From Co-Op to Condos For This Vintage Kenwood Highrise: 5000 S. East End
We have often chattered about the differences between co-ops and condos but after decades as a co-op building, 5000 S. East End in Kenwood has decided to become condos.
From Crain’s in January 2011:
“The cooperative that owns a 28-story vintage apartment tower in Kenwood borrowed $3 million from Harris Bank as part of a plan to convert the building into condominiums. Built in the late 1920s, the 98-unit high-rise at 5000 S. East End Ave. was the tallest building on Chicago’s South Side until the mid-1960s and may be best known as the former home of mayoral candidate and former U.S. Sen. Carol Moseley Braun. The co-op, Five Thousand East End Avenue Building Corp., will use proceeds from the Harris loan to pay off existing debt, which includes a $2-million mortgage with NCB, a Washington, D.C.-based bank that specializes in lending to co-ops, property records show. A call to the building’s management office was not returned.”
But, apparently, all has not been smooth sailing for the conversion. In May 2011, CBS and Crain’s reported on a lawsuit brought by 10 homeowners to stop the condo conversion because of the massive special assessment that they would have to pay to pay off the co-op debt. See the CBS coverage here.
I’ve heard the special was anywhere from $70,000 to $120,000 per unit.
Does anyone know the status of the lawsuit?
The current listings seem to indicate that the conversion has already occurred.
The listing for this 3-bedroom unit, currently the most expensive unit on the market in the building, says that it has been converted.
The assessments also reflect the new condo assessments.
This 3-bedroom has recently been renovated.
The kitchen now has granite counter tops and stainless steel appliances.
It also has the amenities many buyers are looking for with central air (space-pac?), in-unit washer/dryer and parking.
The unit has a formal foyer and a separate dining room, features which were common in the 1920s high rises.
With an asking price under $290,000, and keeping in mind that the special assessment had to be paid, is this a deal for the space?
Anthony Rouches at @Properties has the listing. See more pictures here.
Unit #12A: 3 bedrooms, 3 baths, 1800 square feet
- Sold in January 2011 for $89,000
- Originally listed in May 2011 for $319,900
- Reduced
- Currently listed at $289,900
- Assessments of $1449 a month (includes heat, parking, doorman)
- Taxes are “new”
- Central Air- seems to be space pac
- Washer/Dryer in the unit
- Parking included
- Bedroom #1: 14×17
- Bedroom #2: 14×16
- Bedroom #3: 9×11
- Dining room: 13×21
$161.06 psf? way underpriced. They should take it off the market and relist it again next year as the market improves.
what a nice place but those assessments hurt and then there is the mess with the conversion…alas
condo or co-op = too many people all up in your shit
Sorry to go off-topic… A few days ago, HD mentioned driving around the north shore burbs and seeing lots of homes for sale, including many deals.
I just found 2 listings for SFHs in the north burbs that are blowing my mind. Both are in Lake county and are very close to the lake and Metra. I can only think that the low price in the listing is to spur a bidding war or something. I don’t even want to give any links here. I think I’ve been bitten by the RE bug.
Like I said, it seemed like every third or fourth home on the north shore was up for sale or vacant. It would make sense too, a lot of those homes are old, need work, the taxes are high, the mortgage payment required is even higher. Bonuses, raises, stock market gains (as of late) have been flat, seniors on fixed incomes are getting zirp. Those homes should be expensive, yes, but it makes sense that they’ve become much cheaper this bust that other neighborhoods. There were deals on the north shore as far back as 08 and 09 and the deals are only getting better.
but now that the bust is over folks, prices have nowhere left to go but up. Where’s clio? I’m on your side now.
Beautiful unit. The assessment seems high since it does not include a workout room, TV and electric. If the assessment could go below 1000K, it would make this unit attractive. Have the assessments always been this high? Is it the facade or the conversion that is so costly?
“I just found 2 listings for SFHs in the north burbs that are blowing my mind. Both are in Lake county and are very close to the lake and Metra. I can only think that the low price in the listing is to spur a bidding war or something. I don’t even want to give any links here. I think I’ve been bitten by the RE bug.”
Are these properties in Highland Park?
I don’t think this is an extraordinarly beautiful unit. Hyde Park has some gorgeous vintage units and this isn’t one of them. But I would stroll the streets of Iraq singing about Jesus before I’d walk into this co-op condo conversion. No sirree bob.
very low assessments, too…
“I’ve heard the special was anywhere from $70,000 to $120,000 per unit.”
There are some *exceptionally* large units in this building, but I know nothing about the smallest. Is the ration really less than 2:1, or is that the “typical” range, excluding the largest units?
“Are these properties in Highland Park?”
one is
danny(lower case D)
Any chance you’re referring to this house in Fort Sheridan, walking distance to two Metra stops and one block from Openlands Preserve on Lake Michigan?
http://www.redfin.com/IL/Highwood/740-Deroo-Loop-60040/home/17614859
Well if it’s the property in Highland Park that I’m thinking of I’ll mention that I went to check it out this weekend, since I was rather surpried by the list price. Turned out the house needed a lot of work and the neighborhood was not what I expected, despite close to proximity to the lake and Metra.
Chris M,
What street was the property on?
“Turned out the house needed a lot of work and the neighborhood was not what I expected, despite close to proximity to the lake and Metra.”
Highwood Metra, right?
I’m sure we’re talking about the same place. The listing only shows exterior pictures, so I guess I know why.
The address is 2765 Roslyn, Highland Park 70035
MLS: 07838025
Now the other one I’m keeping close to the vest.
This is the one I was referring to: http://www.redfin.com/IL/Highland-Park/2684-Logan-St-60035/home/17630421
An estate sale property on a 15,000 square foot lot for $240k. And, yeah, near the Highwood Metra, although technically still in Highland Park.
Chirs. I saw that one too. The pictures look nice enough, but I guess the place needs work. I think the neighborhood is decent enough. I’ve lived in the City, so a little bit of sketch is acceptable.
Chris that place is adorable!
danny: Buying right now isn’t a bad thing if you know you’re going to live there for a looooong time. Will you live in the house, and enjoy it, for at least the next 10 years?
Then why not buy right now? The rates are low and there are some good deals.
I’m much more bullish on people buying the single family homes than those who buy the condos and say, “of course we’ll be there for a long time” and then 3 years from now the unit will again be on Crib Chatter.
Sabrina – Do you think rising property taxes should be a concern to people looking to buy a SFH in Illinois, even with a long term horizon?
Sure- but that is true of anywhere you go. You don’t think they’re going to raise taxes in just about every other state (that also has budget problems?)
Are you just going to rent for the next 10 years because you might have to pay more? Or are you suggesting that rising property taxes will force down home prices even more? (which could be the case- I don’t know.)
I’m with Clio in the camp that once you have a few kids, you really don’t want to be renting a house for 5 or 10 years- if you can afford the mortgage. So you WILL buy. As I’ve said- I support people buying within their budgets as long as they assume that they’re going to be there at least 10 years. There ARE deals.
The old view that “hey- we’ll live in this 2-bedroom Wrigleyville condo until we have kids” should be phasing out now. Although I’m always surprised when I see the cookie-cutter 2-bedrooms selling in the $300,000s STILL.
If you’re single or married and without kids and want to wait to see if prices come down further- great. It’s not a bad strategy. But not everyone wants to wait another few years.
But Chris, I agree with you on the property tax issue. It’s supposed to go up dramatically in 2015 in Chicago right? (I don’t remember the exact year- was it 2014 or 2015?) So if your $5000 tax bill is now $8000 or $10,000 – that’s a huge difference in the budget for most families.
According to Clio, all the landlords will raise rents to cover that increase anyway- so does it help you to be renting?
This is the one I was referring to: http://www.redfin.com/IL/Highland-Park/2684-Logan-St-60035/home/17630421
An estate sale property on a 15,000 square foot lot for $240k. And, yeah, near the Highwood Metra, although technically still in Highland Park.
Chris M, this HP property you reference on Logan is overpriced. There is a lot of work that needs to be done there. Almost no electricity (one outlet per room), property taxes sold, nicotine walls, original kitchen and bath, 1/2 bath in hallway, leaky basement, and it backs up to a commercial strip. Check out the wreck across the street for $150K. I haven’t seen this one for $150K and there are no interior photos, but it does have character.
How the heck did we go from Hyde Park to the North Shore in less time than it usually takes to “hijack” a thread?
Is the South Side of Chicago – even Hyde Park – really such “foreign” territory to CC?
For myself, if I could afford it I’d love to live in one of the several classic buildings in this “cluster” just north of 51st and the lake.
You’re close enough to the Drive to downtown, local shopping etc. without the traffic and noise of the equivalent area on the North Side (I’m thinking of 3200-4000 LSD).
I would be very careful about buying in this lovely vintage building. If my memory is correct, this building had sky high assessments and extremely low prices not too long ago. Almost giving the units away prices….not sure how this has changed with a condo arrangement.
sabrina and i have been talking about the deals in Highland park since last summer maybe before that, do a crib chatter search and you can find them.
the real question is why are prices so good, why does there look to be a mass exit stage right, and long term is with prices this low who will be your neighbor
“But Chris, I agree with you on the property tax issue. It’s supposed to go up dramatically in 2015 in Chicago right? (I don’t remember the exact year- was it 2014 or 2015?) So if your $5000 tax bill is now $8000 or $10,000 – that’s a huge difference in the budget for most families. According to Clio, all the landlords will raise rents to cover that increase anyway- so does it help you to be renting?”
Well, rents didn’t go up with prices so I don’t see why they will go up with taxes either (I’m not sure if quoting Clio was a sincere point or not). And, yes, I’m saying that rising property taxes, just like rising prices, could have a big impact on prices, perhaps more so that rising interest rates. Both can impact affordability and that will bring down prices. I mean, look at Oak Park, where you can get a fantastic home for a very reasonable price…but then you find out the taxes are $10k+/year. It’s clear that prices in Oak Park would be higher if the taxes were lower.
It’s funny, as HD (allegedly) becomes a housing bull I become a housing bear.
Correction: just like rising interest rates
“If my memory is correct, this building had sky high assessments and extremely low prices not too long ago.”
Assessments have gone DOWN with the condo conversion (because they bought out the co-op at the price of $75k to $120k per unit.) So instead of $2200 a month assessments (or whatever it was)- it is now $1400.
But the buyer also has to pay taxes separately now.
This is nowhere near being the most beautiful vintage apt I ever saw, or lived in. Actually, it’s a little bland compared to other apts of the same vintage.
The assessments are outrageous.
The lower condo assessments vs higher co-op assessments will be offset by high taxes. Note that it’s being taxed as a “new” dwelling, which is some kind of a joke since the place still has the same outdated mechanical elements it had before the conversion, which was tremendously costly to the coop owners.
It looks like the conversion to condo was a very bad trade for both existing owners and prospective buyers and did nothing to improve the livability, functionality, or value for prospective buyers.
Laura, that “new” just means that no taxes have been billed off the new unit assessments, or the unit assessments are still unknown (I didn’t check which.) It has nothing to do with bldg age or condition.
The benefit of the conversion is the greater ease of condo unit financing compared to co-ops. Also, it’s an option besides apartment conversion once unit prices near zero due to high co-op fees. I’ve seen it work when the co-op has little debt, but for an over-leveraged co-op corp it starts to look like another example of extend and pretend.
This is an interesting strategy. If this is successful, more coop to condo conversions will follow. Current owners are taking a risk that their special assessment ($75K-$110K??) and conversion to a condo will increase the value of their unit. What happens when a condo building has units that approach zero?
After watching what has happened to so many new condo conversions in every price range, I’m at last beginning to like co-ops, because the board can financially qualify prospective buyers, which in a condo you cannot. I mean, you’re stuck with your foreclosed neighbor’s assessment arrears, and his bad mortgage will drag down not only his unit but yours, too.
Given that many condo buildings have been “blacklisted” by lenders because of the weight of foreclosures and unpaid assessments and liens, I can’t see how it’s that much more difficult to finance a co-op for a QUALIFIED buyer. After all, the whole lending market is reverting to 20% down, at least, which erases the only financing advantage condos ever really had.
Mind you, co-ops haven’t entirely escaped the bloodbath of the past few years, but they are considerably better off than most condo buildings.
I feel these co-op owners made a large mistake in converting to condo, and that the new prices in tandem with the outrageous HOA will scare off potential buyers enough to drive prices down to the old co-op levels. After all, there are two apartments, 2 bed 1 bath, immense places with more going for them in appearance than this place, at 3300 N Lake Shore Drive, a much more sought-after neighborhood, languishing on the market for nearly a year now at $249K and $299K respectively, and a dazzling co-op at 3500 N Lake Shore, which Sabrina featured a few weeks ago, with a lot more beauty than this place, and no more HOA on a per square foot basis, that has just dropped to $200K, and it’s bigger and much more attractive than this place…. yet nobody’s biting. Any one of these three places is a blazing bargain compared to the place featured here.
$150K and they’d better be glad to get it.
Good analysis Laura. I love vintage units and would love to buy, but am nervous about these type of situations.