Crib Chatter

Gosh, condo-hotels are suddenly hot with the media.   Crain’s is reporting financing troubles with the Mandarin Oriental, the condo-hotel and condo building at South Water and Stetson near Millennium Park.  It hasn’t broke ground yet and groundbreaking keeps getting pushed off.

In Sunday’s Chicago Tribune article about condo-hotels, the Mandarin refused to say what was sold.  Crain’s reports:

“The markets are tough, but we think this is going to be a landmark project,” Chris Kenny, CFO of Palladian Development, says. The developers have contracts for nearly 60% of the condo space and 55% of the hotel-condo space, based on square footage, he says, enough to obtain a construction loan.

If it’s so great, why didn’t he give these numbers to the Tribune’s reporter?

Crain’s is reporting that there were $3 million in liens on the property filed by the architect that could delay getting a construction loan. Why would the architect care about $3 million in a project projected to cost $750 million? Hmm…

The Mandarin’s architect was probably willing to let the project run up the bill only to a certain point, in a bet that construction financing would eventually be obtained, says Garry Benson, CEO of Garrison Partners, a Chicago-based residential marketing and consulting firm, who is not involved in the project. “Maybe they lost faith in the project,” he says.

Lost faith? In this market?

Imagine that.

I’ve said before that the Mandarin will never be built. And I’ll say it again.

The Mandarin Oriental will never be built.

(At least not for the next several decades at that location.)

After looking at the website for the Raffaello Hotel Condos, at 201 E. Delaware, it makes me want to book a room there.  Great lobby.  And it seems affordable, especially for that nice Streeterville/Gold Coast location.  The website touts web specials as low as $139 a night.

As we talked about in the other post about Trump’s condo-hotels, the Raffaello is a small boutique building that sold out its condo hotel rooms several months ago after only a year or two on the market.  They were originally priced from  $185,000 to the upper $300,000s (maybe those more expensives units were penthouse suites).

Eight units are on the market now, including this one:

Unit #606: 250 square foot hotel room with a mini-fridge and microwave

• Sold in July 2006 for $226,000
• Currently listed for $299,900
• Assessments run $258 a month
• Parking available nearby for lease

 The listing talks about how the rental program works:

Owner keeps belongings in room, stays whenever wants. If joins rental program, hotel management rents room when owner not using, owner gets half the revenue. Full range of 4-star facilities (restaurant, spa, fitness & business centers, rooftop deck) and services.

You can see why it’s a “losing” investment unless the property appreciates. At, say, $80 a night (even if it were to be rented out every night of the month), it would be difficult to cover a mortgage payment, assessments and taxes. If it were only rented half of a month- forget it.

And then there is maintenance. Furniture gets busted. Beds have to be replaced.

But if you travel enough to Chicago that you may want to use it for a week every month, maybe it is worth it.

Sister unit, #706, is also on the market.  That unit is listed for $319,800.  The most expensive unit listed is #709, whichi is one of the bigger rooms at 550 square feet.  It is listed for $419,000.

T. Manning at Baird and Warner has the listings for #606 and #706.

At least The Donald tells it like it is:

“The market in Chicago is dead as a doornail right now, as is the rest of the country, other than Manhattan or Palm Beach, Fla.,” Trump said, blaming the nationwide credit crunch. “But that will change. A lot of good things could happen in Chicago’s case. It has a great chance of getting the [2016] Olympics … and if credit becomes available again, that will help.”

The quote comes from yesterday’s Chicago Tribune story on the brewing troubles at Trump Tower and the other condo-hotel buildings in Chicago.

The condo-hotel is a strange real estate phenomena.  It’s a hotel room that you own.  You pay a management company (in the case of Trump Tower, it’s, well, Trump International) to rent out your room as a hotel room whenever you’re not wanting to use it. Trump claims that the condo-hotels in Trump Tower will start at $300 a night. Prices on the condo-hotel units range from $500,000 to $9 million.

Everyone in the real estate industry concedes that condo-hotels make poor investments.  You can’t cover your costs from renting it out as a hotel room (because assessments are high and you still have that big, pesky mortgage) but you are banking solely on appreciation.  From the Tribune article:

A Jones Lang LaSalle study found that generally these are not income-producing investments, Johnson said, adding that the potential payoff is all tied to appreciation.

“So if we’re entering a period where values are going to be flat, or God forbid, declining … it’s a whole ‘nother story,” she said.

“You need to approach it with second-home economics in mind, that ‘I’ll write a lot of checks, I’ll hold it until I’m empty-nesting, and then I’ll sell it,'” she said. “It’s not something you’ll get in and out of in a year or two or three.”

Some investors got in and out quickly before the condo market cooled, noted Steilen, of Warnick. “The idea of buying and flipping your contract for more money … is just not present,” he said.

The article gives the numbers on various developments:

Trump Tower:

• 65% of condo-hotel units sold with about 60% of those sold to corporate buyers
• 77% of the traditional condo units sold
• Slated to close in the next few weeks on the condo-hotels and in 2009 on the condos

Mandarin Oriental at 215 N. Michigan:

• Won’t say how many have sold
• “We’re comfortable with the path we’re on but in the current environment, like everyone else, we’re looking at various options,” said Peter Connolly, president for hotels of Palladian.
• Has not yet started construction

Elysian at 11 E. Walton (in the gold coast where the new Charlie Trotter restaurant is slated to open):

• 70% of 188 condo-hotel units have sold
• Slated to begin closings next November

Waterview Tower on Wacker Drive:

• Shangri-La will anchor the building
• 50% of condo-hotel units sold
• Already under construction

The question is: who will close on these condo-hotel units if there is no chance of appreciation for many, many years?

That is the question everyone is wondering.  Will significant number of Trump buyers walk away from their deposits?

“Frankly, there are developers who are concerned about buyers coming to the closing table,” said Scott Steilen, a principal at Warnick & Co., a lodging advisory firm.

The Trump team acknowledged the potential for no-shows, but said there have been no signs of hesitancy so far. “We’re in constant contact with purchasers,” said Ivanka Trump, Donald’s daughter and vice president of development for the Trump Organization.

Stay tuned. It could get interesting.

Not many developers would have the guts to announce plans for a massive luxury condo building in Streeterville when there are a dozen others currently being built within a mile radius, including the Chicago Spire, and when condo sales have taken a nose dive.

But Related is nothing if not ambitious.  Related (formerly LR Development) has developed some of Chicago’s most successful condo towers such as Park Tower, The Pearson, and most recently, the wildly successful 340 on the Park.  Related is known for quality construction and large units.

The Peshtigo is so named because it is located on Peshtigo Court and Illinois near Navy Pier in Streeterville.

This is not a small building.  At 58 stories it will tower over Lake Shore Drive.  The Peshtigo is smack in the middle of Streeterville, with Lake Shore Drive on one side and a possible new high rise on the west.  Lake Point Tower is to the South.  To the North is 530 N. Lake Shore Drive.

Floorplans and Prices

I have to give Related credit for their generous floorplans.  They don’t make any 800 square foot one bedroom units.  In The Pearson and 340 on the Park, the one bedroom units all have 1.5 baths and are over 1000 square feet (minimum.)  At the Peshtigo the one bedroom units range from 1244 to 1301 square feet.  There are three tiers of one bedroom units, with two facing west and one facing south/east (which would have lake views).

One bedroom units start at $480,000.  This is on the low end.  Most will be well into the $500,000-$600,000 range.

There are many two bedroom floorplans.  The most intriguing were one floor of duplex units, most of which were already sold.  Why don’t more developers build the duplexes?  Buyers like them.

The two bedroom units ranged from $700,000-$900,000.  The smallest two bedroom was 1477 square feet.

What’s Not to Like?

Some people will like the architecture of this building, some will not.  The windows are generous in the units, with some floorplans having windows in bathrooms and the kitchens, both of which are unusual features in most condo buildings.

My problem with it is this:

Beige.

Related is not allowing any individuality in the units.  This is a Related “thing.”  All of the finishes will be the same  (which is what worked in 340 on the Park.)  Every kitchen will have the same cabinets, the same countertops, the same appliances.  Ditto with the bathrooms. 

Here are some renderings of the Peshtigo units:

This building is being marketed as “luxury” and the prices are “luxury” as well.

Then why am I getting GE Profile stainless steel appliances?  Why aren’t I getting subzero or viking?

Why isn’t there marble in the bathrooms?

These may seem like minor quibbles, but competitor buildings are all providing this level of finishes.  I would expect the Peshtigo to do the same.

In my opinion, the finishes just weren’t up to par.  I felt like Related was trying to go the cheap route by providing the same finishes to every single unit.  Go to an open house at 340 on the Park one day and visit several units.  It gets a bit creepy after you realize they are all the same.

And it was, simply, beige.  And boring.

Sales Are Slow

The sales people told me that this building will break ground in spring 2008.  I inquired if that meant they would break ground regardless of sales or if they had to reach 50% sales before doing so.  The saleswoman laughed at me and said that they would of course meet the sales goal by then (which I’m assuming is 50%).

My visit to the sales center was several weeks after their “grand opening” (and at the time, I was the only person in the sales center in the middle of the day on a weekend).  It didn’t appear like there was any buzz with the building.  The sales woman told me that they had only sold a “handful” of units.  This was several weeks ago.  Maybe they’ve sold a handful more since then.

In this market,  your product has to be really competitive and exceptional to stand out.  There are simply too many new “luxury” buildings.

To me, The Peshtigo just doesn’t stand out.

The sales center is located at Peshtigo and Illinois.  There is no model of the units, but they have a kitchen and bathroom that you can look at (that look exactly like the pictures above.)

The Peshtigo, 515 N. Peshtigo Ct [website]

Foreclosures have been rampant on the south side of Chicago for the past few months.  They’ve also taken off in several downtown high rises.  But in recent weeks, there has been a slow creep of more listings on the north side, specifically Lincoln Park and Lakeview.

I wouldn’t call it a deluge.  But it’s happening.

Such is the case with this condo loft unit at 1735 W. Diversey Parkway (is this in Lincoln Park, Roscoe Village, Lakeview?  It’s on the border of several neighborhoods.)  It went to foreclosure auction this week.

Unit #608: 2 bedrooms, 2 baths

• Penthouse unit
• Sold in October 2000 for $206,500
• Sold in May 2003 for $314,900
• Auction price of $504,725

I don’t have any pictures of Unit #608, but Unit #615, a 3 bedroom, 2 bath is currently on the market for $515,900 and just had a $15,000 price reduction.  It is 1715 square feet.

It appears that all the units on the 6th floor have a long wrap-around deck like these two:

Koenig & Strey has the listing for Unit #615, which is currently on the market.  It’s also available for rent for $3,000 a month.

You know who you are.  You like going to The Cell in Bridgeport because of those big parking lots that surround Comiskey Park.  It’s soooo much easier than getting to Wrigley.

And here’s a secret: the food is better at the Cell too.

American League fans unite.  You too can live near your beloved White Sox.  Only, I had a bit of trouble finding suitable condos near the park so you’ll have to settle for a single family home instead.

Alas, the closest I could get you was about a mile west, but that’s okay because you’ll drive and park there anyway.

Did you know that Bridgeport is the oldest neighborhood in Chicago?  (yes, older than “Old Town”).  Only it’s hard to tell when you drive through the neighborhood because none of it was landmarked so many of the old historic structures were either torn down or have been so altered that their historic features are no longer visible.

Too bad.  But Bridgeport is booming with new construction right now.

This nice little brick house looks fairly new:

551 W. 37th St.: 3 bedrooms, 2. 5 baths, 2 car garage

• Currently listed for $494,900
• Keller Williams Quantum Premier has the listing

Or perhaps you like a little more sophistication.  This house has recently been renovated by some flippers.  Looks like they did a gorgeous job with the renovation.

832 W. 35th St.: 4 bedrooms, 3.5 baths, 3300 square feet,  2 car garage

• Sold in July 2006 for $307,000 (listed as a 3 bedroom, 2.5 bath house)
• Currently listed for $674,900
• @Properties has the listing

Go Sox!

You can find loft style units in every neighborhood of the city, even in Edgewater, not necessarily known for its industrial buildings.

This 1927 28 unit building at 5646 N. Kenmore is right on the edge of the Bryn Mawr Historic District at Bryn Mawr and Kenmore.  It’s not what you would normally think of when you think of “lofts.”

This part of Edgewater is seeing a big influx of restaurants and cafes with Starbucks, Mia Francesca and others all located on that block of Bryn Mawr.

The units in this building have distinctive concrete ceilings and big windows.

Unit #1C: 2 bedrooms,  2 baths, 1200 square feet

• Sold in November 2000 for $75,000
• Sold in January 2001 for $135,000
• Listed at $267,000
• Recently reduced to $259,000
• Washer/Dryer in the unit
• Listing says there is a parking space, not sure if its rented or with the unit
• Thomas Hall at Rubloff has the listing

The listing says it is not a garden unit.  But it seems to have this peculiar side patio.

As a comparison, Unit #4C, also a 2 bedroom, 2 bath unit, was the most expensive unit to ever sell in the building.  The history of Unit #4C:

• Originally sold in September 2000 for $147,042
• Sold in July 2005 for $244,000
• Sold in April 2007 for $235,000

Unit #6B is also currently on the market.  It is a 2 bedroom, 2 bath top floor penthouse unit with a private roof-top deck.  Also 1200 square feet.

• Sold in March 2004 for $204,000
• Currently listed for $289,900

It doesn’t have the authentic concrete ceilings.

Susan Morrow at Koenig & Strey has the listing.

Do you dream about the Cubs, wear Cubs shirts, go on Cubs cruises and just count down the days until opening day every year at Wrigley Field?

Why not live right next to the park?  You can live within a minute of the park and hear the roars of the crowd from your rooftop deck.  You can hang out in the local bars before and after the games.

I’ve always wondered, who is crazy enough to live right on Sheffield or Waveland with the park across the street?  Someone does.  Right now, there is nothing on the market directly across from Wrigley Field on those two streets.  But isn’t living only one block away good enough?  You can still hear the roar of the crowds while not actually witnessing the crowds or their shenanigans.

There is still time to buy and move in before next season starts.

You could live on Addison in a newly renovated greystone located about 1 1/2 blocks west of Wrigley:

1249 W. Addison #2: 2 bedroom, 2 bath, 1312 square feet

• Currently listed at $549,900
• 1 parking space (not sure if that’s included in the price)
• Two porches
• Prello Realty has the listing

Or if you want to be a little closer to the lake, there is always this vintage building that is a block east of Wrigley, also on Addison:

923 W. Addison #1: 4 bedrooms, 3 baths, 2400 square feet duplex

• Sold in September 2002 for $302,000 (not sure if this is the same listing as it shows it as 3 bedrooms, 2 baths but the same unit number)
• Currently listed for $449,900
• Parking space or rental parking?  (I can’t tell from the listing)
• Assessments of $217 a month
• Real Living Helios has the listing

If you must live on Sheffield, perhaps this unit a block north of Wrigley would still give you the adrenalin rush.  It has a private rooftop deck where presumably you can have the radio tuned to the game and hear the roar of the crowd at the same time:

3721 N. Sheffield #C3S: 2 bedrooms, 2 baths, penthouse duplex

• Sold in January 2001 for $290,000
• Currently listed for $419,900 (says parking is included)
• Assessment of $238 a month
• @Properties has the listing

Go Cubs!

Apparently, Shelbourne, the developer of the Chicago Spire, and the disgruntled next door neighbors, the River View Condominium Association, couldn’t reach an agreement on an underground easement.

Off to the courts they go!

According to Crain’s, the Condo Association filed suit in Cook County Court asking, not for money damages, but a court order nullifying the easement.  As a refresher, this is what the dispute is about:

The complaint alleges that officials with Garrett Kelleher’s Shelbourne Development Group Inc. and the company’s outside attorney, Thomas J. Murphy, falsely claimed they wanted the agreement only to run utilities lines under the property when they planned to construct a below-ground parking garage that would go down seven stories.

Mr. Murphy, who is not named as a defendant in the case, allegedly waited until after the condo association had signed the agreement, called an easement, before providing detailed plans that revealed the full scope of the project.

Without the easement, how will Shelbourne build the 7 story parking garage?  Whoops!

This is not good news for Shelbourne, which is running full page ads in the Chicago Tribune and other publications in anticipation of the sales center opening in January. A delay in construction could really hurt sales.

But basically, for the River View Condo owners, it stinks to be them.  Crain’s reports that the lawsuit alleges that Shelbourne’s engineering experts admit that the townhomes will sink 2 inches and suffer substantial foundation cracking.

Let the lawyering begin!

The gentrification of Pilsen continues to move further west, away from the Pilsen Arts District that surrounds 18th and Halsted.

The Chantico Lofts at 1061 W. 16th Street was a recent conversion of an old industrial brick and timber building into lofts.  With 42 units, its price points were a bit ambitious for a project in Pilsen that borders the Metra train tracks and is further west.

The building is gorgeous and the lofts sport tons of brick.  There aren’t many “authentic” loft conversions left in the city.

The developer is still trying to sell a handful of the units, mainly the most expensive 3 bedroom, 2 bath units on the top floor.  These three units are selling from $367,900 to $407,000. 

The building only closed late in 2006 and early in 2007, but there are some owners who are already selling.  I’ve also seen several rentals in the building.

Unit #301: 1 bedroom, 1 bath, 650 square feet

• Sold in December 2006 for $201,205
• Currently listed for $229,000 with one covered parking included
• Baird and Warner has the listing

Unit #111: 2 bedrooms, 2 baths, 1474 square feet

• Sold in December 2006 for $313,893
• Currently listed for $329,900 (with parking extra?)
• Century 21 S. G. R. has the listing