Are Prices Double Dipping in The Sterling? 345 N. LaSalle in River North
The Sterling, at 345 N. LaSalle, in River North once had the infamous title as the #1 foreclosure high rise condo building in the city.
We’ve been chattering about the foreclosures and short sales in the building since Crib Chatter launched in September 2007.
In the last 18 months to 2 years, while foreclosures continued in the building, prices seemed to have stabilized for the 2/2 units at around $250,000.
Two 01-tier 2-bedrooms sold as recently as June for the following:
- Unit #2001: sold in June 2010 for $255,000
- Unit #2201: sold in June 2010 for $250,000
But this 14th floor bank owned 2-bedroom recently came on the market at $237,500.
It hasn’t sold and was recently reduced $22,500.
There are no interior pictures so we don’t know if the kitchen and baths are in place (in some of the other sales, everything was intact.)
Unit #1701 is currently listed at $235,125 and is currently under contract (but that is also under the recent norm for sales of 2/2s in the building.)
Are prices double dipping in the building or is this one unit an aberration?
Timothy Blomquist at The Lake Shore Drive Group has the listing. See the listing here (no interior pics).
Unit #1401: 2 bedrooms, 2 baths, 1160 square feet
- Sold in April 2003 for $424,000
- Lis pendens filed in March 2008
- Bank owned in October 2009
- Originally listed in September 2010 for $237,500
- Reduced
- Currently listed for $215,000
- Assessments of $524 a month
- Taxes of $5055
- Central Air
- There are washer/dryer hook-ups in the unit
- Parking is rental in the building
- Bedroom #1: 12×10
- Bedroom #2: 16×11
sounds like a double dip to me!
I lived at Marina city when they were building this place. At the time it seemed fairly high end. Redfin shows unit 601 listed at $190k and the pics for that unit show low end cabinetry and typical white appliances. If units here went from 250k to 200k in the last 6 months that is scary. I am glad I don’t own a condo downtown.
Chibuilder – don’t rub it in!!
would this be an example of shadow inventory coming on the market given the long lag between it being bank owned and listed?
Those price drops are downright scary. Are we sure this is River North??? As far as a “double dip” in prices goes, I’d have to say that after seeing a couple units sell at this level I’d be very hesitant to pay any more for comparable units. I’d be interested in seeing what the interior looks like. I’m guessing it’s a bit on the claustrophobic side given the dimensions of the rooms and the overall square footage.
Definitely River North, but these drops are not widespread. Prices for loft building units have softened, but not the freefall like in Sterling. When I was looking about a year and a half ago, I remember a realtor telling me that Sterling is actually a nice place to rent in, but he advised never buying there.
Given the amount of rentals and distressed units in this building, the state of the HOA, and general construction quality, anyone looking at this building should be extremely cautious.
I’m glad I don’t own any condo I didn’t buy before 1998.
According to Michael David White at HousingStory.Net, while there are rather over 1200 foreclosed homes and condos visible on the market in Cook County, there are over 28,000 houses and condos that have been foreclosed lurking in the “shadow inventory”. That means only about 3.5% of the foreclosures are visible on the market.
What will happen when all this crap comes on the market? I verily believe that the fracas over “fraudulent” foreclosures might be a ruse perpetrated by lenders to keep this garbage off the market. But they will have to write all this down sometime.
I will buy a place I like if it is rental-parity or below, after including HOAs and insurance, and it’s in a stable building. Stable buildings are getting hard to find, though.
We are in weird times, folks.
“We are in weird times, folks.”
Hopefully with a gridlocked congress there won’t be any more bailouts to this sector. They have had enough already and its about time they were forced to eat the sh_t sandwich they created.
Unit 1701 that Sabrina referenced closed today for $232,000
“gridlocked congress”
Though I agree with you Bob about the bailouts (at least to the financial sector, fully in favor of the auto bailout), a gridlocked congress is worthless.
“there are rather over 1200 foreclosed homes and condos visible on the market in Cook County, there are over 28,000 houses and condos that have been foreclosed”
Does that includes the foreclosures of developers (ie, 100+ units at a time, sometimes explicitly converted to apartments)?
“a gridlocked congress is worthless.”
A worthless thing still has more value than something with negative worth (pro-bailout congress pushing leftist agenda).
“A worthless thing still has more value than something with negative worth (pro-bailout congress pushing leftist agenda)”
HAHAHAHA Well said Bob! Touche!
Though someone said this to me the other day (me, an independent – republicrat) and I feel it’s needs more attention:
“The Republicans are like that annoying little yipping barking dog that wont shut up until it gets what it wants and chases cars around. Well only two things happen when it catches the car…One, it lets go, satisfied with it’s effort, on to the next car. Two, it gets run over.”
Wonder what ever happened to that penthouse unit in this building. Can’t believe that it actually sold. I would have serious reservations being king of the hill at this garbage dump.
I think that the Sterling is a great example of becoming “the bad example.” My guess is that most local RE agents that work in RN are afraid to bring any client over to this building. It has a really negative history. If I recall correctly it was named the “highest foreclosure rate high rise in the city.” It will take decades or more to shake that moniker. Congrats to you current unit owners! American Invesco sure set you up for a massive fall. If it sounds too good…than it is too good.
Although in the minority, I like this building, it is quite nice and has great views. I would be willing to buy if it is less than renting, which these prices seem to be reflecting.
DD- to each their own, buy what you like and what you can afford…
But to make a point regarding your reasoning:
I will rent you my condo for 10k/month but sell it to you for 500k. Let it be known that its worth much less than 500k …get it?
I rent in this building (2br, 01 unit for $1800) and absolutely love it…
Did anyone see that #601 is up for $190!?!?!
I may try to scoop it up at that price… taxes are high but otherwise seems like a steal
http://www.redfin.com/IL/Chicago/345-N-La-Salle-Dr-60654/unit-601/home/28638986
140k tops… and it better include parking.
Its amazing for all of the fraud Invsco unleashed on the Chicago market there has been no criminal inquiries yet.
dd & pitdesi, though it may be a great building to live in, it’s still a very risky investment at any price IMO. Even if you buy below rental parity, if prices continue to drop and assessments continue to rise rapidly, you’ll not be able to sell w/o taking a big loss (if at all). It’s like signing a lease in perpetuity. If most of your monthly payment goes to assessments & taxes vs. P&I, you might as well rent.
“Its amazing for all of the fraud Invsco unleashed on the Chicago market there has been no criminal inquiries yet”
Hold on- I have probably been more negatively affected by Invesco than anyone (as I own 6 units in their condo conversion buildings). However, nothing they did was CRIMINAL at all. All of the investors at all of Invesco properties were grown adults making our own decisions. Nobody took them at their word – we all did our own research and took a chance. Also, none of my Invesco properties are doing that badly – 111 e chestnut prices are higher even now than when I bought (98). Also the Millenium building, prices are about the same (if not a little higher). So, you have it first hand – no criminal activity took place.
The value of this property will/should ultimately be the monthly carrying cost with mortgage, taxes and maintenace against the price it can rent for. Since its a highrise downtown its got a decent/liquid rental market to pull from.
True – Barbaro – and there will ALWAYS be many renters looking to live in this area. All the 20 something year olds who think that living downtown is “cool” and have easy access to clubs/bars/nightlife flock to this area. 2 bed – 2000-2500/month split two ways is how most of these guys roll. All in all, not a bad investment (not a great one, either though).
clio,
don’t be naive.
the odds that something criminal happened at Invsco are about 99.5%.
and i’m giving you .5% out of the kindness of my heart.
“the odds that something criminal happened at Invsco are about 99.5%”
where do get those odds? As someone who personally dealt with the Invesco higher ups and actually knew them, their families and business operations, the only they are guilty of is trying to make a buck. The investors that invested in these properties had dollar signs on their eyeballs – no innocent 20 something looking for a place to live. These were all greedy greedy investors looking to make a quick buck. No sympathy from me (and I am one of them).
“the only they are guilty of is trying to make a buck.”
Unfortunately they were paid primarily to make BUILDINGS, not bucks. . .
Square D, please don’t tell me you are that naiive to think that developers and contractors main interest is in making buildings for the sake of making buildings and providing a service. Obviously it is all for money.
“Unfortunately they were paid primarily to make BUILDINGS, not bucks. . .”
“developers and contractors main interest is in making buildings for the sake of making buildings and providing a service. Obviously it is all for money.”
Invsco’s traditional biz is condo conversions–buying a building from the developer or on the open market and flipping it. The Sterling was designed and construction begun as a straight rental. AI bought it before completion and marketed it as condos. They are (basically) the corporate equivalent of the much-reviled house flipper who makes–at best–cosmetic improvements.
i get those odds from not having my head up my backside.
open your eyes. you think it is coincidence that one developer can leave a string of busted developments all over the country?
another coincidence that they were in deep with Corus and Countrywide?
just some honest developer trying to make a buck in your world, huh?
get a clue.
“They are (basically) the corporate equivalent of the much-reviled house flipper who makes–at best–cosmetic improvements”
uhh – so what’s the problem? I’ll tell you – it’s jealousy. In business, the main goal is to make money. AI did a great job doing just that – why should they be reviled? Seriously. They are no different than car dealership owners, lawyers, stock brokers, real estate agents, real estate brokers, etc. etc. Good Lord, most people on this site would jump at a chance to make money in real estate – exactly what these guys did. The hypocrisy is unbelievable!!!!!!
Clio there was quite a bit of mortgage fraud going on in those buildings. Blind eyes were turned at every point in the chain from the agents to the mortgage lenders to the appraisers to the developer and ultimately to buyers. Stated income and occupancy fraud…. I wonder how many of those 2-2-2 deals were done as primary residences?
“just some honest developer trying to make a buck in your world, huh?”
what about the investors? Are they not to blame? Seriously, these guys were some of the greediest f@ckers around – buying 10-20 units with the expectations that they were going to make a KILLING in a few years. AI just provided a service – the investors are the ones that bought – nobody forced their hand.
Clio,
From Crains,
Eight downtown buildings developed by American Invsco since 2001 account for 57.7% of foreclosure cases on condos owned by original buyers in all 76 downtown condo projects of 175 units or more developed over the same period.
Lenders have filed 232 foreclosure complaints in Cook County Circuit Court against original owners of condos in the American Invsco buildings, compared with 170 suits on units in the other 68 buildings in the comparison group, according to the court clerk’s Web site. Expressed as a percentage of the number of condos developed by American Invsco, the rate of foreclosure cases at the developer’s buildings is 8.0%, far above the 0.9% rate for other downtown projects.
Please explain away this.
“Please explain away this.”
Greedy investors….. AI made is very simple and had great marketing tools. Nobody was forced to buy anything. These stupid investors really had dollar signs for eyeballs and couldn’t think on their own. They are MORE to blame for their current state than anyone.
Clio, you are correct. However, that doesn’t change that there was massive fraud going on. Part of the reason so many specuvestors were even able to get in on the game and lose there shirts was purely by the fraud that was encouraged by many developers/agents/lenders/consumers.
While it is nice to say tough shit, those guys made their bed so now they have to lie in it. The issue is that all those foreclosures affect everyone else who weren’t in it for the money. Even people who don’t have units in Invsco buildings are being negatively affected as those buildings invariably bring down the values of surrounding buildings as well.
“The issue is that all those foreclosures affect everyone else who weren’t in it for the money.”
Very true, Russ – but, as a society, that is the price we pay. The same goes for healthcare – we all are footing the bill for the very ill. The same goes for law enforcement – we are all footing the bill to house criminals in jail, court system, etc. The point is that while it does suck, there is nothing “criminal” about it. If this behavior is deemed criminal, then half of the country needs to be in jail.
in clio’s world, the drug dealer shares no blame.
“in clio’s world, the drug dealer shares no blame”
actually, i DON’T think drug dealers should get all the blame (of course they need to be prosecuted and taken off of the streets) but users are just as much to blame. Come on, we are all adults here – if you don’t have self control, then you really need to pay the consequences.
Clio:
I don’t disagree, but I am more addressing Bob’s point as to why there haven’t been any prosecutions of Invsco. Any neutral observer with even a rudimentary working knowledge of residential real estate can see that there was some shady shenanigans going on with those developments. The foreclosure stats alone bear that out.
Like I said, I would bet a steak dinner if someone were to dig into those 2-2-2 deals that a very large percentage of them at a minimum were occupancy fraud where the buyer claimed the property would be a primary residence. There were “preferred” lenders associated with those developments with “preferred” appraisers along with a sales center. No way no one didn’t know what was going on…
anybody got some time to google up some stuff to show the “great and quality” work AI did?
i can tell a few stories off the cuff but would rather some hard facts paint the picture.
I for one am waiting for the perp walks. The suckers who ended up owning the “assets” were the bottom of the food chain, along with the “investors” who bought the securities based on fraudulant transactions. Here the whole thing is compared to a game of three card monty, with the banks working to unload the risk before the SHTF:
http://boombustblog.com/reggie-middleton/2010/11/05/banks-monolines-and-ratings-agencies-as-the-three-card-monte-wallstreet-hustlers-its-a-suckers-bet-whos-going-to-fall-for-it-in-qe2/#more-3908
“The point is that while it does suck, there is nothing “criminal” about it. If this behavior is deemed criminal, then half of the country needs to be in jail.”
I bet everyone that wants to sell is excited for the obamacare 3.8% tax when you sell your house staring in 2013…
http://www.snopes.com/politics/taxes/realestate.asp
Come on Sonies…
oh good, because when i’m ready to sell its not like i’ll have any “gains” let a lone 500k of gains LOL
Someone mentioned above that there are quality problems here. This is the first I’ve heard of it. Can anyone provide more information?
To my knowledge this was built as a rental and lower-grade finishes are to be expected. But actual construction quality problems?
This building is in a great location, so at some point it is worth buying into.
“To my knowledge this was built as a rental and lower-grade finishes are to be expected. But actual construction quality problems?”
Also my impression. There *was* a facade problem in ’07, for which a special was assessed:
http://cribchatter.com/?p=5022
“http://cribchatter.com/?p=5022”
OMG, those Heitman quotes are like a fine wine. . .
“Square D, please don’t tell me you are that naiive to think that developers main interest is in making buildings. . . . Obviously it is all for money.”
Please don’t tell me you’re so naive as to think that AI put out an acceptable quality of product.
I have no angst toward developers– I’ve made $ in this game and am not ashamed of it (crap, something clio and I have in common. . . ).
My point is they consistenty put out crappy product, and engaged in shady deals, so they should be held accountable for their crappy work.
“My point is they consistenty put out crappy product, and engaged in shady deals, so they should be held accountable for their crappy work.”
They’re a marketing company. They buy a cheap building (*definitionally* not of the best quality), put minimal upgrades into it, market the hell out of it, and make a profit. Criticizing AI for the *quality* of their product is like criticizing Billy Mays for the shoddy quality of some AsSeenOnTV product–Billy was just a pitchman, albeit a great one.
I agree w/ anon – coming down hard on AI and their executives is wrong. One of my best friends was a top exec at AI and let me tell you that in the late 90s/early 2000s his house in Lake Forest was FULL of people dying to get invited to any of his many many many parties. Now, him and his whole family live like outcasts. They even had to move to avoid the children getting harrassed and teased at school. This is not right at all – this is unfair blame. Seriously, blame the system, not the individual.
Bummer this one went under contract, I was actually hoping to see it this weekend. Funny that you did post on it. It does concern me that listings in that building for 2 bed 2 ba are still under 300k. As a first time buyer.. the search continues. Can’t seem to find the right place.
“This is not right at all – this is unfair blame. Seriously, blame the system, not the individual.”
STFU its called karma. And ain’t it a beotch.
Anyways, back to the actual property vs the marketer/ developer. Like Tipster, I’m wondering what other major physical issues are wrong with this building. Facade work was mentioned, but every highrise building in these locations have had facade and tuckpointint work and special assessments. Any other concerns? This seems like a pretty good deal at this price point.
he lives like an outcast bc he worked for invsco or bc he no longer has lots of extra cash to spend on his friends?
“Facade work was mentioned, but every highrise building in these locations have had facade and tuckpointint work and special assessments.”
Less than 8 years after being built? Really?
clio, you are absolutely wrong here. Your AI friend got exactly what he deserved. Blaming the “system” is a copout. You remind me of that juror that single-handedly acquitted Blagojevich because he was part of a corrupt system. If we never hold individuals accountable, our society will turn out like Russia where fraud is just the way things are done.
Has anyone been inside the building? It is really nice, great hallways and really great amenities. It is my understanding that the units on the lower floors were not upgraded as you see in the pictures the typical apartment looking appointments. If you buy a lower floor unit at a low price – you can make it how you like it. On the higher floors, the units are upgraded with granite and stainless steel and hardwood floors. The location is great; close to the Loop and near almost any transportation line in the city.
I was one of the few people that bought into the building to live circa 2002, and moved in during that time frame. I own 07 unit – purchase price $292K – obviously way under water. Till very recently lived in the building (now rent it out) – the structural issues are/were limited to facade repairs. The building actually is in great local and I am representative if a minority who will never sell it – and hope to use it as my down town pad in the future.
I am baffled however by all of the negative stuff around it (outside of AI – which is and will be a negative). True owners like me (if any left) will be in the red on this one probably for a while (if not permanently) but at these levels, given the location, amenities, etc – truly one can do a lot worse than this. Which is why I don’t get why all of the negative rhetoric. True you will not make a killing flipping properties at Sterling – but your downside is pretty limited – IMHO.
I currently live at the sterling and have been to the owners meeting. I am a first time home buyer, and have been very impressed with the sterling compared to other places I saw (Ontario Place, Plaza 440 and some other river north place). The building appears to be improving their financial strength:
-2-3 million dollars in reserves
-met their 2010 revenue budget
-contributed an extra ~50K to their reserves
-43% owner occupied
-assessments have will not go up next year and haven’t for the last year or two
-property taxes were successfully contested and reduced
I am not in real estate so I could be missing something. What trends are you guys seeing in river north? Are prices beginning to bottom out/increase.
“I am not in real estate so I could be missing something. What trends are you guys seeing in river north? Are prices beginning to bottom out/increase.”
Bottom out?
Increase?
No. And No.
Prices are double dipping (or some people are arguing, triple dipping). They continue to slide city wide. Yes- even in River North.
The Sterling is a terrible place to live…
1) A/C not switched on til June 1
2) Pool not opened til memorial day weekend
3) Amenities not maintained well
Owners are skimping on upkeep to save $$ as most rent out their units. It is disgusting.