Stresses in Park Tower: 5415 N. Sheridan in Edgewater
The Park Tower, at 5415 N. Sheridan, is a massive condominium building built in 1972 with uninterrupted views of Lake Michigan. It is located across from Edgewater Beach.
Recently there have been a string of foreclosures and short sales in the building. However, it’s a huge building.
Current stats (out of around 730 units):
- 38 for sale
- 4 for rent (probably more if you look on Craigslist)
There is leased parking available in the building. Washer/dryers are not allowed in the units.
The building has indoor AND outdoor rooftop pools.
This 2-bedroom unit, Unit #3411, is being sold “as-is”.
Major Enterprises has the listing. See more pictures and a virtual tour here.
Unit #3411: 2 bedrooms, 2 baths, 1250 square feet
- Sold in June 2000 for $225,000
- Sold in June 2001 for $280,000
- Currently listed for $279,999
- Lis pendens filed in November 2007
- Assessments of $589 a month
- Taxes of $3,771
- Parking is leased
- Central air
This 1-bedroom unit is already bank-owned.
Re/Max Signature has the listing. See more pictures here.
Unit #615: 1 bedroom, 1 bath
- Sold in March 1999 for $65,000
- Sold in October 2003 for $145,000
- Bank-owned
- Currently listed for $114,900
- Assessments of $370 a month
- Taxes of $2,256
- Parking is leased
- Central air
I have been watching this building for awhile. I think a 2br 2 ba bankowned units that needed a kithcen went for uner 190K. Nice pool, I wish they allowed in-unit laundry. And the assements are too high. You would have to get them pretty cheap to make it worth renting out.
Sorry about the type-os
Wow, these some of the few listings I’ve seen that are not overpriced. If I could live that far north I’d give it some thought.
I lived in Park Tower from 2000 to 2004…. At that time this was a very well run building… The board managed to rebuild the entire elevator system (eight elevators in all) spending more than 5 million without a single special assessment (because they planned for it for several years leading up to it).
I also remember the building being inpeccably maintained…. a scratch in the paint in the hallway was fixed within 24 hours of notifying the office… The very best units are above the 40th floor in the 01 tier. They have unobstructed views of the lake and city looking south, with absolute privacy.
This is a great building. $114K for a one bed sounds, offhand, like a good deal until I consider the assessments- still impossible for a rental to cash-flow at this price.
Are rentals even allowed?
This price makes other one beds in older, higher-main, amenity-less buildings seem atrocious compared, though. Prices in this neck of the woods still have a long way to fall.
The carnage in the financials this week might help. It’s becoming more evident every day that there are hundreds of billions in home loans that will never be paid back, and that the $900 billion we taxpayers have spent on the bailout won’t be adequate.
And God knows we aren’t going to be able to afford what we perhaps thought we could three years ago. It’s another world now, and one more familiar- you will have to prove you can pay for what you’re buying. Lots of folks will find that very alien.
No w/d in a unit like this is killer. Unless they include laundry service to your door in the assessment?
I would guess with 50+ floors and 700+ units, they’ve got a few laundry rooms throughout the building.
I’m sure they do, but who wants to do their own laundry outside of their home? In my mind that is one of the important advantages of owning vs renting 🙂
“the $900 billion we taxpayers have spent”
C’mon Laura, that’s not money “spent” –yet, at least. Most of that is loans and most of that will be repaid. And even at that, several hundred billion is not out the door yet.
How do you know that those so-called loans will be repaid?
I really don’t believe that they will. I believe these concerns are buried so deeply in so many layers of over-leveraged, tricky instruments that are worth half their face amount, if even, that the “loans” we are handing them now will be like a drop of water on the sidewalk in July. They will be needing still more in very short order. And more. And more.
I mean, AIG is not comparable to Chrysler. Chrysler at least made tangible goods you could put a value on. These people, on the other hand, are offering collateral that is tricked to collapse. You can’t even value the stuff right now.
The US government will surely make money on the orderly wind down of AIG. AIG has businesses that make a profit. They also have a ton of assets. Even with their risky mortgage holdings set aside I’d bet the government doesn’t lose much or makes money..
The real scandal is the bailout of FNM & FRE. The taxpayers are surely going to take a HUUUUUUUGE hit on that one. Starting estimates are 300B…the sky is the limit.
I can confirm that there is a single laundry room in the basement, accessible by the service elevator, and it has 40 washers and 40 dryers… I always did several loads at a time… fairly easy really… Many residents had cleaning services that did their laundry for them.
Bob, if AIG has “tons of assets” that are profitable, AND if it “has bussinesses that are profitable”, what does it need a loan of $85MM dollars for?
In any case, they could easily meet their shortfall by asking their CEO and top officers to give back half apiece of their 2007 compensation. Or maybe 75% of it.
I’m not buying any of the excuses put forth. If they are in any sense profitable, they do not need this loan. And if they are this darn needy, than there is more trouble coming, and they’re going to sink no matter what.
This whole debacle is looking to be a tremendous net loss to the taxpayers, especially when you consider that the FDIC has only $50 billion to ensure depositors money for all our banks, with many more bank failures in the offing. It’s known that the FDIC will need extra funding to meet the coming need.
Laura
You don’t seem to have a good understanding of what exactly AIG does. What does the FDIC have to do with AIG? Do you understand about the ratings and how it effects the companies ability to raise capital? It seems you get all your info from CNN and the 5 o’clock news. Try to read up more in depth on these topics instead of listening to sound bites.
Well, Laura is right in that we are getting ripped off somehow.
there is a really good/easy to understand explanation of the current financial upheaval posted on the freakonomics blog . i’d post the link but i can’t figure out how. but if you go there and scroll down it was posted at 10:04 am yesterday by steve levitt.
The consensus seems to be that the government will probably profit from the AIG bailout just like it profited from the Chrysler bailout. If AIG’s assets are undervalued because no one else is willing to buy them or is able to buy them and the US Government is the only one with the funds to do so then the government becomes a vulture fund and picks up assets at pennies on the dollar. There are people who make lots of money doing this sort of thing.
that part makes me nervous. It’s not like the fed/treas are experts in valuing distressed assets. if they turn a profit on this it will likely be pure luck.
I will say that this new initiative to buy up the bad mortgages from banks is not likely to turn a profit for the government unless they have a really clever way to price them. I’d like to see a market mechanism used.
“I will say that this new initiative to buy up the bad mortgages from banks is not likely to turn a profit for the government unless they have a really clever way to price them. I’d like to see a market mechanism used.”
HAHAHAHA!! The bad mortgage “New RTC” is going to end up with the feds owning TONS of homes which will eventually be available for Section 8 housing. The speculation that the exurbs and certain condo towers will be the new slums will be accelarated by this. Get ready for a crony-crazy auction of the repo’s property long, long before the housing market recovers, leading to huge profits for many connected people across the country–which will take place whether it’s Obama or McCain elected, the only change will be the identity of the new slumlords.
Laura: “Bob, if AIG has “tons of assets” that are profitable, AND if it “has bussinesses that are profitable”, what does it need a loan of $85MM dollars for?”
Jeebus, you don’t have any understanding of what AIG’s problem is OR why it was critical to bail out the greedy bastards. AIG was downgraded and needed $20B+ in new capital on Wednesday or it was filing ch 11, and likely needs the other $65B to provided adequate collateral over the next 90-180 days to cover CDS obligations created by said downgrade (and any future downgrades). The non-CDS portions of the AIG conglomerate range from basically healthy to quite profitable. If AIG had defaulted on its CDS obligations, it is likely that there would have been cascading defaults affecting nearly every outstanding corporate bond in the world–yes, AIG was THAT big a player in the CDS market.
AIG is a valuable, profitable company. They fell on hard times briefly due to the market fluctuations, and needed a short, band-aid loan until they have more cash-flow. Essentially, the assets are there, but they needed a loan for a short while. Good move on the gov.
Like Gary and many others said, the buyout of bad mortgages will be a sink hole. Very bad move on the gov.
Anyway, the assessments do seem just a bit high, but its not outrageous. I think this place is great. If I had the money, I’d buy this place.
I understand that AIG has layers and layers of grossly overvalued assets that they acquired at steeply inflated prices, which have now been downgraded as they have turned out to be worth far less than what AIG paid for them.
In other words, AIG made many, many very bad bets, HIGHLY LEVERAGED bets, and they are now unwinding (thus the cash flow problems), and if they were marked to market today, and liquidated, AIG would not be profitable.
AIG is yet another badly managed company that is being rescued by a high-risk government loan.
And, please, I’m in finance, so I know the purpose of AIG (having pushed many of their products in the past) and I know the purpose of the FDIC, but it is a mistake to say that AIG’s problems and the current underfunding of the FDIC are not related. They are having their seperate problems for the same reason- because almost every investor shovelled massive amounts of money into CDOs stuffed with horrid mortgages, and into derivatives based on them. The whole thing was made possible by outrageously lax lending standards, as well as the assumption, by no means unfounded, by our financiers, that they could run this massive Ponzi scheme and rake in billions in fees not possible in a sane financial system, safe in the knowledge that they would get the bailout they are getting now once the whole thing started to unravel as it was bound to do sometime.
What percentage of mortgages are bad?
Laura: You’re still missing the point that AIG holds little in the way of CDOs or MBS for its own account; they are a swap counterparty to many, many, many holders of such instruments, tho. The downgrade meant that they needed to post cash collateral to backstop those swaps; the AIG entity that was party to the swaps didn’t have the capital and couldn’t get it. If they defaulted on their swaps, they would have (1) filed bankruptcy and (2) created a cascade of defaults resulting in many other financial firms filing bankruptcy. If you’re worried about FDIC solvency (reasonable), then the AIG bailout can be seen as a contribution to that solvency.
Jason: Moody’s just raised their loss estiamtes for 2006 and 2007 vintage RMBS. From the Financial Times (9/19/08):
“In its latest update on losses expected on mortgages made in 2006, Moody’s said it had increased its projections for cumulative losses to an average of 22 per cent. The losses are expected to increase in every quarter, averaging 17 per cent for the first quarter of 2006 and 26 per cent for the fourth quarter of that year.
The previous forecasts of estimated losses, made in January, were for a range of between 14 and 18 per cent.
…
For securities backed by mortgages made in 2007, loss assumptions are “roughly one-third more severe than for 2006”.”
Hey folks:
Can we get back to discussing this building?
My wife and I are looking for a weekend place in Chicago. We’re from Madison WI. I especially like the pictures of unit 3411. Is the building in good shape? Is it dog-friendly? We have a large greyhound. Will that be a problem? Are there any grassy areas to walk him nearby. We are good citizens, we’re from Madison after all, so we clean up. Is there any place you can walk to from the building? Theaters? Restaurants? Shopping?
We are also considering a place in the Loop in the (300,00+/- reange, because it is nearer the action. What do you all think?
Thanks.
Steve
I lived at Park Tower for ten years. The assessments are on the high side because it’s been PT policy for 20 years that I know of to avoid specials. Curtain-wall buildings are high maintenance, old elevators and risers need replacing, an indoor pool needs to be kept up etc etc—take your choice, it’s either going to be higher monthly assessments or specials. BTW the views are spectacular. In answer to somebody’s question, yes, rentals are allowed—usually the units are about 40% rentals.
To Steve: Good news, building sits in lakeside park land. Bad news, no dogs unless they’ve changed the policy, which I doubt. Walking: not really. There are a few restaurants within a couple of blocks and you can walk about 8 blocks to the Andersonville strip on North Clark but if you want urban bustle you’d probably be happier downtown. Shopping—Dominicks, otherwise nada. But, to be fair, the 147 express bus gets downtown off-rush hour in ten minutes, and you are right on top of Foster Avenue Beach and Osterman Beach. Crime situation in neighborhood isn’t wonderful, in fact two people were shot three hours ago on N Sheridan just below Foster, google for details.
There are numerous restaurants within blocks of Park Tower – i.e. Wing Hoe, Tedino’s, Jin, Pastuer, Mei Shung, Francesca’s, Little Mexican Cafe, Little India, Nookies, The Edgewater Beach Cafe, Burke’s Public House, and more are opening soon on Broadway and Bryn Mawr. Clark Street/Andersonville is a short walk, easy walk – especially in warm weather months, and now has more restaurants than I can list here. In fact, it’s become a popular dining destination for people living all over the City – and suburbs, too.
BTW: Park Tower does allow combined units (typically two bedroom/studio combos) to have in-unit washer/dryers.
Another fatty who cant walk more than 2 blocks.
So for those of us that still need to have a car in order to get from/to work, what is the parking, loading /unloading, guest parking situation like?
In 1997, they were selling 2/2 for 100.000$.
Now, they are asking 200.000$.
Building, 700 units with 400-500$ average per unit ass. monthly or 300.000 a month for what???
No sense at all.
“…what is the parking, loading /unloading, guest parking situation like?”
There is a driveway to the front door to load and unload.
Indoor heated valet parking costs $110/month to rent.
Also, there is a small grocery store in the building as well as a dry cleaner.
The management company is the most professional and responsive one I’ve ever dealt with in any country.
Forgot to mention, yes, I think the assessments are high too.
However you get a lot for your money.
Heating, A/C and cable TV is included.
24 hour security is included.
The building also has a maintenance staff which will perform minor repairs in your unit for very reasonable prices.
They have installed a J pipe for me in the kitchen and replaced the wax ring in the toilet.
As for restaurants, it’s also very close to Argyle Street.
Proximity to the beach and restaurants were the top 2 reasons my tenant chose this building.
This sounds like a great building. Thanks for updating this old conversation, everyone.