Is $199,900 the New Market Rate for 1-Bedrooms in River North? 2 E. Erie
This bank owned 1-bedroom at 2 E. Erie in River North is now listed at what seems to be the going rate for these conversion 1-bedrooms: $199,900.
This high rise was built in 2002 and was originally, I believe, supposed to be apartments but was converted in 2005 into condominiums.
The unit has carpeting throughout.
The kitchen has white cabinets, countertops and appliances.
It does have a washer/dryer in the unit and central air.
There is no parking with this unit, but other units have deeded parking in the building.
There are currently other units in distress in the building.
Is $199,900 the new “magic” number for 1-bedrooms to sell in River North? (although this one has been on the market over 40 days with no takers.)
Ayoub Rabah at Great Street Properties has the listing. See the pictures here.
Unit #3114: 1 bedroom, 1 bath, no square footage listed
- Sold in May 2005 for $263,000
- Lis pendens in June 2008
- Bank owned in January 2010
- Listed in April 2010 for $222,900
- Reduced
- Currently listed for $199,900
- Assessments of $346 a month (includes doorman, cable)
- Taxes of $3583
- Central Air
- Washer/Dryer in the unit
- Bedroom: 14×10
- Living room: 18×14
- Kitchen: 10×9
This place is junk. My rather large studio is listed at 127,500 and still there are no takers. And my unit is lovely. I have other factors mitigating against a sale (high assessments, no W/D, no parking), but there is no comparison between my unit and this unit.
The market for units like this one is decidedly not 199,000.
I hope so because my place is worth at least twice the value of this dump
I know it’s bank-owned, but do they really have to show pics with the toilet seat up? What, is that to prove that the plumbing is still hooked up? Gross. Might as well knock another 25 percent off the asking price.
Maybe renovate it with hardwood floors, SS appliances and a new bathroom and flip it for a profit?
The location seams to be good; right in the middle of River north.
I rented a 1 br condo here a few years ago for about 1550 a month. Locaton is great but the finishes are rental quality. “central air” is a 2 pipe heating/cooling system so temperature control is a little annoying during the transition seasons. Gym and roof deck were above average.
looks clean, building seems nice, reasonable assessments, high-ish floor, great location. it’s very blah and i don’t like it, but there’s nothing awful about it. there are places in uptown that aren’t much nicer and are asking almost this much and with higher assessments. could be much worse
I would say 150 or less.
I currently rent at 10 E Ontario (building next door) and pay 1200 for a JR.1 Bed and I’ve seen it listed for 150 – where this building has better amenities (pool, balcony).
Rents seems to be on a downward slide as I’ve seen places for 1G to rent for a 1Jr Bed.
Is $199,900 the New Market Rate for 1-Bedrooms in River North?
yeah, for a crap condo.
10 East Ontario is certainly no where on par with 2 East Erie, despite having a pool. 10 E Ontario was one of American Invesco’s last apt to condo conversions. It’s an old building ravaged by foreclosures and soon to occur special assessments bc of the copious back assessments. The buildings age also suggests you’re in for elevator and major building structure repairs. If you want worthwhile deals in River North, 33 West Ontario and 600 North Dearborn present true value plays. The challenge can be financing because of the high rental population in these buildings, but a number of the foreclosed units are actually Fannie Mae owned, which allows for special financing options. Look at the # of days on the market for 600 North and 33 West versus these smaller one beds at 2 East…or the absurd number at 10 East Ontario.
Also, the 14 unit is one of the smallest floorplans in 2 E. Erie. Circa 650/700 (tops).
Assume the rental is 1000 per month. My simple rule of thumb is 15 year payback or 7.5 percent cap rate. That comes out to 180k for fair value assuming you are willing to live here a long time but I would also ding the price for expected special assessments. I would guess below 150k you have low risk (not no risk) as a investment.
Bijan on the ground floor is an ok place to grab breakfast.
GLS – the rental rate for many larger one beds (Class A) in River North is closer to a range of $1,600 to $2,000 and potentially rising. $1,000 per month is a studio and even that is likely not something you want to live in for a while. See related article on Crains. Effective rate at $2.16 per square foot.
http://www.chicagobusiness.com/cgi-bin/news.pl?id=38336
Doesn’t that suggest a FMV in River North of something much higher than $180,000? More in the $250,000 – $300,000 range?
Kevin S,
I see those numbers in Crain’s and it suggests nearly 100% occupancy. I am curious to understand how many units are considered Class A in the total marketplace. I am also wondering who they are surveying. A quick look through Craigslist suggest there is no need to pay $2 per sq ft for rental in my opinion (I only pay $1.25 but that’s S Loop). But I would agree a very high quality 1BR in River North could go for $250-300K (maybe more).
I would also suggest one other phenomena that would support a more discounted value. People don’t buy 1BRs (I haven’t). There may be a premium, that exists for 1BR rentals because people tend to save to own 2BR or more.
How do you define a “Class A”? Is that a classification for the unit itself, the building or both?
I think the days of the $2000 one bedroom McCrapbox rental are over. When I was moving back from California, I was looking for rentals downtown to be close to work. I was pretty brainwashed from SF and didn’t realize how cheap it actually is to rent here.
The $2000 range I was looking at were RN buildings FILLED with divorcees, kids who parents were obviously paying the rent, and yuppies that were giving me the “don’t do it, man” nod.
$2000 a month rent gets you into REALLY nice 1 BR buying territory. Are all the $2000 1BR renters on the sidelines waiting for the market to hit bottom? Probably not. I suspect most of them are trashed credit types that couldn’t even get a car loan.
You know we’re far from the bottom when some rehabber hasn’t snapped this place up already…
Through your bitter rant, chicagobull, you do confirm the Crain’s point, which is effectively, prime river north spots are up over 90% occupancy…regardless of who (divorcees, etc) are paying the rent. Curious where you ended up moving…seems as though you weren’t willing to pay the mkt rate others are.
Class A: Apartment communities in the most favorable locations with high levels of unit features and amenities (such as washing machines, quality finishes, walk-in closets) and community amenities (such as recreational facilities or a clubhouse). These apartment communities have state of the art systems, exceptional accessibility and a definite market presence. They compete for residents willing to pay rents above average for the area.
Kevin S,
You sure have a lot of goofy rental stats at your tips. “Class A” rentals really cracked me up. I was looking in the $2000 range not because that was my limit, because that’s just what it costs. It doesn’t get any more expensive than that here.
I was living in Pac Heights in SF. My rent out there was $3500 and I had the lowest rent of anyone I knew. As I said in my first post, rents were astonishingly cheap compared to where I came from. I had no problem affording it. That’s why I bought. I got a place in ELP for a 1/3 of what a comp in SF would run.
I just wonder who the people are that would throw away 2k a month on rent for a 1BD in this city. Looks like I answered my own question. “Trashed credit types”. Lots of those floating around to fill up those rentals.
chicagobull – the stats and term “class a” came were sourced from the article, suggesting I can read. Hopefully your vast San Fran real estate experience translated into a bit more involved analysis than “it is cheaper than San Fran”. I too own….a property with a 50% cap rate, should I choose to rent it out. Happy you found a deal as well.
This is a unique building that is just getting screwed due to the housing market in River North. It is distinctly nicer than the American Invesco properties in the neighborhood but not nearly as nice as some surrounding buildings (Fordham, Pinnacle, 55 East Erie, etc.). Although it used to be a rental, most of the units were upgraded before the conversion (laminate floors, granite countertops, etc). Plus the location can’t be beat. But there are some units that weren’t upgraded and are in distress, which screws the comps in the building. It’s a great location with great amenities (above average gym and roof deck). But what hurts is that there are too many renters and the distressed units hurt unit value.