Don’t Buy the Penthouse- Rent it: 1936 N. Clark
We don’t chatter about many rentals (unless it’s flippers trying to rent out their investment units) but there’s something about this living room in the penthouse of 1936 N. Clark in Lincoln Park that caught my eye.
Here’s the listing:
SPECTACULAR VINTAGE 4BR/3BA PENTHOUSE WITH STUNNING PANORAMIC VIEWS OF THE SKYLINE AND THE LAKE. LOCATED DIRECTLY ACROSS THE STREET FROM LINCOLN PARK.
JUST REMODELED EVERYTHING IS BRAND NEW! GOURMET KITCHEN WITH GRANITE, S/S APPLS & WINE BAR. HDWD FLRS, MASTER BA SPA, 3 WBFP’S, FABULOUS 1400 SQFT, ROOF TOP DECK, PERFECT FOR ENTERTAINING 1 PKG SPOT INCL, ADDL SPOTS AVAIL FOR A FEE. MOVE IN TODAY!
Penthouse: 4 bedrooms, 3 baths, 1 car parking, no square footage listed
- I couldn’t find an original sales price- anyone else want to try?
- Currently available to rent for $7500 a month (parking included)
- Central air
- Jameson has the listing (see more pictures here.)
To my eye, this looks like an apartment building, as opposed to a pile of condos.
Two PINs, always sold together. No price recorded on any deeds back to the 1980s. Lots of lis pendens and liens, but no foreclosures. New mortgage every few years, but I didn’t check the principal amount on any of them.
Nice, but not that many people are in the market for a rental at that price. If they want to go that large, it’s usually for a SFR. I wonder if the owners HELOCed themselves into penury.
a friend’s girlfriend lived there in 96 (not that unit). it was an apt building then
It’s been 20+ years sine I’ve been in the penthouse at 1936, but here’s what I recall.
It is, in effect, a single-family home in the sky, a pretty special place, and probably worth the rent.
The building back then stood on leased land. That would account for the two PINs – one for the land, one for the building. The leasehold was at least one reason the building didn’t convert to condos – the Illinois Condo Act requires ownership of the property in fee simple, unlike Hawaii which allows condos on leased land.
This is an apartment building. Most of the apts are ordinary, though somewhat attractive.
But this penthouse is a real burner, absolutely gorgeous. This is just the type of dwelling I’ve always dreamed of living in. Look at that lovely staircase and gallery. How I wish I could strip those ceiling beams and restore them to their original finish.
What WOULD this penthouse sell for, in Lincoln Park, were it a condo instead of a rental, I wonder? Can anyone guess?
“What WOULD this penthouse sell for, in Lincoln Park, were it a condo instead of a rental, I wonder? Can anyone guess?”
$7500/mo would cover about $1.5M (at a rent multiplier of 200).
Glancing at the MLS, 1914 N Clark is a 4BR 4.1BA SFH just down the block listed for $2.5M.
My guess — as a condo it would sell easily at $1.5M, and should be able to eke out $2M. I think that the SFH is more valuable than the view, so $2.5M is probably a bit too high.
If you like units like this, check out some of the two-level units in Jackson Towers in Hyde Park overlooking the museum and Jackson Park.
Kevin(first),
Why did you choose a rent multiplier of 200? Your analyses are always thorough (and appreciated,) so I wonder what you did to arrive at this number?
The biggest problem with this unit (lovely as it is) is the building its in. 1936 is a cheap, vintage rental property full of teeny tiny studios and one-beds. There are no real amenities other than the building-sponsored weekly beer and pizza parties in the lobby to keep the student residents entertained. (This was sold as a “plus” by the onsite agent to my client a year or so back and, to be fair, I don’t know if they still do this or not as I’ve only shown the building once in the last year.
The elevators are small and nasty, the halls are cramped and dark. No laundry in unit in this one, right? That means a trip down to the basement level laundry room with the co-eds. If I’ve got $8k to blow on rent, that’s *exactly* the atmosphere I’m looking for!
G — the 200 was really just an easy number to use. The GRM (gross rent multiplier) numbers I’m used to are about 120-140 for investors and 160-180 for owner-occupants. See, for example, http://www.irvinehousingblog.com/blog/comments/rent-versus-own/
Basically, at about 2% for taxes and insurance, 1.5% for maintenance, and 6.5% for mortgage interest (and downpayment opportunity cost), the annual cost of owning is about 10% of the purchase price. That makes the monthly cost about 0.8% of the price. Inverting that, the purchase price is about 120x the monthly cost.
Owner-occupants can get a tax deduction, which effectively reduces the taxes and interest — to say 7% per year total. That is about 0.6% of the price per month, or a price of about 170x the monthly cost.
If you believe that owning is better than renting (e.g., better inflation protection), you might be willing to pay a premium, pushing the multiplier closer to 200x.
Basically, it is yet another take on the rent-vs-own decision. If I am currently paying $3000/mo rent, I will roughly break even if I buy a place at $540K (180x).
Thanks.
You might use a higher GRM multiplier for a place like this because it IS really and truly exceptional.
This is a really glamorous housing type.You just don’t get more glam than a 20s vintage penthouse. It makes the typical timber loft that is so trendy now, look like a pig barn in Indiana compared.
There are, what, perhaps 50 vintage penthouses in the entire city, if even. I can almost list them all. A couple of real beaties atop a beautiful old highrise on Commonwealth in Lakeview. Surprisingly, about a dozen in Edgewater. A large number in the Gold Coast and Streeterville.
And yeah, those penthouses at Jackson Towers are incredible.