Crib Chatter

There has been an interesting discussion in the comments about one of my 340 on the Park posts about the fantastic views at that building.  And they are spectacular, with views of the harbor, the Lake, Millennium and Grant Park and the downtown skyline, including the Sears Tower.

Only, you could have found out they were great by asking the residents living right next door, such as those in The Buckingham, which is at 360 E Randolph, and at 400 E Randolph.

Recently listed on the market is this rather large one bedroom on the 23rd floor of 360 E. Randolph:

ABSOLUTELY GORGEOUS VIEWS OF MONROE HARBOR, GRANT PARK & MILLENIUM PARK! RARELY AVAILABLE SOUTH FACING LUXURY 1 BDRM/ 1.5 BTH, SEP MASTER SUITE, POWDER GUESTS RM, TONS OF CLOSET SPACE, IN-UNIT W/D. MARBLE FOYER, NEW APPLIANCES, NEW CARPETING,FRESHLY PNTED 2 GAR PKG ADDL $47K. EACH FULL AMENITY BLDG: INDR POOL, SUNDCK, FITNESS RM, ON-SITE MNGMNT 24-HR DRMAN,PATIO FOR GRILLING.

It’s listed for $479,000.

Compare that to one of the south facing units at 340 on the Park (granted, that building is brand new and has great amenities like the indoor garden) and they are also slightly bigger, but those are re-selling for the starting price of $625,000 without the parking and going up from there.

Yes, it’s somewhat comparing apples to oranges (new v. old construction) but since everyone is so obsessed with the views at 340 on the Park, it is a fair comparison on that point.

You are saving at least $150,000 by buying next door for the nearly identical view. Or if you are fine with going a little smaller, you can get a south facing unit at 400 E. Randolph for $439,000 (for 860 square feet.) That’s nearly $200,000 cheaper.

New Century Realty Inc. has the listing on the 360 E. Randolph unit. Walter Stunard at Rubloff has the listing on the 400 E. Randolph unit.

How much is the nearly identical view worth to you?  The pictures below are from 400 E. Randolph.

If nothing else, the owners at 360 and 400 E. Randolph must be thrilled that 340 on the Park has come into their neighborhood. The buzz about the area is only going to make their own buildings even more attractive to buyers and push up their own property values.

I have already discussed how The Sterling, at 345 N. LaSalle, in River North, is the #1 Foreclosure Building in Chicago, a title one would not want to be holding, that’s for sure.

But things in the building seem to get worse by the month.  Yet again, owners in the building appear to be in major distress.

Another new foreclosure auction has been scheduled.

Unit #2804: Studio

• Last sold in January 2004 for $226,700
• Auction price of $201,763

There was an ad for an auction in the Chicago Tribune this weekend for a unit:

Unit #3302: 1 bedroom, 1 bath, around 800 square feet

• Auction price with an opening bid of $100,000
• Auction held at 6:00 pm at 1141 S. St. Louis on October 22

However- this unit number seems to be wrong.  Unit #3302 is actually a 3 bedroom, 2 bath that sold in 2002 for $830,000.  Anyone with any info on this auction?  Did anyone go? 

Also, there continues to be several foreclosures still for sale in the building.

As one commenter pointed out, the building also has a special assessment due to repair on the outside facade work.  Does anyone have any more details?

It’s not a good time to be an owner at 345 N. LaSalle.  Apparently, when it rains, it pours.

The slowing market is hitting some of the smaller developers.

I have discussed the slow sales at 334 W. Menomonee before. Units at the historic conversion at 334 W. Menomonee in Old Town were recently reduced after only 4 of the 18 units have sold.  The developer also has many of the unsold units available for rent.  You can see the floorplans and which units are available at the Melrose Partners website.

Some of the reductions:

Unit #304: 1 bedroom, 2 bath

• Originally listed for $499,000
• Now listed for $429,000

Unit #102: 2 bedroom, 2 bath, 1400 square feet

• Originally listed for $649,900
• Now listed for $579,000

Unit #205: Studio

• Originally listed for $279,000
• Now listed for $249,000

The price cuts average around 15%.  This is an interesting time to be price cutting (at this time of the selling season.)  Things historically really slow down going into November and December.

As I talked about before, this is a beautiful conversion of a historic building in the historic triangle part of Old Town (i.e. it is “real” Old Town.)  There are brick sidewalks in front of the building. 

But there is no parking available and the price points were higher than any of the conversion products being sold in the neighborhood, such as Crilly Court, and even higher than the new construction prices in the neighborhood (on a per square foot basis.)

We’ll see if these price reductions will move some of the units this winter.

Both Crain’s and the Chicago Tribune are reporting that Neumann Homes, the fourth largest home developer in the Chicago area, is about to file for bankruptcy protection.  They rank 59th nationally among the homebuilders. The company has already laid off most of its employees.

From Crain’s:

The “significant downturn in the Detroit, Chicago and Denver housing markets resulted in this situation,” President Kenneth Neumann said in the release.

Neumann, which has 15 subdivisions in the works in Illinois, said it is seeking funding from its lenders to finance the completion of homes already under construction. It also plans to ask the bankruptcy court to allow the refund of earnest money deposits to purchasers of homes not yet under construction, according to the release.

The company has lost more than $60 million in the Detroit market over the past two years, and home prices in some parts of the Chicago and Denver markets have fallen 10% to 25%.

“Even after the significant help we have received from our lenders this year, the company can no longer weather this storm,” Mr. Neumann said.

It should not be a surprise that the developers are now getting hit. Just this weekend in the Chicago area Pulte held a “monster sale” in honor of Halloween (an apt description as some are calling this the “nightmare” housing market) where they were offering reductions of $25,000 to $75,000 depending on the development. The smaller builders are competing with the big boys in the race to the bottom.

Question is, many custom home builders are also out there with finished product they can’t sell (with 1, 3 or 5 homes finished) – what will happen to them? How long will they hold on?

Stay tuned.

As I discussed in a prior post on 340 on the Park, which is in the midst of closings on the units, many are being listed for re-sale or for rent.

A tipster was kind enough to send me some data (at least the data that is currently being reported on the MLS) about closings in the building.

As of last week there have been 70 closings out of a total of 344 units.  (Remember, this is the data reported by Related, the developer, so sometimes it is delayed and there are more closings that have taken place than are reported.) In addition, each week there are closings planned so the number will continue to rise.

Out of the closings reported so far- there are only two or three re-sales.  That means that most of the flippers haven’t been successful at flipping anything yet.

This is despite the owners on the 340 on the Park owners forum insisting that numerous buyers have made $200,000 to $300,000 on their flips so far.

What does the data show?

Unit #1804: 2 bedroom, 2.5 baths

• Originally sold for $830,000
• Currently listed for $1.2 million
• This sale is “pending” so we don’t have the actual closing price yet

Unit #2201: 3 bedroom, 3.5 baths

• Originally closed for $1.489 million
• Now listed for $1.531 million
• Currently is “pending” so we don’t have the actual closing price yet

I also think that the earlier you could get your listing on the market, the better off you were in possibly making quite a bit of money flipping.  The buzz about the building is always the greatest right when the initial closings take place and people start moving in.  It will be no different with 340 on the Park.  Every month that goes by now, more units will come on the market and the buzz will lessen. 

Right now, there are about 40 units for sale or for rent with over 25 of those for sale.  If you were a buyer interested in, say, one of the one bedroom units, you already have a dozen to choose from.

And more will be coming on the market as closings continue.  In this housing market, with the upper bracket already getting slammed and inventory from other new construction buildings also coming on the market, there is simply too much competition for the $600,000 to $700,000 one bedroom condo.  There aren’t enough buyers at that price point for all of the product.

And while 340 on the Park is a nice building with beautiful views to the South (if you are on that side of the building)- every unit has the same exact finishes (there was no upgrade package) and some of those finishes aren’t what you’d find in a typical Chicago “luxury” building.  For instance the appliances are GE appliances (not subzero or wolf- which is what you would get in, say, 600 N. Fairbanks).

How long will the flippers hold onto their high prices until they start lowering to just get out of the unit?  We’ll have to see.  Many will probably just rent out the unit- meaning that 340 on the Park will have quite a few renters living amongst the owners.  The Heritage at 130 N. Garland also initially had quite a few renters (and still does).

We shall see over the winter.  2007-2008 is not 2005 when the easy re-sale money was virtually guaranteed.

What investors will get burned and in what buildings?

If anyone has any information about actual re-sales in this building (or others), I’d love to hear about it.  Let me know!  And thanks for the tipster who sent me the above information.

The Printers Row Loft Walk is a great selling strategy for loft owners to get their product seen by about a thousand people.  Did you fall in love with some of the lofts on the walk?  Some of them were on the market.  And in some buildings, there are other units that are for sale (that weren’t on the tour.)

One of the Loft Walk buildings was Trevi Square, at 1439 S. Michigan, built as a hospital in 1907 and converted in 1996 into 69 residential housing units.  From the loft walk brochure:

Constructed as a private hospital for Chicago’s wealthy residents along Indiana and Prairie Avenues, St. Luke’s interiors catered to high-end tastes and included high ceilings for summertime ventilation.

There are some unique layouts in the building and many of the units are duplexes. The first floor has 20 foot high ceilings. They also kept most of the brick walls.

Currently on the market:

Unit #503: 2 bedroom, 2 bath, 1320 square feet

• Currently listed for $344,900 plus $35,000 for parking
• 20 x 8 north facing balcony
• The pictures above are of #503

Units sell pretty quickly in the building.  Prudential Preferred has the listing.

This year’s loft walk tour in the South Loop only had 6 loft buildings represented (with numerous lofts in several of the buildings).  Only two of those was in Printers Row, which is where, in my opinion, the most authentic of the lofts in the South Loop are located.  Printers Row was converted first- and so the spaces were converted into authentic lofts for artists- with wide open spaces and no walls.

Such was the case with 727 S. Dearborn, otherwise known as the Donohue Annex, not to be confused with The Donohue, which is next door at 711 S.  Dearborn.  The Annex was an addition to the original Donohue building.  Added in 1913, it is a concrete building, unlike The Donohue next door which is timber. 

The neatest thing about the building was the old original elevator.  It is the kind where you pull the gate and you can see all the floors as you go up.  Because of its age,  only four people at a time were allowed on it.  But it was really cool.  I don’t recall seeing an old elevator like that in any other building in Chicago.

To get your furniture and new stainless steel appliances into the building, however, there is a service elevator at the back of the building which opens up directly into the units  (it was, after all, a printing building where they had to roll out the big printed rolls to be shipped nationwide from the nearby train station.)

Unit #611: 1 bedroom, 1 bath, 1500 square feet

• Currently listed for $424,900
• Washer/Dryer in the unit
• No parking with the building but rental parking available across the street or to purchase on S. Plymouth (across the street)
• No walls separate the bedroom from the living room

Bob Pfeiffer and Michael Loizzi at Coldwell Banker have the listing.

The Vetro, the new 31 story high rise in the South Loop at 611 S.  Wells (at Harrison) is about to start closings.  It has 233 units.

The building looks good from the street.  It looks a lot like its original renderings, with its glass dominated facade.  It will be a nice addition to the Printers Row area.

At least one re-sale has appeared already on Craigslist. 

21st Floor: 1 bedroom, 1 bath, 719 square feet

• Re-seller is asking $315,000 with upgrades and parking
• Claims that it is “at cost”
• Closing expected January/February 2008

What is the market for a $300,000 one bedroom in the South Loop?  (even if it’s new?)

You can almost get a two bedroom for the same price in the older buildings nearby (such as 701 S. Wells- Wells Street Tower.)

The building is not sold out.  The last number I saw was about 60% sold.

I don’t know how many units have actually now closed at 340 on the Park.  But it seems to be not even half of the building.  There are 67 floors and units on the 40th floors are scheduled to close in December.  Units on the 28th floor are currently on the MLS however.

So with maybe 30 floors closed so far, there are currently 49 units either for sale or for rent.

There are 344 units in the building.  Could it be possible that we will see about half of the building either for sale…again…or for rent?

Seems likely to me.

Originally, Related, the developer on the project, had a clause in the contract which prohibited buyers from selling within a year of closing but according to people who have already closed, posting on the 340 on the Park owners forum, Related is waiving that clause.  So flipping is pretty heated at the moment.

And people thought investors weren’t a large percentage of buyers in the Chicago market. 

Tsk, tsk.

Question is: will they be able to re-sell them?  The upper bracket, as I’ve reported, is slowing rapidly.  And with the flippers trying to make $150,000 to $200,000 per unit, could it be that the flippers are going to price themselves out of any chance of selling?

From my rough count, there are twelve 1 bedroom condos being flipped ranging in price from $499,000 to $689,000 (without the parking.)  They are around 1000 to 1300 square feet.  The cheaper units look north (into the Lakeshore East park).  The more expensive have the south view.  Some of them have corner windows that look directly into the Blue Cross Blue Shield building.

Already, on the 340 on the Park owners forum, there is discussion about the lights and computers being left on all night in the Blue Cross Building (which is literally right next door.)  I wonder how many buyers really gave serious thought to what it would be like to live right next to an office building (either day or night.)  340 on the Park has floor to ceiling windows and the Blue Cross building has a lot of glass as well.  So much for privacy.  Here is a picture of one of the one bedroom units and you can see that it looks directly into the office building.  It is Unit #406.  It’s listed for $620,000 and has both the livingroom and the bedroom looking directly into the office building.

In addition, Blue Cross has already announced and started construction on plans to add another couple dozen stories onto the top of their existing building (which was in the original plan for the building and has city approval.)  Many units that are higher up in the building will soon have any western views blocked (and have to watch construction workers for a few years.)

My point being: how many of these very expensive units will be successfully flipped at these prices?

The south units have great views, but at what price in a slowing housing market?

On the owners forum, posters are claiming that two or three units have been successfully flipped already (for profits of $200,000 to $300,000).  But I’m thinking those were a few of the units listed first- when the buzz for the building was still great and it seemed that the building was, for all intents and purposes, sold out.  Currently, I see that one of the one bedroom units with a large 300 square foot terrace on the second floor priced at $644,000 is under contract.

Now, with dozens of units available in some form (either for rent or for sale- some are likely both)- what is the urgency?  There isn’t any.

It will be interesting to see what happens in the next six months.  It’s likely that prices will come down.

Over a year ago, a developer was selling condo units in the Crilly Court complex, a historic group of buildings in Old Town that had been apartments for decades.  The buildings, totaling 90 units on Wells, Eugenie, St. Paul and Crilly Court, were gutted and the piping and windows replaced.  Every unit had a washer/dryer installed.  There were only about 8 parking spaces available, with all of them reserved for the largest three bedroom units. 

Even without the parking,  the 1 bedroom and 2 bedrooms sold out quickly even though the one bedroom units were small (from 650 to 720 square feet).  Mainly, it was the great location.  But the prices were also competitive for the neighborhood.

Closings finally started on the units in late spring and early summer.  Surprisingly, outside of two one bedroom condos on Crilly Court that were on the market several months ago (at least one of those was rented out), there were no other flips of units.  Given the number of investors in the market, this was surprising.  Why didn’t investors buy in Crilly Court?

Recently, one of the bigger two bedroom units finally came onto the market. 

1704 N. Wells, Unit #2: 2 bedrooms, 2 baths, den, 1507 square feet

• Currently listed for $489,900
• Previously sold in July 2007 for $460,160
• Gas fireplace
• Seller to pay 3 months of parking nearby
• Assessments around $300 a month

This seller will be lucky to breakeven at this price.  Wonder why they didn’t try and flip it for more?  Prices in the rest of Old Town would seem to support a list of over $500,000 but with the slower market, perhaps this seller just wants a quick sale.

Nancy Gaspadarek at Habitat has the listing.