Flipper Alert: 340 on the Park for Sale…Again
I don’t know how many units have actually now closed at 340 on the Park. But it seems to be not even half of the building. There are 67 floors and units on the 40th floors are scheduled to close in December. Units on the 28th floor are currently on the MLS however.
So with maybe 30 floors closed so far, there are currently 49 units either for sale or for rent.
There are 344 units in the building. Could it be possible that we will see about half of the building either for sale…again…or for rent?
Seems likely to me.
Originally, Related, the developer on the project, had a clause in the contract which prohibited buyers from selling within a year of closing but according to people who have already closed, posting on the 340 on the Park owners forum, Related is waiving that clause. So flipping is pretty heated at the moment.
And people thought investors weren’t a large percentage of buyers in the Chicago market.
Tsk, tsk.
Question is: will they be able to re-sell them? The upper bracket, as I’ve reported, is slowing rapidly. And with the flippers trying to make $150,000 to $200,000 per unit, could it be that the flippers are going to price themselves out of any chance of selling?
From my rough count, there are twelve 1 bedroom condos being flipped ranging in price from $499,000 to $689,000 (without the parking.) They are around 1000 to 1300 square feet. The cheaper units look north (into the Lakeshore East park). The more expensive have the south view. Some of them have corner windows that look directly into the Blue Cross Blue Shield building.
Already, on the 340 on the Park owners forum, there is discussion about the lights and computers being left on all night in the Blue Cross Building (which is literally right next door.) I wonder how many buyers really gave serious thought to what it would be like to live right next to an office building (either day or night.) 340 on the Park has floor to ceiling windows and the Blue Cross building has a lot of glass as well. So much for privacy. Here is a picture of one of the one bedroom units and you can see that it looks directly into the office building. It is Unit #406. It’s listed for $620,000 and has both the livingroom and the bedroom looking directly into the office building.
In addition, Blue Cross has already announced and started construction on plans to add another couple dozen stories onto the top of their existing building (which was in the original plan for the building and has city approval.) Many units that are higher up in the building will soon have any western views blocked (and have to watch construction workers for a few years.)
My point being: how many of these very expensive units will be successfully flipped at these prices?
The south units have great views, but at what price in a slowing housing market?
On the owners forum, posters are claiming that two or three units have been successfully flipped already (for profits of $200,000 to $300,000). But I’m thinking those were a few of the units listed first- when the buzz for the building was still great and it seemed that the building was, for all intents and purposes, sold out. Currently, I see that one of the one bedroom units with a large 300 square foot terrace on the second floor priced at $644,000 is under contract.
Now, with dozens of units available in some form (either for rent or for sale- some are likely both)- what is the urgency? There isn’t any.
It will be interesting to see what happens in the next six months. It’s likely that prices will come down.
True many units at 340 on the Park are being resold, but to make the assumption that the sellers are all “flippers” is erroneous.
Many of those who purchased in 340 on the Park did so in 2004. A lot can change in nearly 4 years for some buyers. Units being sold are a mix of owners cashing in on the tremendous value they have gained in this extraordinary building and others are simply closing and re-selling to meet their changed circumstances.
Many units have been resold at a substantial profit. Once a unit sells, that price is what determines the market value for similar units – period. With all the competition for buyers in the current real estate market, the best properties still do well. 340 on the Park is a tremendous property and that is why there is so much activity in the building – people are paying for quality and location.
The Regatta, another New Eastside building completed this year, had tremendous turnover in the early phases, as did Lancaster, and almost a year later – there are still dozens of units being resold in Regatta and Lancaster. Things will settle down soon after the last of the units closes at 340.
We bought here, and we are staying in spite of the potential for realizing the capital gains. 340 on the Park is one of the most beautifully designed and extraordinarily built luxury residences in Chicago. The amenities and LEED certification only add to the buildings appeal.
Sure, there are a lot of units being re-listed, but make no mistake, those units are being sold as well. The market determines value, and 340 on the Park commands a genuine premium.
The Spire pricing may raise the bar even higher for the New Eastside. Those buying now in 340 may have a very good investment on their hands.
Patrick:
It’s funny that you say that many have sold (as re-sales) because I had a tipster write me that not a single unit has sold again (that is showing up in the available data.) Several units are under contract, but NONE have closed.
So we don’t know what prices- if any- any of these sellers will get. Because in this bad housing market- hardly anything is selling.
And yes, I agree with you, that circumstances sometimes do change and people cannot move into their new condo so they have to sell. But, again, according to a tipster who sent me the data, about 70 units have now closed (at least according to the data submitted by the developer) and 40% are on the market either to sell or to rent.
Does that sound normal to you?
Of course it’s not.
Investors have bought up hundreds of units in the new construction buildings- not just in Lakeshore East. Already, we are seeing the flips in 600 N. Fairbanks, Avenue East, the St. Clair and soon will see them in 600 N. Lake Shore Drive.
The flipping game is coming to an end now as the housing market cools. Who will be left holding the bag?
I personally think 340 on the Park is a very nice building. But at these “new” prices?
We’ll see over the next several months.
A clarification and comment. As of a week ago, there were 2 resale units in 340otp that closed and 2 resale units that were pending. The closed units had sales prices that were substantially higher than their original offering from the developer.
I would expect many more units in the building to be offered for resale in the coming months. This is typical of new construction, especially given the length of time that has passed since reservations began. A continued slew of rentals would be more worrisome. On the positive side, the location, unit sizes, amenities, and reasonable assessments give 340 a competitive advantage over almost all other buildings. These advantages may increase with time as the housing market stabilizes.
Tom:
Which two units sold? I will have a post on this tomorrow- but all I see are two that are pending. In the numbers I have seen- there haven’t yet been any units that have been flipped (i.e.- that have actually closed.)
What is it about this building that makes it so unique? Being built at the other end of the park (with the same views) is another mega high rise with units that are just as nice (if not nicer) in One Museum Park.
And you can’t say the assessments are “reasonable” as its new construction and the assessments haven’t been set by the new board yet.
I guess you would say I’m more concerned about the prices on the building. They are priced at a higher per square foot price than some units in other luxury buildings, like 55 E. Erie, that are considered more prestigious.
I actually like this building. I think it’s a nice location and has great views (to the south only.) I think it was great at the original prices. But at the flipper prices, I think it is WAY overpriced.
But the market will tell all.
Reply to Sabrina’s question – WHAT IS IT ABOUT THIS BUILDING THAT MAKES IT SO UNIQUE?It has beautiful multifaceted water scapes grant park. Millenium park, Michigan Ave., the skyline and sunrises and sunsets. It is one of the best views I have ever seen anywhere around the world!!!!!!!!! Besides a beautiful new building in a great location for the arts, relaxing recreation. more energetic sports or hobbies, festivals and fairs and a walk or easy commute to work; it is in a new little neighborhood in the city . Day or night the ever changing collage of life in the city is even better than I imagined when we picked this building. you can see the bean, then soldier field, then watch all the boats and even the colors on buckingham fountain, the
Carol: I have no doubt that it has beautiful views. I’ve been in the building and it does. But so does 400 e randolph right next door for about 50% of the price. (yes- an older building but the views are the same for every building that is right there whether or not it is old or new.)
And, like I said, One Museum Park at the other end of the park will have similar spectacular views as well.