Market Conditions: Condo Market Feels Like It Did Leading Up to the Market’s Peak
Crain’s is reporting that 46 out of 48 units in Phase II at the Park Monroe at 65 E. Monroe in the Loop which went on sale 8 months ago have sold.
The Legacy, practically next door at 60 E. Monroe, however, still has 140 unsold condos but it has a higher price point.
“We really did flip a switch at the beginning of the year,” said David Wolf, president of Related Realty, which has sold about 150 South Loop condos after relaunching three failed towers there this year.
The nascent condo recovery reminds Mr. Wolf of the years leading up to the market’s peak in 2006, when planned condo projects would sell out prior to construction amid rising prices and a speculative frenzy. Yet high-rise development has yet to return, with developers focusing on smaller, less risky low-rise projects.
Many observers expect developers to start converting apartments to condos next, though high-rise construction might not be so far off.
“Developers are starting to look around and look for locations again,” said Ms. Young of the Park Monroe sales office. “I see the market picking up.”
Just last week we chattered about when a condo high rise conversion project would be announced.
With practically no new moderately priced high rise units on the market, and demand apparently exploding, is it closer than we think?
Any guesses on the first location?
Condo market comeback boosts sales at tower near Millennium Park [Crain’s Chicago Business, David Lee Matthews, June 4, 2013]
I’m going to go with Walton on the Park. It’s a luxury rental building that has beautiful finishes. The Trump has almost sold out, the Ritz Carlton is obnoxiously overpriced, and there is no other real luxury competition in the area (I don’t consider 2550 Lincoln Park to be in the same area). The building was once condo and switched to apartments. In fact, about 20 of the units in the building were sold at the end of the bubble. Now they can sell the rest of the units and make it 100% condo owned.
Note: I lived there for 6 months as a rental.
“I’m going to go with Walton on the Park.”
Good guess Mike HG. I forgot about this building. You’re right. It was built as condos originally. It would take nothing to suddenly convert it. Good location. The units in 10 E. Delaware down the street are selling quickly (even the flips.)
Hold on a second. Why bother with a conversion when you could sell the Apt. building at a ridiculously low cap rate to a pension fund advisor or a foreign buyer? Yeah, I know all they have to do is run the spreadsheets to compare the net proceeds of each process. Sometimes owners would rather do the conversion, because it gives them something to do for the next 24 months, keeps them “in the game”, gives them a job more or less, some people to hire and boss around, and perhaps some decent fee income in the form of a Mgt. Fee etc from the bank. These owners will have to refinance however, and find a condo conversion lender to take-out their existing CMBS, permanent, or other bank/mezz lenders. Not all of the existing lenders will want to be involved in a condo conversion scenario, some probably have never even underwritten one, let alone done one. So who is out lending for condo conversions?
65 E. Monroe is one ugly conversion. I hate the look of that building from the street. When I first visited the sales center years ago I recall something about the parking being a bit unusual. What was it that was off I just do not recall? Has anyone been there recently?
The parking garage at 65 E. Monroe is awful. The floor plate is the size of a 1/2 city block with super low ceilings and very narrow parking spaces. It’s amongst the worst I have seen in Chicago.
“I’m going to go with Walton on the Park…Good guess Mike HG. ”
I disagree with this & the know nothings comment. Iirc unsold Walton on Park units were acquired via cash purchase of debt & deed in lieu by borrower/developer maybe 2 years ago. Owner is a clearly savvy wealthy family w/ no debt on this. Why sell now? Rents are increasing & new apartments will primarily be lesser quality built in lesser locations. What alternative investment would likely outperform this one over next 3-5 or 10 years? Better option may be to finance out at today’s long term rates which avoids any capital gains.
“The parking garage at 65 E. Monroe is … amongst the worst I have seen in Chicago.”
Just for comparison: Ever been in the Onterie Centre public garage (worst I can recall in Chicago)? How bad compared to that?
worst i’ve seen is in the Flair tower… good lord how did they pack so many cars in there, it is NARROW and the spots are too! The entrance/exit is also horribly located
“The parking garage at 65 E. Monroe is … amongst the worst I have seen in Chicago.”
“Just for comparison: Ever been in the Onterie Centre public garage (worst I can recall in Chicago)? How bad compared to that?”
Is the park monroe garage the same as the public garage for 55 e monroe? I have been in a few times. Wasn’t driving but didn’t seem any worse than regular city garage. Haven’t been in onterie. I dislike the garage for trader joes by north ave.
Also, park monroe is wired for 4k tv (though I am not sure how that differs from being wired for 1k tv).
“I dislike the garage for trader joes by north ave.”
That has a much worse entrance/exit and flow than Onterie, but the Onterie spaces are mostly sized for Fiat 500s (and still small for that), and the ramps from floor to floor are *awful*.
“worst i’ve seen is in the Flair tower… good lord how did they pack so many cars in there, it is NARROW and the spots are too! The entrance/exit is also horribly located”
The bare minimum?
“Onterie spaces are mostly sized for Fiat 500s (and still small for that), and the ramps from floor to floor are *awful*.”
Completely agree used to park there on the weekends for my contract job. Couldn’t count how many times I got caught behind the d-bag from the burbs in his Escalade making a 14 point turn between the floors…
Worst One I’ve been in was 700 N Larrabee (yellow building) in River North due to being narrow and littered with columns.
I will say the 55 e monroe garage is worse than either of the garages attached to the two chicago apartments I’ve lived in, but doesn’t seem that different from a regular city garage. E.g., something like 900 n michigan.
I toured 65 Monroe several years back and that place was terrible. I can’t believe people are buying there willingly. I could image renting there for a couple years but long term… no way. I remember the agent tried to sell it as an “intimate” feel because only the upper levels are condo and the rest is office space. Yeah when I think over 20+ units per floor, I think intimate. LOL
Its actually kind of comical how close the cars are in that Flair Tower garage, only way you could have room is if you owned some compact car from the 80’s or maybe a miata or smart car (lol)
needless to say my land rover was not a good candidate to park in there
” I can’t believe people are buying there willingly.”
No word on whether the demand is organic (people) or synthetic (PE firms to rent them out). Nationwide already many PE firms are realizing either prices have risen enough or the cap rates aren’t there and they’re starting to bail.
“Also, park monroe is wired for 4k tv (though I am not sure how that differs from being wired for 1k tv).”
Good point, considering the fact that nobody is broadcasting such content yet. Could be fiber, could be the same ol’ RG6 cable we’re all using right now. Who knows.
Hilarious they’re advertising 4k tv wiring as a perk. Park Monroe better have some very spacious condos if they’re offering 4k tv as a perk as to even notice a difference from 1080p you’d need a display size of over 70″. For some reason I’m betting 72″ and above sets would seem out of place in these condos.
I ditto that Park Monroe sucks. The units are just cut weird. Many so called bedrooms lack windows. Even the location is not that great IMHO.
“Who knows.”
Was hoping jenny would.
“Park Monroe better have some very spacious condos if they’re offering 4k tv as a perk as to even notice a difference from 1080p you’d need a display size of over 70?.”
Your eyes being able to resolve 4k is function of both tv size (pos relationship) and distance you sit from tv (neg relat). So 4k tvs make more sense in tiny condos.
“Your eyes being able to resolve 4k is function of both tv size (pos relationship) and distance you sit from tv (neg relat). So 4k tvs make more sense in tiny condos.”
A 72″ is the largest TV I’ve seen recently, I have perfect vision. At a distance of 7′ some granularity is slightly discernable at 1080p.
Under your scenario that would mean people would need to be sitting less than 7′ away from at least a 72″ display. You sit any closer than 7′ and you can’t even see the whole screen in front of you. Your scenario is unrealistic and not really applicable.
The only benefit from 4k displays is for ultra large displays, which are quite unlikely candidates for these condos. Anyone who thinks 4k wiring is a perk is just a videophile/engineering geek in love with stats with no concern that the practicality of this perk is negligible to non-existent.
Maybe if buyers do a 5% conventional instead of 20% down, they can swing this: http://store.sony.com/c/S_4KTV/en/c/S_4KTV&k_id=_kenshoo_clickid_&XID=O:XBR84X900:dg_gglpla&kpid=XBR84X900?XID=O:xbr84x900:dg_gglsrch:pla&cagpspn=pla&gclid=CP_22oSBzrcCFUJlMgodW14AVw
^ the 84″
“Under your scenario that would mean people would need to be sitting less than 7? away from at least a 72? display. You sit any closer than 7? and you can’t even see the whole screen in front of you. Your scenario is unrealistic and not really applicable.”
I wasn’t offering a scenario. So I actually agree w you that 4k tvs don’t make that much sense. Frankly, I’m more or less happy watching a dvd on a big screen. But then again, I don’t have perfect vision.
My point is you’ve got to get close to a big 4k tv for it to matter. Where better to be close to such a tv than in a small condo. More likely a 7 ft viewing distance would make sense in a small condo. And if you’re the type to want a 4k tv, I don’t think you care much that it’s dominating your living room.
“Any guesses on the first location?”
My guess is that it is currently happening all over the city in great numbers: accidental landlords are selling to owner occupants.
“Many so called bedrooms lack windows.”
All the 1 BR units (which all face west) lack windows in the bedroom and many of the second bedrooms in the larger units lack window as well. Its the function of converting an office building with deep floor plates to residential. I just don’t see the draw in living in this building.
“Many so called bedrooms lack windows.”
All the 1 BR units (which all face west) lack windows in the bedroom and many of the second bedrooms in the larger units lack window as well. Its the function of converting an office building with deep floor plates to residential. I just don’t see the draw in living in this building.
” I just don’t see the draw in living in this building.”
Wake up at 6:00 a.m., in the office by 6:05 a.m.; work until 9:30 p.m. at night, at home by 9:32 p.m., watch a little Daily Show; fall asleep on couch – lather, rinse, repeat 6 or more days a week.
“The only benefit from 4k displays is for ultra large displays, which are quite unlikely candidates for these condos. Anyone who thinks 4k wiring is a perk is just a videophile/engineering geek in love with stats with no concern that the practicality of this perk is negligible to non-existent.”
That’s pretty darn good Bubbabob, I highly doubt southbound’s kids could spout out something like that.
“Wake up at 6:00 a.m., in the office by 6:05 a.m.; work until 9:30 p.m. at night, at home by 9:32 p.m., watch a little Daily Show; fall asleep on couch – lather, rinse, repeat 6 or more days a week.”
““I dislike the garage for trader joes by north ave.”
Yeah, indeed.. it may be too much for Clybourn yuppies to deal with, that ramp. Funny how Trader Joes and Aldi are the same company, but they put Aldi on the first floor and Trader Joes on 2.
You forgot a little private worship of Kate Upton by overworked Josh.
hang on I messed that up:
“Wake up at 6:00 a.m., in the office by 6:05 a.m.; work until 9:30 p.m. at night, at home by 9:32 p.m., watch a little Daily Show; fall asleep on couch – lather, rinse, repeat 6 or more days a week.”
You forgot a little private worship of Kate Upton by overworked Josh.
“That’s pretty darn good Bubbabob, ”
Bob pees sitting down… bwwaaaahhhhh!!!
“Bob pees sitting down… bwwaaaahhhhh!!!”
Had thought bob more of a man than to be someone’s pet. Oh well, it is what it is.
Or maybe hof is bobbo’s sponsor and he has to put up w it.