$400k Reduction for the Japanese Gardens: 201 W. Grand
We’ve chattered about this penthouse unit at 201 W. Grand in River North several times now- the last time in April 2008.
Back then, we all marveled at how cool the unit was with its one-of-a-kind Japanese gardens and how you couldn’t really put a price tag on something so unique.
The unit is still for sale and has been reduced by $400,000 since its original listing last fall.
Here’s the listing again:
SPECTACULAR RIVER NORTH PENTHOUSE IS A VISUAL LANDMARK- 6000SF OF CONTEMPORARY INDOOR/OUTDOOR LIVING, 360* VWS OF THE CITY, FLR TO CEILING WINDOWS, 20FT CEILINGS.
THE 2 BR, 2 1/2 BTH SKYHOME IS A TRANQUIL RETREAT WITHOUT THE INTRUSION OF DOORMEN OR BLDG AMENITIES. THIS ONE-OF-A-KIND PROPERTY FEATS 3000SF JAPANESE TERRACE W/PONDS, FOUNTAINS & 12FT BONSAI TREES, 2 DEEDED PRKG SPC’S INCLD.
Unit PH2: 2 bedrooms, 2.5 baths, 3000 square feet, 2 parking spaces included, 3000 square foot terrace
- Sold in April 2004 for $1,700,000
- Was listed in September 2007 for $3.95 million
- Withdrawn from the market
- Was listed in April 2008 for $3.79 million (2 parking spaces still included)
- Reduced
- Now listed for $3.59 million (2 parking spaces still included)
- Assessments of $1900 a month
- Taxes of $24,771
- Koenig & Strey still has the listing
I couldnt afford this place even if somebody gave it to me…
Even a beautiful, unique condo can be overpriced.
$4K per month in taxes and assessments — you probably could rent a 3000sqft condo in the area for not much more (if any existed…). I think that $1.50 or $2/sqft is a plausible rental rate for Streeterville or Gold Coast, even for a high tier place.
Add in the opportunity cost (or loan interest) on the listing price and this is seriously expensive — 25bps per month (3% per year) is $9K.
This will be a 2004 rollback, as will everything else.
The place really is special, but there just aren’t as many people running around who could think they could afford something like this.
Luxury developers really lost sight of demographics and other fundamentals during the boom. They clearly didn’t bother to count the number of people available to buy who could pay anything like $3MM or $4MM for a downtown condo. We are talking about a very tiny sliver of the population here, but what with the number of upper-bracket units being built, you’d think 20% of Chicago’s population were people with a net worth of $5MM or more.
Also, there’s the neighbhorhood. River North is not Streeterville. It is too close to spotty areas and has known public safety problems. It just doesn’t command the kind of money Streeterville does.
That said, I am somewhat surprised that the seller is cutting the price so dramatically. This place is looking for a *very* special buyer — piles of money, looking for a unique place (not a generic Spire unit), into the eastern/modern mix (or willing to spend a bit redesigning). A year on the market should be nothing unusual for this sort of place.
I wonder if they were failing to get any attention at the old price, or if the feedback was all decidedly negative — “I’d take it at $2.5M” sort of comments.
“This will be a 2004 rollback”
Okay, but what value the owners’ buildout? Comments to the prior post implied that the 2004 price was basically for just the space.
“failing to get any attention at the old price”
It’s a $3.5mm 2 (TWO!) bedroom unit without much of a real view in a building with no doorman or other services but that has high(-ish) assessments. It’s looking for a buyer who’s loaded and wants exactly that design. Larry Ellison would probably be perfect for it, but I don’t think he comes to Chicago very often.
“It’s looking for a buyer who’s loaded and wants exactly that design.”
Essentially my point — is a $400K drop in price really going to matter on a property this special in this bracket?
Knock $1M off and you might expand the market enough to sell this year, and I expect that it would sell in a few weeks at the 2004 price. So long as it stays above $3M (and probably even down to $2.5M), they are waiting for that one buyer who absolutely must have it — figure on it taking a few years…
When you have a place in that price range you’re severely limiting your audience. And then you go and turn it into a Japanese garden?
Lets cut a thin slice from a thin slice! Brilliant!
Around $1,200 per sqft for a 2 bedroom in River North? The realtor did a nice job spinning the building’s lack of amenities by saying “tranquil retreat without the intrusion of doormen or building amenities.”
I don’t think the buildout is worth an additional $2MM, and I don’t believe any of the relative handful of qualified buyers for this place will think so, either.
In any case, a person who has $2MM -$3MM to pay has a lot of choices of distressed properties, and will be driving a very hard bargain. And it’s almost a rule that you don’t recover the money you spent on improvements in a normal market, let alone a declining one.
No matter what, a 400K reduction is big even if it applies to people that are very price insensitive. This is even more relevant now because many of the super-rich are suffering rather substantial drops in their net worth right now.
If the owners want this unit to sell, I think this will have to drop the price under 3 million… fast. With the current climate, if they don’t sell soon, this unit could start declining even more rapidly as extraneous luxuries tend to be the first to go.
Yeah, we’ve talked about the assessments here before, and I still just DO NOT GET IT. How are the assessments $1900 with no doorman? No pool? In a new-ish building?
I absolutely adore this space and the garden, but even if I had 3m to spend on a space the assessments would give me pause. Maybe its because some units were combined to make this one?