Flipper Alert: MoMo Starts Closings; Rentals Appear
Momo, the Smithfield development on the corner of State and Randolph in the Loop across from the old flagship Marshall Fields, is set to begin closings any day now. The first flips and rentals are starting to appear.
My question on the rentals is: will investors be able to get higher rents in that location? None of the one bedroom units had parking available for purchase so every renter will have to pay to rent nearby.
There is one listing for a rental on Craigslist that says move-in is available on February 1st. (The pictures below are of the model unit, I believe.)
It doesn’t list the square footage, but they are asking $1795.
The developer is still trying to sell some units in the building. There appear to be four one bedroom units left which range as follows (from cheapest to the most expensive):
- 860 square feet for $299,900 on the 14th floor
- 925 square feet for $359,000 on the 31st floor
Those prices are without parking.
There is a two bedroom, two bath unit with 1348 square feet for $460,900 on the 29th floor. The listing says “rental parking available.”
[By the way- if anyone knows the “real” address of this building, please let me know. The developer has it listed as 151 N. State, which is the address of the Loehmann’s. Won’t the actual address be on Randolph Street?]
Have they go far enough beyond original estimated closing that some of the potential purchasers can get out of their contracts? The structure of MoMo was done a year ago and they had huge problems and delays with the glass. Anyone know?
I have purchased a two bedroom and was suppose to close September 1, 2007. They notified me that I would closing feb-march. I am on the 22nd floor where the construction elevatore is, and doubt that we will close before April-May.
Yes I think I can get out of my contract.
Using the rent multiplier, or 160x $1785, we come up with $287K for a one-bed as the maximum price at which the place makes sense.
Is $1795 a reasonable rental for this? It looks reasonable to me, but I live further north, and don’t keep track of downtown rentals.
I think the expectation is that, particularly for the 1 bedrooms (occupied either by a 1-person household, or only part-time), renters and owners alike simply wouldn’t own a car in that location. Most transport needs would easily be met by taxi/transit/rental. If you had a lifestyle/situation where you needed to drive often, you wouldn’t look to live at that location in the first place. Just 2 tangentially-related cents.
Laura,
I haven’t been tracking one bedroom rents downtown but new 2BR condos can be easily had at $1800-2000 a month, with more and more at the low end everyday. I think $1500/mo max is more likely for a 1BR like this right now. The current oversupply (and growing!) will put additional downward pressure on rents.
I think your 160x rent multiplier is much too risky in this market. Multipliers will have to drop lower to entice investors, as opposed to speculators (which are nearly extinct anyways.) Something more like 100-120x max. Yes, that does mean these smallish 1BRs will be under $200K before any recovery.
Any speculator who would buy at 160x will lose money compared to just waiting. There is no risk of being priced out at this time.
I’d say that somewhere between $1500 and $1600 is a fair rental price, depending on size of course. I noticed the ad says the fitness center is one floor down from the unit, leading me to believe that this is probably on the lowest residential floor in the building. Anyway, the lack of parking is not an issue. A car is more hassle than it’s worth in the Loop, the building itself is next door to a public parking garage that almost certainly has a monthly rate, and the public transportation is excellent.
151 N. Michigan (the old Doral Plaza) rents are $1495-$1595 for a 730 sq.ft 1 bedroom unit. MoMo 1 bedrooms are 925 sq.ft. plus a large balcony (6ft x 11ft). $1795 seem like a fare rent.
Valasko: How does the parking work with the 2 bedroom units? Is it actually in the building or is it deeded in a nearby garage? Just wondering because they didn’t sell any parking with the 1 bedroom units.
There is limited parking in the building basement. Only parking was available for purchase with a two bedroom unit. One other thing, the building was sold out about 1 month after construction started, so I believe the units available for sale now are people that walked away from there contacts.