able to hold on? Or will they go the foreclosure route as well?

    Foreclosures in a building bring down the entire building- as we’re seeing with The Sterling.

    It’s not out of the realm of possibility to see the same thing happen in some Lakeshore East buildings, for instance. Flippers are swarming those buildings.

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  9. Yes, I agree the proportion of investors to residents has to a large factor (and counted it as one of the reasons the Sterling tanked–Invsco made a concerted effort to woo them). But… do you really think there will be those kinds of drops in flipper heavy buildings, such as 340 OTP? I don’t, and I guess I think so partly for the reason you stated–people who chose THAT building to flip have the credit scores and the down payments (meaning they are rich) to lose money for awhile and ride it out. Doesn’t mean they all will–but I just can’t imagine 20% foreclosures. At least I hope not. It’s true I’d love to pick me up a SE facing 2/2 at 340 OTP for about 400 grand… but for that to happen, the consequences for the Chicago market overall would be pretty devastating, and I certainly DON’T want that.

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  10. Kenworthey- I would agree with you that flippers in the more prestige buildings are probably of the slightly higher income bracket.

    But you’d be surprised.

    I personally know someone who makes $90k a year, has a house in the suburbs, and bought a 3 bedroom high floor unit at The Legacy for $900,000 (put down the $90k downpayment) to flip it.

    Do you think he’ll be able to ride out any downturn for, say, even a year? (where the rent, if he can even get a renter, doesn’t come close to covering his mortgage payment.)

    It has taken a few years for The Sterling foreclosures to come to light. It will take a few years for the others.

    Even a 10% reduction in the more prestige buildings will be pretty devastating to the entire Chicago market, don’t you agree?

    But, as I said, I agree that some flippers will be able to ride it out longer than others and you’d think they’d be the flippers in the more prestige buildings. But we’ll see.

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  11. I make about 35% more than your friend Sabrina and I wouldn’t even dream of trying to buy a $900,000 unit! What was this person thinking? My Administrative Assistant bought a condo in Lakeview for $350,000, and unless Daddy gave her the money, I still cannot figure out how she is making the payments, and I am not sure I want to know.

    Great Post on Socketsite btw :). I think S.F. has a little Chicago envy.

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  12. He was buying as an “investment” and believed that real estate could only go up.

    It’s not going to be pretty when he has to close on it. But maybe he’ll walk away from his $90k instead. I don’t know. The Legacy isn’t scheduled to be finished until 2009 (at the earliest.) More likely 2010.

    I agree with you about SF. They go on and on about their highrises there which would just be so-so product here in Chicago. They have no idea the finishes that we put in our units!

    I really do like SF however. Great neighborhoods and some great housing stock. But you just can’t beat the bargain that is Chicago (except for today, when it’s about to be negative 20 degrees outside.) ha!

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  13. I checked out this unit today. Carpeting stained everywhere and needs replaced. Walls are marked up and need painted. One small counter area is (ugly) granite and the rest is formica that has burn stains and needs replaced. Appliances are white and seem operable. Bathrooms are white and seem in fair shape. Unit is on 2d floor so you have street noise and the view is the old traffic court building and you look out on the roof of the rest of the building.

    Management told me that of the approx 380 units in the building, approx 260 contain tenants PLUS some additional number for corporate (hotel) housing but she refused to tell me the number that are leased as hotel units. Doorman was rude. Hallways look like a rental and need updating. The special assessment I was told was from 6-07 to 11-07 and was approximately 10K for the facade. I was also told that the mortgage company (Countrywide) has received 4-5 serious offers and will probably make a decision tomorrow.

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  14. Streeterville Realtor on February 11th, 2008 at 7:50 pm

    wow thanks Norm!

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  15. SR: You visit the unit and/or one of the ones who supposedly made a “serious offer?”

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  16. SR: You’ve visited some other foreclosures in the building- right?

    That tenant number is just incredible. I’m surprised any mortgage company is giving loans in that building.

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  17. What do you wanna bet that “some additional number” is at least 100?

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  18. I hope they left the scaffolding up from the facade repair work. How else to protect pedestrians from the falling knives?

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  19. G-
    Nice.
    🙂

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  20. Can anyone (perhaps a realtor) confirm if this unit is under contract, and if so, for how much?

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  21. If countrywide is using the same realtor for this property as others I have seen listed by countrywide, she is lying. Make a lowball offer, it can’t hurt. I’d give 10 to 1 that that is BS.

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