Steals and Deals: A One Bedroom Hyde Park Co-Op for $34,400
Yes, the title of this post is real.
The unit in question is in foreclosure but is in one of the vintage high-rises along Lake Michigan in Hyde Park/Kenwood.
5000 S. East End Avenue was built in 1927-28. The building was constructed in the “tudor gothic” style. It is 28 stories tall and originally had 97 apartments, including duplexes on the 26th and 27th floors.
From Chicago Apartments, A Century of Lakefront Luxury:
At the time of its construction, the owners declared it Chicago’s tallest apartment house. For a couple of decades it enjoyed an unobstructed view east to the lake. Sales to prominent businessmen and professionals were brisk in 1928 and 1929. Built as a cooperative, 5000 East End remains one today.
Like many of the grand co-op buildings built in the go-go 1920s, which was Chicago’s last great building boom until this decade, it fell on hard times but rebounded.
The building is rather unique in the world of vintage co-ops because it appears to have parking available in a lot next door and washer/dryers in some of the units (not sure if all of them are allowed to have it.)
I don’t have any pictures of the interiors of the 1 bedroom. I wish!
Unit #11B: 1 bedroom, 1.5 baths, no square footage, but it’s a big unit with a full-sized dining room- probably around 1000 square feet
- Sold in June 2000 for $67,000
- Sold in April 2002 for $50,000
- Currently listed for $34,400
- Assessments are $1515 a month (includes everything, including taxes)
- Chicago Realty Partners has the listing
From the listing:
VINTAGE HIGH RISE CO-OP WITH HARDWOOD THROUGHOUT AND TONS OF CABINETRY. INCLUDES SPECIAL FOR MASONRY WORK IS $ 275. PROPERTY IS OFFERED ‘AS IS’ WITH ALL FAULTS AND NO POST- CLOSING REPAIRS OR PAYMENTS WILL BE MADE FOR ANY REASON; SOLD BY ELECTRONIC AUCTION; CALL LISTING BROKER FOR INFORMATION REGARDING EARNEST MONEY REQUIREMENTS.
There is a second unit where the owner is attempting a short-sale.
Unit #6C: 4 bedrooms, 3 baths, 1 car parking, w/d in the unit, 2200 square feet
- Sold in June 2002 for $285,000
- Sold in July 2005 for $349,000
- Currently listed for $215,000
- Assessment of $2130 a month
- Rubloff has the listing
The listing states:
SHORT SALE!! OWNERS PD $100K ABOVE ASKING. 2200 SF UPDATED 4 BEDS/3BTH VINT. HUGE FORMAL LIV & DIN RMS; GRAND FOYER;FAB KIT;HDWD FLRS THRUOUT;FAB KIT; NEW ELEC;C/A;W/D; PET FRIENDLY. WRAP AROUND CITY & LAKE VIEWS; 4 EXPOSURE; SEP STORAGE; SECURE GATED PKG; STEPS TO BIKE PATH, PARK, LAKE, CTA, U OF C BUS, TRAIN & GOLF COURSE. ASSMS COVER TAXES, HEAT, ETC. BLDG HAS A 6.2 MIL CAPITAL EXPENDITURE FOR MAS…
Are either of these two units a “deal”?
In 2006, Unit #5D, a 2/2 with about 1600 square feet sold for $80,000.
In 2001, Unit #17B, the same one bedroom layout at #11B, sold for $47,500.
Take a look at the monthly assessments at the time of the prior sales for #11-B:
Sold in June 2000 for $67,000 with $885/month assessment
Sold in April 2002 for $50,000 with $947/month assessment
Currently listed for $34,400 with $1,515/month assessment
I think it might take a payment to a buyer to get them to take over the proprietary lease for this unit.
#6-C looks about the same:
Sold in June 2002 for $285,000 with $1,565/month assessment
Sold in July 2005 for $349,000 with $1,878/month assessment
Currently listed for $215,000 with $2,130/month assessment
No, this is not a good deal either but it is a stunning example of an illiquid, depreciating “asset.”
They probably have serious exterior wall issues with that property. Drives up the assessments. Generally, I think co-ops are pretty bad news. I agree, they are going to have to pay to get that place off of thier hands.
They’ve just done exterior work on the whole building. As the listing for 11-B noted, $275 of the assessment is for the masonry work. The rest of the increase makes sense as increased taxes, utility costs, doorman salaries and probably some reserve accumulation to avoid such a large special in the future.
If the ratio for the special is basically the same as the ratio of the overall assessments from 2002, then 6-C is paying $450 for the masonry work. $6.2mm/97 apartments is $64k–even adjusting for how huge the penthouses are (and they are HUGE), you’d still be looking at 10+ years to pay off the special.
But even with all of that, the one-br is a better cash flow deal than paying $200k for a comparable condo and the 4br better than paying $470 for a comp, since utilities, taxes and association dues are all rolled in.
Has anyone ever heard of a coop or a condo association deciding that a building is in such disrepair, that it is not worth the special assessments to fix it, and everyone would be better off if they just sold the building as a tear down?
Anon, a better cash flow deal? What about the hassle of board approval, that is if they allow investor purchases?
Besides, the $1515/mo assessment alone is more than neighborhood rents for a 1BR. It is even too high w/o the long-term “special.”
Kenworthey, no I haven’t heard of that. There would always be the problem of the banks holding the unit notes stepping in and paying the special and just foreclosing. There have been coops which have gone broke in NY and unable to pay the underlying coop mortgage, thus resulting in nothing for the “shareholders” except their own mortgage obligations on proprietary leases that are no longer valid.
Nah, G, I wasn’t talking about as an investment property–I was being sloppy with terminology. Lower monthly nut as a primary residence.
And, yes, it’s clearly more expensive than renting.
I agree about it STILL being more expensive than renting (especially in Hyde Park.) It’s too bad because these vintage buildings from that era have great bones. They literally were building “homes” in the sky- not simply apartments or square boxes.
For that bigger 4 bedroom unit, because of the interesting layout, it literally has exposures on four sides of the unit (at some point). Where do you see that in today’s condo towers unless you buy a full-floor unit? You don’t.
“It’s too bad [that it’s more expensive than renting] because these vintage buildings from that era have great bones.”
Well, if you’re going to live in it, it isn’t just about paying the same or less than rent–at least if you’re pretty certain that you won’t be moving for a few years. There is an intangible value to not being a tenant–some people put a very low value on it, some a very high value.
Assuming that you want to own, these are better than a condo that would have the same monthly cost. The risk is that there’s another large special coming for something else–e.g. elevators, boiler, whatever. You need to do your diligence, but if you want to own an apartment in Hyde Park, you could certainly do much, much worse.
Minor correction to the original post, there was a major residential building boom in the 1960s as well.
Even for a vintage co-op, the assessments here are high. This place is no bargain. A one-bed at the Edgewater Beach is a better deal, since at least they have corrected 40 years worth of deferred maintenance, though at horrific cost.
It would behoove the “buyer” of this permanent high (and forever increasing)rental to look very carefully at what s/he is “buying”. Something is extremely wrong with even an old building when the assessments are so high. Given the lack of transparency typical of co-op governance,this place conceals many secrets you really need to uncover.
Best to stay away until this building gets its act together. There are too many beautiful 20s vintage condos in Hyde Park, Edgewater, Lakeview, and other neighborhoods, that are in better condition and operated more intelligently and economically to accept this.
There was another listing for a 35k cooperative in Hyde Park on craigslist- I don’t think it was 5000 since they insisted there was a “garage space” and 5000 only has a surface lot (albeit with a deeded space).