Best Rental Deal of 2009? NOT! 600 N. Fairbanks in Streeterville
As many of you know, I rarely post about rentals but occasionally I see units that are just so juicy, they must be commented on for those of you who are still, as some commenters put it, “living in your parents basement.”
This 2-bedroom unit, Unit #1605, at 600 N. Fairbanks, the famed Helmut Jahn building in Streeterville, was just reduced to below the price of a 1-bedroom currently listed for rent in the building and well-below the price of any other 2-bedroom.
It has the Wolf, Sub-Zero, and Meile appliances and the Snaidero kitchen cabinets just like all the other units in the building. It also has dark mahogany hardwood floors.
The listing says it has natural stone finishes.
Unit #1605: 2 bedrooms, 2 baths, NW view
- Was listed for rent at $2000 a month (as an monthly “special”)
- Listing has been fixed to reflect it’s still listed at $2995 a month with a reduction on the first month of rent only
- Parking is an additional $225 a month
- Francesca Rose at Prudential Rubloff has the rental listing. See the pictures here.
This unit is directly above Unit #1505 that we chattered about several times and which sold in July. Here is the listing info and a picture for Unit #1505:
Unit #1505: 2 bedrooms, 2 baths, 1253 square feet, (NW view)
- Sold in November 2007 for $584,000 (included the parking)
- Listed in January 2009 for $629,900 (plus $55,000 for parking)
- Reduced
- Listed in April 2009 for $599,000 (plus $55,000 for parking)
- Reduced
- Sold in July 2009 for $585,000 (included the parking)
- Assessments of $482 a month
- Taxes are “new”
Other 2-bedrooms in the building currently available for rent:
- Unit #2305, a 2/2 at $3250 a month (parking included)
- Unit #2705, a 2/2 at $3500 a month (parking included)
Unit #1605 is also priced below this 1-bedroom rental:
- Unit #1704, a 1/1 at $2100 a month (plus $250 for parking)- 873 square feet
Why buy when you can rent in the same building for so much less?
[Editor’s Note Update: The listing has been updated to $2995 a month. It turns out the $2000 a month was just a one month “special” price and then the rental rate would return to the prior asking price- which was $2995. Thanks to those who actually contacted the agent to see if it was too good to be true.]
I couldn’t imagine spending $3200 – $3500 on rent. Who has that kind of income? I’m a Professional Engineer, with 20 years experience, and my take home pay would not allow for that kind of rent (let alone a purchase in this building).
Wow — that is an amazing deal! I’ll bet this gets snatched up quickly — $2225/month for that?
that rent/buy looks like a black hole on this one.
undone raw concrete make me feel like a prision
Anyone feel like somethings up? you know if its too good to be true thing.
is this a flipper getting desperate?
if all is on the up and up i dont see why this wont be rented out by the end of this week
maybe its a unit that is about to be foreclosed and the owner is just looking to get some cash (any cash) in before the bank takes it back.
The tenant will mostlikely loose out on the security deposit but will be likely able to live for free for a few months as the bank goes through the foreclosure, eviction process.
Not you or me.
“danny on October 12th, 2009 at 4:59 am
I couldn’t imagine spending $3200 – $3500 on rent. Who has that kind of income? I’m a Professional Engineer, with 20 years experience, and my take home pay would not allow for that kind of rent (let alone a purchase in this building).”
Think of it like section 8 housing where the government subsidizes a person’s housing. Many many people are providing this subsidy by renting for less than their costs with the objective to minimize losses.
Interesting foreclosure comment. I went to look at a open house for a 3 bedroom unit in Lake Shore East because I was curious to see the views a couple months ago. The unit has a nice notice of foreclosure taped to the door and the realtor informed us a buyer would not be able to get clear title for at least 8 months for various reasons. Very inefficient.
Maybe the owners paid cash for the unit and want a surefire income investment that yields more than a T-bill? Lowballing rent like this is a surefire way to make sure no vacancies.
Amazing deal for a rental, I’d scoop that up if they took dogs and I were looking for a place to live! 🙂
The condo association may have knowledge of a pending foreclosure, but it could be something as simple as just wanting to get it rented sooner than later. Being mid October, I would have and have done the same thing.
“Maybe the owners paid cash for the unit and want a surefire income investment that yields more than a T-bill?”
With a guess at taxes (probably low, for non-o/o), and assuming $584k, just like 1505, it’s a little shy of 2.6% return. Include *any* maintenance or vacancy and you’re below the 5-year yield.
Not how I’d “invest” $600k, but then I don’t have $600k of play money.
A non-o/o unit pays less than a o/o unit? i would think that the unit wouldnt have the homeowner excemption and therefore make the taxes more costly. am i wrong here?
Maybe they just don’t want to lose money if they were to put it on the market for sale. Some money is better than no money for rent. Plus, it is on a low floor so it is harder to ask for such a high rent. Overall, there are not a lot of unit for sale in the building.
Not sure why this is considered a ‘deal’. I was paying $2400/mth to live at 130 N. Garland (The Heritage building @ Michigan and Randolph) for a 2/2 facing north on the 22nd floor. Included 2 parking spots. Oh but it didn’t have a fancy refrigerator to keep my beer cold.
“A non-o/o unit pays less than a o/o unit?”
No, my guess at taxes was probably low for a non-o/o unit. Probably pretty good guess for an o/o, too low for non-o/o.
Tried to do a bit of “anon (tfo)” internet sleuthing on this place.
No lis pendis filled, two mechanics liens both released soon after. only one mortgage for 400,000 the even amount for the mortgage suggests a HELOC?
the owner seems to be a manager at a printing company? he/she must have family money?
this internet sleuthing is to confusing i am going back to leaving it to the pro’s here
BTW-no home owners exemption filed
If it sounds to good to be true. IT IS.
I emailed the agent.
The $2000 rate is for the month of October only. It’s a special rate. It then reverts to $2995 a month for the rest of the length of the lease.
That is WAY bait and switch. Ridiculous.
That is shady…but it makes the phone ring. I am sure some sucker who calls will fall for it though.
“I emailed the agent and here is the response I received:”
This is why I get a chuckle when I review the NAR stats on the number of realtors and realize what a quickly shrinking profession it is. Theres a lot of chaff out there and I think Chicago could always use a few good bartenders.
Hmmm..at least the realtor actually fixed the listing sheet. Sabrina’s link now shows $2995 a month, with a $2000 October special.
The CribChatter effect maybe?
Something tells me that next year there will be an abundance of rentals that are this nice and really are this cheap. This realtor is performing an obvious bait and switch (why do truth in advertising laws not apply to real estate?) but once the place sits empty a little while longer the owner will capitulate. Just like home prices earlier in the bubble burst, rents have nowhere to go but down due to increasing supply and decreasing/constant demand.
FTC’s guide to bait & switching:
http://www.ftc.gov/bcp/guides/baitads-gd.htm
Wow that realtor should be ashamed of themselves
There is no way this is in foreclosure, it was just purchased in July! Looks like someone made a large downpayment and will be able to cashflow this for a profit. Not a great return, but I could see doing this if you planned on moving into the unit in a few years (empty nesters?) and you want to buy when prices are low. They probably figure that they can get the mortgage paid for a few years and will have locked in a good price. BTW, this building is right next to Northwestern Hospital, so I bet there is a pretty good rental market for doctors. The two Streeter buildings next door are 100% rental, so the $3000 plus rental market must somehow exist.
This doesn’t do a break-even cashflow at $2995. A 30 year, 400,000 mortgate at 5.25% (hypothetical) is a little over $2200/month. Add in property taxes and assessments and the monthly nut is north of $3000.
“and you want to buy when prices are low.”
BWAHAHAHAHAHAHAHA!…..hahahahahahaha thanks for the laugh.
Good points on the potential rental market though.
netdsgnr,
i really think the $400,000 is a HELOC, cause of the even number. Who knows how much the person has taken out it could only be like 50k on that 400k.
“i really think the $400,000 is a HELOC
Good point but, if true, I don’t understand why anyone would do it! If you have a half million in cash and think that there is a fairly good possibility that you may need all or part of it for other purposes, why put the money into a depreciating illiquid fixed asset??? All this does is let a bank/mortgage company bleed you for interest when you need the cash. Then, when you have used enough of the HELOC, you are also losing money on the rental.
Streetervillian,
This unit did not close in July. I think you misread the post.
“I don’t understand why anyone would do it!”
netdsgnr,
my friend, after reading cribchatter i dont understand anything anymore. at least one listing posted here each day makes me bang my head on my desk
I think even the worst negotiator should get at least one full month’s rent off any rental place in this city.
There was no sale of #1605 this year. The property was put into a trust in 2009, which is probably the source of confusion. Also, the liens recorded are for the entire building – which is not uncommon for new construction.
7/14/07 #1605 closed for $541,000 without parking from developer
7/14/07 $400,000 mortgage with ING
5/20/08 parking #416 closed for $58,000 no mortgage
5/27/08 #1605 leased for $3030 with parking
Here are the 05 tier rentals from the MLS:
2305 4/1/2008 $3,300
3505 4/25/2008 $3,800
3205 5/14/2008 $3,800
1605 5/27/2008 $3,030
2705 6/9/2008 $3,400
2805 7/30/2008 $3,200
2305 8/18/2008 $3,350
1905 11/10/2008 $3,200
2905 12/15/2008 $3,250
2905 5/10/2009 $3,500
1905 6/2/2009 $3,400
2405 8/5/2009 $3,400
9 of the 23 (39%) 05-tier units have been rented through the mls to date. That’s an awful lot of underperforming, illiquid assets. Or, is it more correct to just call them liabilities now that prices are dipping below pre-con levels?
the MLS has the correct pricing/details listed as well. who knows when that was updated though.
Someone should have forwarded the original ad to the office of banks and real estate.
The MLS was updated after the Cribchatter Post came out
David, it says:
“Sold in July 2009 for $585,000 (included the parking)”
Am I missing something?
Streetervillian,
Do you not know how to read? That was 1505 not 1605.
Sabrina,
Your editor’s note is incorrect. The price listed on the MLS is
$2,995
David — read the thread. It was changed to $2995 after Sabrina posted this story. When she first posted this, it was listed at the $2000 “teaser” rate.
Michael,
Read the editor’s note. It is incorrect.
[Editor’s Note Update: The listing has been updated to $2900 a month. It turns out the $2000 a month was just a one month “special” price and then the rental rate would return to the prior asking price- which was $2900. Thanks to those who actually contacted the agent to see if it was too good to be true.]
I have corrected the amount in the editor’s note- thanks.
I also changed the listing in the post to make it clear that the $2000 was just a teaser rate, of sorts.
Who knew a post on a rental would be this much of a problem? ha!
I heard another 2-bedroom just sold, can anyone tell if that’s true?
yesterday visited a friend in that building – it is awesome in there – top of the line everything and i heard from a realtor friend of mine that units at 600 lease or sell faster than any other building in chicago – lucky tenants
just heard another unit sold for a hefty appreciation – wish i would have bought when it was a hole in the ground
Anyone have any data?
According to the MLS, the last unit to close was on 9/24/2009
Unit 3001 closed for 865K
The last 2/2 to close was 1805-9/4/09
closed for 625K
1605 rented for 3100/month including parking after 100 days on the market
Great, thanks. It looks like the summer sales season is officially over. I’ve been thinking of buying in this building. I wonder if I could get a better deal over the winter?
#3001/p1115 closed 2/12/08 $950,500
#3001/p1115 closed 9/22/09 $865,000
#1805/p821 closed 11/13/07 $672,000
#1805/p821 closed 9/1/09 $625,000
Streetervillian, the declines show no sign of abating. There are still scores of stuck flippers here losing more money every month. The declines will continue beyond the winter.
“i heard from a realtor friend of mine that units at 600 lease or sell faster than any other building in chicago”
Julie, your friend is either a liar or a moron.
“just heard another unit sold for a hefty appreciation – wish i would have bought when it was a hole in the ground”
in the market, did you hear that from Julie’s friend? I’ll grant your wish anyway: units are now selling for no more than “when it was a hole in the ground.” Your welcome.
Streetervillian,
2705 is somewhat reasonably priced at 579K plus parking.
It’s been on the market 258 days.
I have no insight and have never seen the unit but it is a higher floor and within lines with the 2/2 pricing
Thanks for the info. It looks like the building is back to pre-con pricing. I’ve been watching it for awhile and I’m not sure if it’s bottomed or not. Prices seem to have softened but not nearly as much as most other buildings. Part of me thinks that since it’s done so much better than other buildings it may be as good a time to buy as ever (I plan on owning for the foreseeable future). Hard to say…
I may check out 2705, that looks like it’s going for the same price as 1805, which seems odd. I wonder if the 27th floor is high enough to see the water?
1805 was highly upgraded
Finish selection is very different between units. Go see and report back!
I check out 2705, it has a decent view of the water. You can tell the units above it must have great views, but 2705 is still pretty good. The finishes between units are significant. This unit’s finishes are awful, so I’m not as surprised that it hasn’t moved. Who picks white cabinets and tan marble? It was furnished like crap, too, so that didn’t help. It’s annoying because I like the 05 tier but there aren’t many available with a good view and good finishes!
I also looked at a one-bedroom, 3503, just for comparison sake. The finishes were much better, gray cabinets and dark granite. It also had a really nice bathroom. I wish the larger unit had these finishes!