How Low Will They Go in 10 E. Ontario in River North?
We’ve chattered about the distress sales in 10 E. Ontario in River North numerous times over the past few years.
Even I can’t keep up with the pace of the foreclosures in that building (and also the sales.)
This 1-bedroom bank owned unit recently came on the market on the 33rd floor.
It has carpet and the white kitchen looks to be intact from the listing pictures.
There is no square footage listed, but based on other 08 tier listings, it appears to be somewhere around 650 square feet.
It has a deeded parking space, but no in-unit washer/dryer.
The listing does not say it has central air- but other units in the building have it.
This bank owned unit is priced about 65% under its 2005 purchase price.
But it is not even the cheapest 1/1 for sale in the building (that would be Unit #1404, which is under contract as a pre-foreclosure, and is listed at just $80,000).
How low will these 1-bedroom units go before prices stop falling?
Below- you can see a continued deterioration of prices in the 08 tier units in just the last 7 months (with the caveat that we don’t know the condition of each individual unit).
- #2808: $168,000 in May 2010
- #1108: $139,000 in May 2010
- #1908: $160,000 in April 2010
- #2208: $170,500 in February 2010
- #2408: $181,500 in December 2009
- #1808: $185,500 in December 2009
Ayoub Rabah at Great Street Properties has the listing. See the pictures here.
Unit #3308: 1 bedroom, 1 bath
- Sold in December 2005 for $404,500
- Lis pendens in August 2008
- Bank owned in May 2010
- Currently listed for $138,600
- Assessments of $507 a month (includes doorman, pool, heat)
- Taxes of $4519
- Central Air
- No in-unit washer/dryer
- Parking included
- Bedroom: 11×17
- Living room: 16×21
- Kitchen: 8×8
100k makes it interesting; just wonder about hoa health with somany foreclosures
Hard to believe a place like this ever went for 405k
I mean the quality of this place is that of like a 1k a month rental…
Almost $900/month just for tax+assessment… seems pricey even if you paid in cash. Would it cost much more to rent a respectable 1/1 somewhere nearby?
$405K? Did someone actually sign the documnets at $405K for this place? Are you kidding me. What was the logic there? Were they comparing the per sq. ft. prices to Trump at that moment and explaining what a “value” this building would be in a few years?
How did they sign that note without laughing? I would love to meet the person that wrote up the assesed value of this property for the bank. How could they have thought that this was the current true value of a crappy one bedroom in a class 2 tower on Ontario.
The bank should prosecute the idiots that “assesed” all of the proeprties from 2004 to 2009 for fraud. Clearly they did not do thier jobs. I think that the assesors are a major part of the problem we face today. That unit should have never assesed anywere near $405K NEVER EVER!
Ouch,
i wonder how bad the HOA is and what the state of back ass fee’s are.
it must be very scary to live in this building.
I live here now – it’s ok place for me to rent as relative cheap compared to other places.
Should have never been converted by the famous American Invsco (who promised 2-2-2 (2 years paid assessments, rents, taxs) – owner/investor was responsible for mortgage – which is why the sheeple thought 400k for a rental quality unit was a wise investment.
Real Estate (and the whole FIRE economy) is all paper. Of course assessors rated properties high as it results in higher taxes (revenue) for govt. Also, higher prices results in high interest payments (tax/revenue) etc. Follow the money.
Back to ontario place. Great location. Quality of building is low grade. Elevators go out of service probably every few months (but talking to the maintenance guys – they don’t know any of pending replacements of them). All the exterior windows especially the patio doors are drafty as hell and you can hear street noice at a low floor.
The gym is pretty nice, sauna is nice dated. Pool is ok – but poor position as sun gets blocked around 3-4PM so it’s really usable in the morning if you are looking for sun.
Convertible/Studios typically rent for 1200 or less. This is a 1 Bed so I’ve seen people pay 1400+.
yea, what a death spiral…great location though so you figure there’s got to be a bottom somewhere in site…but wow, what a mess.
I’d love to know what some of the regular Realtors know about this building? What have other 1 bedrooms closed for?
wow! those taxes are high! my taxes for a 2/2 in river north are less…
are the banks even lending to buyers in this building? I don’t know how they would get past the HOA mess when they conduct their due diligence on the building…
Given the number of foreclosures in the building, I would be surprised if the development is considered “warrantable” by fannie/freddie at this point.
This building looks like it is on its way to becoming apartments.
“This building looks like it is on its way to becoming apartments.”
How does that work exactly?
Basically, the building has more value as apartments than as condos. A developer runs the numbers and buys out all the current owners who are probably eager to get out of the building. The bubble term is “repartment” where a number of condo developments have been converted back to apartments. Not as common here in Chicago, but a lot of them in FL, AZ, and CA.
The problem with buildings like these is that they are severely dated and I bet most of the units have not been maintained. The HOA fees are high so there is no rent parity. Why would anyone pay a premium above renting to live in essentially a rental building with crappy units?
I wouldn’t touch most high rises in Chicago with a 10 foot pole personally…
“I wouldn’t touch most high rises in Chicago with a 10 foot pole personally…”
Totally agree. When a building is in a death spiral there is way too much risk in getting nailed with special assessment after special assessment. They couldn’t give me a unit here if I was obligated to pay the assessments and taxes.
I was curious how it would work to convert condos to apartments.
Thanks for the info Russ!
“$405K? Did someone actually sign the documnets at $405K for this place? ”
They probably got the 2/2/2 guarantee, paid in cash upfront at closing. Calling it merely an attractive nuisance would be rather charitable.
Could the $405K be a mistake or typo in the record? $405K for this crappy unit doesn’t make sense whatsoever.
“Could the $405K be a mistake or typo in the record?”
Could be, but if it is, then it was repeated dozens of times. That was, more or less, what Invsco got for the places.
Check out this prior post on the building: http://cribchatter.com/?p=6064
The 80k unit sounds like a steal: your downside is capped at 80k.
Oh wait..you’re on the hook for the assessments of the building, including those that your neighbors aren’t paying that are going through foreclosure.
Back in Feb a Realtor(tm) was telling me how he just sold a unit in this building and what a great deal he got for his client. At the time I think 1/1s here were going for the 180s. I wonder what his client thinks now..
Thanks anon. I’m pretty shocked that so many people bought these awful units at these prices. Unreal!
A friend of mine rented in this building years and years ago before it was converted to condos, and the units were dated and depressing then. It doesn’t look like many were upgraded in the conversion.
“It doesn’t look like many were upgraded in the conversion.”
Think that 3308 reflects the standard update Invsco did–carpet, cabinets, appliances. The upgrade package (SS appliances, granite, etc.) was (generally–don’t know their exact pricing on this place) *notcheap* and not worth it, so not too many people got it. Especially not the high-ish percentage who bought w/o any intent to live in teh places.
People in Chicago underestimate the extent of the bubble and how investors from outside of the city (and state) were sold these units.
I’ve been told stories by numerous realtors that in 2005/2006 developers for several new construction and conversion downtown buildings were going to groups of investors in California and NY and telling them what a great buy these condos were.
From their perspective- they were buying a 1/1 in the heart of a major city for “only” $400k (or whatever the price was.) Compared to, say, SF or NY in 2006- these were bargain prices. From their perspectives.
They were sold the story.
In some cases, California investors bought up 20 to 30 units in some of these buildings.
“are the banks even lending to buyers in this building? I don’t know how they would get past the HOA mess when they conduct their due diligence on the building…”
The last I heard, but this was a few months ago, you had to have all cash to buy in the building.
Does anyone know if that is still true?
The untold story about the housing bubble and “foreclosure” crisis is the number of investors/speculators (specuvestors) and fraudulent purchases. At one point, something like half the foreclosures were specuvestors. The fraud numbers are insane as well.
Little old ladies eating cat food who can’t pay the mortgage is a small percentage of the numbers.
No lender is going to touch that building – too many renters, too many foreclosures, too many units with delinquent assessments, reserves probably aren’t high enough either. Large down payments won’t get around any of those issues. Even the portfolio lenders who don’t sell to Fannie/Freddie are being very careful about high rise developments.
Cash only…
I live in this building and have been here for several years. I was here for the Invesco invasion and it was disgusting. A real feeding frenzy for some sleaze bag realtors. Lots of out of state investors (one guy from Vegas purchased 15 upper floor units – he went into foreclosure long ago), parents of kids going to Kellogg, NW med school buying a place to sell in a few years at a profit ect.
I had a lot of pressure put on me to buy (Buy now or forever be priced out ect). I think most people fell for the 2-2-2. They also guaranteed an extremely high rent for those two years. After two years, the investors took a real hit when they found out what rent they could actually get.
I almost bailed for a SFH in 06-07. Decided that things were crazy expensive and continued to rent while saving additional money for a downpayment. Best decision I ever made. Now I am waiting for the FBs in Bucktown ect. to realize that their home is not worth what they paid at the height of the bubble and won’t be for years.
Location is amazingly great! Renting for a 1br in this general area is kinda expensive though. I’m guessing anywhere from 1500 to 2000 with parking.
“Now I am waiting for the FBs in Bucktown ect. to realize that their home is not worth what they paid at the height of the bubble and won’t be for years.”
The only downside to your plan is then you’d have to live in Bucktown. The thing is most FBs are stuck and can’t move because they took out a high LTV mortgage and owe alot so its not about them realizing it it’s about money limitations.
Instead it will be the distressed sales and longtime owners that continue setting an increasing share of sales.
I remember a coworker telling me in 2007 that I didn’t even need 5% to own and it was a great way to start building money off appreciation. I knew then and there things were crazy and it was less than a month later Countrywide stock started to crater.
I’m becoming more bullish lately though on the Chicago market in general: I am seeing many more foreclosures and short sales on the MLS and deals starting to pop up in ‘green zone’ hoods lately, though. Including some at or above rent parity. Its clear the banks are finally putting some of their foreclosures through the pipeline lately.
Still until jobs turn around it might be bleak..
http://www.marketwatch.com/story/without-jobs-housing-rebound-may-take-years-2010-06-14
Correction to my earlier post I obviously meant apprasiers and not assessors…..As Homer Simpson says Dooohh!
“The only downside to your plan is then you’d have to live in Bucktown.”
hahaha
I live across the street and have seen, on at least two occasions, “foreclosure tour” buses parked in front of this building, filled with Asian tourists (presumably Chinese). It’s pretty sad.
As for how they managed to get the valuation so high, they used comps from the surrounding luxury buildings. 55 East Erie, Pinnacle and Fordham to be specific. These are true luxury buildings, not anything like this building.
On the plus side, there is a Chili’s in the building. Priceless!
I laugh every time I walk past that Chilis… I mean… seriously? Chilis? There?
American Invesco are great at selling and pulled a fast one on these investors.
I use to live in the building for almost 3 years and loved the location. The building quality is sub-par. The management office is full of some of the lazies secretaries that I’ve ever encountered.
My unit was sold to a suburban “INVESTOR” for $220,000 in May. I was on the 31st floor which is 850 and was fully upgraded with low grad berber and cheap granite type material. My rent was $1700 which I now realize is at par with other upgraded units in the building. For some reason the demand for this rent is in high demand as they have very little inventory with these specs.
Last week I went back to see 5104 which is a larger 1 bedroom (900sqft) with south exposure. the view is amazing as you get Navy Pier, some of the park and part of the SEARS TOWER (always will be). Here is the kicker, 5104 is a in pre-foreclosure (short sale) for……………$154,000! Granted the low listing price is to generate interest to drive the price up but something just doesn’t seem right.
The building went condo in 05/06 so I highly think it will revert back to Apartments. I’ve looked at the reserves and 12 months of meeting minutes and they health of the building is in decent shape. They have no upcoming expenditures on the books so this building.
I know I’m all over the place but I know 5 people that have moved in within the last 2 months and they are all renting for $1600 – $1700.
“Could the $405K be a mistake or typo in the record? $405K for this crappy unit doesn’t make sense whatsoever”
Unfortunately, it is not a mistake. I almost bought a couple of “short-sale” units in this building in Jan 09 for 225-250k. I did a lot of research on the building and found out that the MAJORITY of the owners paid between 400-500 (mostly upper 400s) for the one bedroom units. It sounds crazy, but people really forget what a frenzy there was in 2004-2005 (so many stories about making hundreds of thousands of dollars in a few years, etc.). American Invesco had an excellent sales pitch and several examples. For many investors who had no exposure to real estate, this was a great way to diversify their portfolio.
I don’t blame the investors – I feel sorry for them.
I think is quite clear that 405K was never a realistic price irrespective of the bubble in the Chicago market. However, circa 100k does seem like a steal for the location. I did take a look at a few of the units last month, and although they do not compare to other buildings nearby, long term there still is an appreciation play for investors who can get in at this price, right?
Hello guys. I am realtor and i have monitored this building. All units in the building have multiple offers to buy at the 155K range and yes they are in cash offers. Additionally there are actually 3 companies with will finance this building. There are Marquette Bank, Guaranteed Rate and Met Life. This building has turned the corner and bottomed out. There have to over 100 closings in the building in the past 1 years and now seems like there is a lack of units at 150K prices. I have a feeling investors are going to revamp the units and re sale in the near future at 250K+ once the ratio in the building turns or the govt changes the lending rules to lend to troubled buildings… The GOVT is going to have to step in to stablize some of these buildings in the near future.. so something is coming… the rules are just stupid not to lend troubled building and create a spiral of foreclosures… Either ways the building has turned and for 100-150K can’t go wrong with a location of state and ontario.. where all other buildings are worth twice at much..
I rented in this building from late 2001 until early 2005. When American Invsco did their conversion in 2004 I listened to the pitch, and ran as fast as possible away from the salesperson. Even with the market doing well back then, their pricing was absurd! My crappy 615 sq ft convertible on the 39th floor was about $290K plus a mandated parking space for another $42K. The taxes and assessments were also insane, and you’d have to be a complete fool not to think that you would have to foot the bill at some point, after the 2-2-2 teaser.
My apt. was in the original condition from 1983, and in dire need of a rehab. AI did very little to the building. The plumbing system, the elevators, the windows and patio doors, etc were all in desperate need of MAJOR repair back then, and I doubt much improvements have been made. Even if you can buy a unit today at a discounted price, I would avoid this building like the plague. Given the amount of foreclosures and short sales, the association financials will be garbage, and you’ll be facing massive budgets and special assessments.
Not to minimize Manish’s comments above mine, but there’s a ton of properties out there, so why volunteerily buy into this money pit. as far as the government stepping in and helping out, keep dreaming!
The 2/2/2 deal should have expired around 2008/2009. So, does it mean that by today the worst is over? If many of the apartments closed well under $200K, is there a room to go lower? … Much lower? I am thinking on buying a place on the 10th floor now and the ROI will be 5-6%. It seems like a good deal to me particularly when I am getting less than 1% in the bank. So, tell me why is it a bad investment today?
During the “repartment” process, are apartments bought at a fare market value?
“It seems like a good deal to me particularly when I am getting less than 1% in the bank. So, tell me why is it a bad investment today?”
I really don’t think it is a good idea to buy here – for several reasons:
1. Although the purchase prices are very low, the assessments and taxes are high. Even w/o a mortgage, you are looking at 1000-1200/month just in taxes/assessments for a 1 bedroom. You can rent for just a little more (and remember this doesn’t include your mortgage).
2. With the high number of foreclosures in the building (as well as the age and general condiditon) there is a high chance that assessments will increase and special assessments are around the corner.
Please re-think about buying in this building. I really think it would be a huge mistake.
Is there a list somewhere for all American Fiasco properties?
seems like a list would be VERY important for new condo buyers.