Market Conditions: Foreclosure Suit Filed on the Silver Tower: 303 W. Ohio in River North
Crain’s reported yesterday that a foreclosure suit has been filed on the Silver Tower, the new construction high rise at 303 W. Ohio in River North.
From Crain’s:
Bank of America has filed a $40-million foreclosure lawsuit on a 225-unit River North condominium project in what could be a preview for other slow-selling downtown high-rises.
The developer of the 38-story Silver Tower didn’t pay back B of A’s loan by its Dec. 29 due date, according to the suit, filed in January in Cook County Circuit Court. The developer, an affiliate of Oak Brook-based Metropolitan Real Estate Co., has closed on sales of just 76, or 33%, of the condos in the project at 303 W. Ohio St., property records show. Buyers began moving in last August.
We chattered about some attempted flips in the building in October 2009. See our chatter here.
Foreclosure suit tarnishes Silver Tower condo project [Crain’s Chicago Business, Alby Gallun, March 10, 2010]
Should we expect much lower prices on the remaining units once the foreclosure lawsuit is completed?
I was thinking the same thing as Simon. I went into these units and really liked what I saw. Plus I could walk to work since it’s only a mile away. The problem was that their asking price was higher than what I was looking for. Is an auction likely to happen over the summer and is this building something I want to get involved with respect to association fees.? Any thought from more experienced cc’s.
This is likely to happen in a number of buildings in the areas surrounding the loop where we’re overbuilt, right? Any thoughts as to what this means in terms of opportunities for an investor – a year down the line?
i’m kinda surprised the CC regulars aren’t all over this story.
“Any thoughts as to what this means in terms of opportunities for an investor – a year down the line?”
What sort of investor? Owner of a couple of condos? Or someone buying the whole mess? Planning on capital return in 1-2-3 years, or longer term CF? There isn’t any one answer for “investors”.
I think this was pretty much expected. Any high rise that isn’t nearly sold out right now will probably fail. I wouldn’t even advise buying if they did auction the units because you still have a lot of owners who got stuck over paying and are probably going to be heading to foreclosure at some point.
Stick to mid rises or the small walkups imho and well established buildings.
Yeah this building is probably only 25% full, only about half the floors on the north side (good side?) of the building ever have lights on, so I’d expect some pretty substantial (20%+) price drops in the short term to get them filled up like 565 quincy and the emerald
For any prospective buyers read the R&D 659 thread and see what some of the owners are going through in there. New construction is a crap shoot. What will the rental policy be in the building? Will the people that originally closed walk away when underwater? There are too many variables in my opinion to justify a purchase like that in this market. Keep saving your cash and see what develops
Not meaning to hijack this thread, but what are your thoughts on the SoNo development? I have a unit under contract there, but all these price slashes/foreclosures are starting to scare me.
Read this week that many banks are calling in their outstanding construction loans on their “troubled properties” portfolios, in advance of FDIC requirement to do so. Also, FDIC is auctioning several delinquent construction loans in its portfolio, where loan is one of several construction loans, requiring the remaining banks to discount value of their still outstanding loans on those affected properties to reflect the new discounted auction price of the FDIC-controlled loan. I expect many projects to now go into foreclosure.
Also, Crains just noted that FDIC is auctioning seven Chicago banks, including Broadway Bank.
Kirk is going to bury Giannoulias after his family’s bank fails. It’s going to be Obama v. Keyes bad.
All new construction buildings are likely to have some sort of growing pains.
As a resident of the RD659 and frequent commenter on that thread I can say that any issues with the building (some pointed out by me) turned out to be minor and were immediately addressed and corrected by Mesirow, who is a developer with a strong enough financial position to honor all warranties and guarantees;)
Not to say that issues wont arise in the future.
Know your developer. Unlike RD, buying into this building out of foreclosure may forfeit any recourse you’d otherwise have against the developer for building issues. A risk to keep in mind.
Also, percent of units closed at original pricing will be a major concern for owners purchasing at the inevitably lower ones.
Kind Regards.
I looked at this place and think while it looked like a solid building at a good location, the design and layouts were not practical. For example the 5 tier which is a one bedroom with den with two full baths. I can’t understand why someone would want two full baths, because it very unlikely that a person would live in the den, considering it is 9ft by 9ft. On top of that, they were charging $430K+ with parking and more with upgrades.
If you are one of the 70, I think you were duped.
Almost bought here, pulled out at the last minute. The EL noise is terrible with the windows/sliding door open unless you are 27+ stories up and on the west side of the building.
Sonies:
Not sure what view of The Silver you have but from my view, the portions that overlook Grand and Franklin, it appears to be substantially less than 25% occupied.
Buyers should stick with somewhat older, five years or so, buildings that have had their problems address and have an HOA with a record. I do realize though that the units in such buildings might be viewed as somewhat dated. For example, we have the Hollywood lights in our bathrooms.
I am at 330 W Grand. I can see the west side of the Silver and it has maybe 4-5 lights on at night, one often being the show unit.
I can see the North side of the silver tower (ohio st. side)and I see at least the first 5-7 floors (after the garage) are all of sold units with lights on. After that there’s only sparce units. I can’t really see the top floor units very well but I do see some lights on occasionally.
“I do realize though that the units in such buildings might be viewed as somewhat dated. For example, we have the Hollywood lights in our bathrooms.”
Only an idiot would prioritize the latest trendy fixtures above the financial stability and condition of their building. Then again the bubble brought with it a lot of idiots.
i bought a 2br plus den (biggest standard unit) and love it. haven’t delt with the developer too much, but all my issues with my unit were addressed in a timely manner. great layout, not worried long-term.
Does anyone know what kind of discounts the units are getting? It seems they haven’t changed the pricing AT ALL since the units went on the market (over half a year ago). So 3101, a unit I like, is listed at 800k. I wonder if the “real price” that they would take is 700k, or more like 600k?
Also – I wonder what effect the building’s status of being in receivership has on their level of desperation?
“The court has appointed Steven Baer, managing member of Chicago-based Rally Capital Services LLC, as receiver of the project. “It’s business as usual,” Mr. Baer says.”
Would the receiver fellow be more or less likely than the original developer to sell for a lowball cash price?
The views from Silver Tower:
http://www.youtube.com/watch?v=Uj905rEi1cA
“Does anyone know what kind of discounts the units are getting? It seems they haven’t changed the pricing AT ALL since the units went on the market (over half a year ago). So 3101, a unit I like, is listed at 800k. I wonder if the “real price” that they would take is 700k, or more like 600k?”
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I know they knocked a little off the original price since some of the one bedrooms are listed on the mls lower than their original pre construction offer price. However, I can’t imagine that anyone would want to go in there and buy right now with the prices they are offering. Thats why I figured I would hold off for a while and wait for price cuts from the new management or wait for an auction.
Prices will be reduced, but not by much as all sale prices will need to be approved by the court. They won’t allow any insane discounts as that would hurt the value of the building and other real estate in the city. The units will be sold as-is meaning that since you are no longer buying from the developer, you don’t get the 1 year warranty on craftsmanship or the ability to negotiate upgrades. Historically, the price reduction from receivership is around 10% and is negotiable. a $350k asking can probably go for close to $300k, and if held for several years will have a great opportunity to appreciate. The reciever is working to maintain a stable HOA and from the reports I have heard the reserves are fine and dues aren’t expected to increase. I believe this is the first high rise to go into receivership in Chicago, and it will hold its value because of that. All in all I feel it is a decent opportunity if you can part with that 1 year warranty, but with a building built with the quality of Silver Tower that doesn’t seem to be much of an obstacle. Units will sell faster now than they have since opening is my guess.
I was in contract, possibly one of the last in contract before they went public on the foreclosure…. They are trying to spin this as a fantastic event for existing owners and new buyers, but there is no benefit – only pain.
list was 293 + 35 for parking… I was in for 261 including parking….
Even at a nice discount, it wasn’t worth it for me on a short term place (3-5 years) and pulled out.
I tried to negotiate more, but they weren’t having it.
Prices have now been cut. I’ll do a post on the cuts tommorrow when I get more information.
Right now, I’m seeing 1-bedroom units priced as low as $171,000 (looks like parking is extra- but I need to confirm that.)
Sabrina:
Here’s what I’ve been able to find so far…
http://yochicago.com/jameson-rolls-out-new-silver-tower-pricing/14512/
I got a price sheet. There are two available at $171,310 but the next lowest is $230,256. I’m not sure why those two are so much cheaper. My first thought would be view but it can’t make up THAT large a gap. I’m interested in learning more about the financing deals they are offering.
Parking is $30K extra. Prices are non-negotiable
The 171k properties are probably low floors directly on the El tracks
“Sonies on March 25th, 2010 at 1:54 pm
The 171k properties are probably low floors directly on the El tracks”
that seems logical but they are actually south facing (albeit on the east end of the building). there are some anomalies too, like 1503 being $20K less than 1403; and 1805 being $10K less than 1705
Came back later in the evening around 10 pm on a Tuesday night off of the Ohio 94 ramp. Not many lights on at all
was psyched to check out new listing at 303 w ohio and will still do but sure am glad i came here. i’m new to home hunting, what happens to existing purchases in the long term when a building is unable to sell the majority of its units? what buildings in the area are more established and have better value?
the 171K property is a junior 1 bedroom with no balcony.
Silver Tower is negotiating prices. I successfully negotiated $20k of unit price and $10k off parking for total savings of approx 10%. They told me they wouldn’t negotiate as well, but if you are a real buyer, they will work with you. Also, don’t be fooled by the deadline for financing. I’m quite certain they will extend that financing offer.
I was in town last weekend at our place at 330 West Grand. The Silver still looks almost empty. Very, very few lights on Friday or Saturday night. I was looking at it both from our place and from street level while walking up and down Franklin .
I was in the ST earlier this week. Are they really going to negotiate? The sales person said that the prices were locked in because of the bank.
Also, what happens if a large number of the units are not sold? Will they slash prices again? If they do, won’t I be left out in the cold having paid the high price?
I’ve just received an email stating the price slash and aggressive financing incentives, question I have for everyone is….Is this worth the risk?
Its a decent building but with low rates, a 2 bd 2bth would be less than the 1 bd, den I currently rent.
Anyone have any updates on The Silver for Kitarp?
I’m looking for updates as well. I’d like to see how many extra units have sold because of the “reduced pricing and aggressive financing” incentives.
Thanks.
This place is filling up, much more lights on at night (on the north side of the building at least) but still probably 50% unoccupied on the side I can see with my own eyes every day of the week.
I have to say, lights are a hard way to judge. I live in Streeterville, facing some older buildings with only a few resales and the “new east side.” None of the buildings have that many lights on – especially on a Friday or Saturday night. The newer buildings are almost completely dark on weekend nights – until around 1 or 2.
Jameson Real Estate became the exclusive marketing agent for the condominium units at Silver Tower, effective March 20, 2010. Since taking over the marketing efforts, Jameson has sold 60 units, and the building is 60% sold.
In addition to the discounted sales prices, special financing is available and the project is FHA approved. 30 year fixed rates from 4.125% and ARMS from 3.00%.
Please visit us online at http://www.jameson.com/silvertower.
Open House Hours: Thurs 3-6 Sat/Sun 12-4 or by appointment.
Lindsey Delrahim | Realtor Associate
Jameson Real Estate
425 W. North Ave. | Chicago, IL 60610
C: 312.371.3652 | F: 312.229.9054
ldelrahim@jameson.com | http://www.jameson.com
seems that there are a number of blown out windows – been in the buidling quite a bit lately – lack of reserves is very concerning. Any insight? Is this one project to avoid?