Less Sizzle in 340 On the Park in Lakeshore East?
Units continue to sell in 340 On the Park, the hugely successful building at 340 E. Randolph in Lakeshore East.
According to public records, 3 units have closed so far in 2009.
But there appears to be a growing disconnect between the north facing side of the building and the south side- which overlooks Millennium Park. Additionally, market time in the building appears to be lengthening.
Last fall we chattered about the sale of a south facing 1-bedroom unit for $715,000.
See our prior chatter and pictures here.
The 1186 square foot one bedroom went under contract after just 21 days.
Unit #1107: 1 bedroom, 1.5 baths, 1186 square feet
- Sold in September 2007 for $649,000 (included the parking)
- Was listed in September 2008 for $720,000 (I couldn’t tell if this included the parking or not)
- Sold in October 2008 for $715,000 (including one parking space)
The unit below it, Unit #1007, came on the market shortly thereafter and hasn’t been as lucky.
It remains for sale.
Unit #1007: 1 bedroom, 1.5 baths, 1186 square feet
- Sold in August 2007 for $475,000
- Originally listed in November 2008 for $720,000
- Currently still listed for $720,000 (looks like parking is extra)
- Assessments of $412 a month
- Taxes are “new”
- Jerry Borchardt, Realtor has the listing. See the pictures here.
A large 2-bedroom north-facing unit came on the market in January 2009 and has since been reduced $100,000.
Nicholas Colagiovanni at Baird and Warner has the listing. See more pictures here.
Unit#604: 2 bedrooms, 2.5 baths, 1902 square feet
- Sold in August 2007 for $719,000
- Originally listed in January 2009 for $899,000
- Reduced
- Currently listed at $799,000 (parking $50,000 extra)
- Assessments of $703 a month
- Taxes are “new”
Almost double the bubble, I wonder why. How many potential buyers are looking for a 700k 1br??
I actually like these north facing units BETTER than many of the south facing ones (including the one that sold for so much), because these North facing ones don’t have the BC/BS building breathing down their neck.
Oh, also, was there really that big of a difference between early preconstruction pricing and late preconstruction pricing? The initial sales prices of 1007 vs. 1107 are really striking.
“Almost double the bubble, I wonder why”
That was a pre-construction price–probably opening weekend. I don’t think that the $175k difference b/t 10th and 11th floors is explained by anything other than contract date. And the ask is clearly based on the ask and close for 1107.
And it’s really only a little more than 50% higher.
The difference in pre-con pricing was huge. At the time LR properties had a loyal following from their development at the Residences on the Park (on Pearson). When I visited the sales center for their building on Peshtigo they thought it would continue with the sales agent proclaiming “it will be built” Not sure what is going on with “The Peshtigo” though.
“Not sure what is going on with “The Peshtigo” though.”
Peshtigo is Pesh-ti-gone (as their adverts would have said, if they’d sold all the units). Even if they’re still marketing it, it ain’t happening anytime soon.
Nice marketing job on Unit #1007. I mean come on… how big would have commission be? You think some nice photos would be included.
“You think some nice photos would be included”
Looks like they uploaded teh thumnails instead of the actual photos. Ooops.
OT (both for this entry and this blog, but…): Anyone hear that the Sears Tower is getting renamed? To the Willis Tower?
(Cue: “Whatchu talkin’ ’bout, Willis?”)
I heard they were going to paint the Sears silver too. That would look like crap!
How is a 1900 sq ft 2 BD/2BA only $70 000 more than a 1BD almost half its size? I don’t get the pricing in this building. Even with pre construction discounts, that seems a bit weird.
It makes sense that pricing would be illogical in a building like this, because anyone paying $700,000 for a one-bedroom condo is not thinking logically. No matter how nice the unit is, it isn’t worth that price, and anyone buying is the type of impulse buyer that doesn’t do much research. It could have cost $1 million and the same dreamer would have bought it, provided their trust fund hadn’t yet run out.
“How is a 1900 sq ft 2 BD/2BA only $70 000 more than a 1BD almost half its size?”
Why are oceanfront hotel rooms almost twice the price of island view? Same principle–the 07 units face the park, the 04 units face north, plus 604 doesn’t have much of a view of anything.
What was the spread on 07 v 04 on the higher floors, where the 04s would have a reasonable north view?
If i was paying that much for a 1br, i’d certainly want a nice view.
For whatever it is worth as it relates to property values. Hotels seem much cheaper in Chicago right now. Strange booking a hotel in a city you lived in a few months earlier.
“Hotels seem much cheaper in Chicago right now.”
Shoulder/off season + reduced business travel + increased competition = lower rates. Four Seasons/Peninsula/Trump aren’t cutting rates are they?
#Sonies on March 12th, 2009 at 1:05 pm
If i was paying that much for a 1br, i’d certainly want a nice view.
If I were paying that much I’d want a hot maid included that gives me blowjobs on command.
four seasons and penninsula might not be cutting rates but there sure are a lot of stay 3 nights get 4th night free kind of things that equate to 25-40% reductions. Never stayed at Trump so I can’t speak, but I can’t imagine he is any better off.
“I can’t imagine [Trump] is any better off”
He has to be worse off, b/c he has a construction loan outstanding and he’s operating under a forbearance agreement of one sort or another. He’s got to be very constrained w/r/t rate adjustments, and that may be further constrained by the Hotel Condo structure (I don’t know if that is true, but it seems reasonable).
I have a friend that lives in Trump and by far it’s THE nicest establishment for an over priced condo building. If you are going to spend 700k on a 1br, Trump is the way to go, outstanding liens or not. Problem with living at 340 OTP, though very nice as well, is that you have nothing around you but other condos until you cross Michigan ave!
The lobby is impressive at Trump; The units I toured there were not anything special; You can find distressed sellers all over the place that cannot even close on their units wanting to assign their contract…and this is with what I thought was a 30% down requirement by Trump. Prices are under severe pressure in this building. But I do agree that the amenities are impressive, but so are the 800-900/month assesments for the one bedrooms..a great rental though.
from drew:
“you have nothing around you but other condos until you cross Michigan ave!”
This is why I bought in 340 and not in River North or Streeterville. I lived in Streeterville for a short period of time, and the warmer months its nothing but tourists and suburbanites trapsing through your “backyard”. 340 OTP is less than 5 min from Michigan Ave, and the Loop, River North, and Streeterville are short walks away. Also, 340 now connects to the Chicago pedway, so you don’t even have to go outside in the winter months to grab a quick bite or go to CVS.
I think the comments about spending 700k in trump vs 340 is a personal preference. Both buildings have great ammenities, and the views from the trump SE side are comparable to the south side of 340, although the unit layouts in 340 are a bit better.
Also, don’t be dissuaded by unit 604 being on “only” the 6th floor, its actually 12 stories above the park to the north side of the building(the buildings are all elevated so their first floors are at the level of upper wacker). Do the math on these units. Assuming the seller would come down to the range that 1604 sold for, its under $400 sq ft, which good compared to how things in the area are closing, even in this market.
I’ve seen a bunch of places in this building and it is overpriced for me (obviously not for some others). There is no doubt the selling point is the views, but the sameness of all the kitchens, low ceiling heights, boring layouts, average finishes, average location (some of us like having tourists and suburbanites in our neighborhood, as it adds to the density and vibrancy of the neighborhood). The reality is that there is simply not much around there after dark, and I am talking about right out your door. In this regard, Trump is a much better location, and I think a much better building (although it doesnt justify the price points at which the developer is building). 340 is a nice residential tower, but in no respect is it luxury on par with the new Ritz, Elysian, Trump, 50 E. Chestnut, the failed Waterview, Palmolive, etc. It is a tier-two building, but there is nothing at all wrong with that.
340 is absolutely amazing, especially when you’re standing on the south facing terrace overlooking Millenium Park on a sunny Summer day. I see only the Ritz, Polmolive, and Elysian as true luxury. Trump is a nice building for “now” but once it gets older it will never have that “timeless elegance.” Besides I can’t stand who it is associated with and the fact that all over the world the ugliest buildings in NY, Asia, Miami, etc. are Trump!
One big knock on Trump is that most units have no outdoor space.
The Elysian is not “true” luxury yet. Time will tell on those layouts/hotel/condo concept and finishes.
340 has great views but isn’t luxury.
Palmolive is luxury as are some buildings on E Walton and of course, E Lake Shore Drive
Friend in the building just told me that unit #204 sold for about 6% under list; list price was $849,000. (#204 has a really huge terrace.) Friend says that pre-con pricing for the unit was well under $700K. I don’t know what the story with parking was; I imagine it was included in both final sale prices so that the under-$700K price is apples-to-apples with the 6%-under-$849K price.
I’m really amazed/impressed by how well this building has been holding up in this market.
#204/p566 closed 6/26/07 for $639,000
#204 listed 3/23/09 for $924,900 plus pkg, reduced to $849,900
#204 contract 8/27/09 for ?, currently pending
There is no doubt that this is the best performing bldg of the bubble. Yes, that includes the delusionional hotspot at 600NF.
It might be time for an update?
Elysian is going to wind up mired in lawsuits just like Trump did as investors finally realize what a bum rap they got with these ‘condo-hotel’ buildings.
I don’t have a lot of hope, nor pity, for the owners of Trump, Legacy, Elysian, Aqua, etc. Far too much capacity in the luxury condo segment than people that can reasonably afford it, is my guess.
I knew I could count on you, G! Funny anecdote–apparently neighbors were a bit upset with owner of #204 for letting it sell for so “little.” 🙂
Yes, I’d love to see an update on this building, Sabrina. Was just in it the other day. It really is quite lovely–views on both sides are very good (the 204 is north-facing). At the same time, I still don’t quite get why it is Teflon-coated relative to its peers. But I sure do wish I had bought there pre-con. Of course, hindsight is 20/20–I’d never actually be the sucker who buys into new construction. It could turn out like 600 NF or the Aqua.
Oh, and G, I *think* 600 N Lake Shore Drive has done ok, as well. Probably has much to do with the fact that they didn’t allow investors (“no sale” rule for 1 year).
EH, tired of this building. I was in there the other week and the hallways looked beat up…probably from all of the renters
They looked ok to me, on the 6th floor, the gym floor, and the 60-something floor (storage spaces, oddly enough).
Don’t get me wrong, I think there are potential problems down the road with every unit looking exactly alike, but as it is now, I think it’s looking pretty good. (Actually, I would have thought the uniformity of the units would already have been a problem, but this building continues to defy all my predictions.)
“Elysian is going to wind up mired in lawsuits just like Trump did as investors finally realize what a bum rap they got with these ‘condo-hotel’ buildings.”
From whats been reported and speculated is that they are going to cancel the hotel condo contracts and operate the hotel as a traditional hotel. No one will finance a hotel condo now.
15 units closed since 1/1/09.
9 units closed since 6/1/09.
28 units currently active.
2 units currently pending.
I have been looking at this building for a while now, just waiting/hoping for the pricing to correct a little so I can get in. It appears that might never happen because the sellers won’t consider anything less than the list price. I offered 10% below list price for a unit looking North over the development site for the “Village Market” and the seller did not even respond. I am in the commercial real estate business and a reasonable offer right now is 25% below the whisper price – so, I thought I was in line. What would a reasonable offer would be?
Also, with the end of the selling season for residentail property nearing, do you think this building will correct 15% or so like other high-end buildings in Chicago did over the last 18 months?
BJC,
No good way to predict what’s going to happen over the winter. As several of us have noted, this building has defied expectations, and continued to command resales that gave profits to the seller. It’s possible that trend with continue, but it’s also possible that prices will flatten, and also possible that the building will “correct.”
Things that suggest it won’t “correct”:
–path dependence. This building is a success, and so the risk averse, who are willing to pay more for a building that hasn’t failed, will buy there, keeping prices high(er).
–the building seems solidly built to *me.* Sure, it’s no Olympia Center or 1212 N. LSD, but for brand new construction, it turned out really well.
–great views that won’t change, both N & S. Again, the risk averse will pay a premium for this.
Things that suggest it will “correct”:
–there are lots and lots of rentals in the building, from what I understand. This is because lots of sellers see profit-making resales, and would rather lose carrying costs month-over-month than accept less than their wish prices. (It is def. cheaper to rent than buy in this building right now.) But not everyone can get their wish prices. If real estate generally continues to tank in Chicago, these sellers may not be able to hold out. It only takes a few to start driving prices down; as G reminds us, prices are set at the margins.
–the units are really uniform. Once critical mass is achieved, there won’t be much to distinguish the units other than price, which could inspire price wars.
That’s all I can think of. If I were you, BJC, I’d rent there for half the price of buying. It’s very unlikely you’ll get “priced out” even if prices continue to appreciate, because the break-neck appreciation simply can’t sustain. And there’s a good chance you’ll be able to pick up a unit–perhaps the very one you’re living in–from a seller who finally has to throw in the towel.
Just looked and not much for rent in the building right now. The HOA capped the rentals at 15% last year so not sure if that has anything to do with it. Also, 6 units closed and two pending in the last 3 months. 4 of the units sold over 1 million so it seems people are still willing to spend their money here. Doubt an owner will need to “throw in the towel.” No need to drastically cut prices when a small price change will get the job done. Even #204 is under contract which will look directly in the new market area. The only units not selling are the three bedrooms looking at the BCBS building. Having an office building with lights on all night reflecting in your windows is a tough sale. You might see some price cuts here.
BJC, the selling season in residential is good through Sept and Oct. (typically better than July/August). Doesn’t die off until NOV. Maybe wait till December, if the unit is still for sale the owner should be ready to deal.
Thank you all for your feedback.
You are right that they have capped the rentals at 15%, which I would think would put downward pressure on pricing. When an investor that can no longer carry the property, wouldn’t they then be forced to sell (and sell at a discount) if the building has reached the maximum rentals?
Regardless, I have decided to leave my offers out there and wait for a bit to see what happens over the next couple months.
BJC:
From what I have heard (but someone please correct me if I’m wrong)- the rental cap was grandfathered in.
So if 30% of the building was rented at the time they voted in the cap- then that 30% can keep renting. It’s the new owners who are subjected to the rental cap.
This is the only way a rental cap passes in a new building with a ton of investors/rentals. Those current owners want to be guaranteed that they can keep renting (and they can.)
I have been reading thru all your great comments and would like to know what a one bedroom – 1307; 1107;1007 (now selling in the $700K range – went for during preconstruction pricing and is the apparent $100K difference between the north park view and the south view with balcony on the Millenium park side ($100+ more on the south side)
I am not from Chicago so does the market flatten in November thru the winter months
BJC and Butch –
This building might continue to defy expectations.
But at he core it’s heap.
Who the heck touts “GE Monogram appliances” in a $1mm+ condo. Maybe if you’re buying a $250k twinhome in Beloit. But cripes, here? Really?
The ‘hardwood’ floors look like they’re from IKEA. Nothing wrong with that, but at this price? Cheap cored doors. Bathroom fixtures etc that are way less than what you find in similarly priced park view units. Minimum of cabinet space. Pretty bleak storage.
So, if the stuff you CAN see is that cheap, it darn well makes me worry a lot about what you CAN’T see. No joke, I’ve been in Holiday Inns that have a better ‘feel’ than this place
Sure, the views are great. But what a drek building. The developers out to get caned (not canned, caned) for dropping this loaf in such a great spot.