The Grown-Up Loft: A 2-Bedroom at 758 N. Larrabee in River North
This 2-bedroom concrete loft in One River Place at 758 N. Larrabee in River North just came on the market.
This is the old Montgomery Ward building which was converted into lofts in 2001-2002.
The listing says it has had a “renovation.”
It has a new gourmet kitchen with custom cabinets, a double oven, a 5-burner cook top and a wine fridge along with stainless steel appliances.
There’s new granite around the fireplace.
The master bath appears to have been renovated as well.
The corner unit has 15-foot ceilings and windows that stretch across the length of the unit with south and west views of the Chicago River.
It has the other features that buyers look for including central air, washer/dryer in the unit and parking is available for $30,000 extra.
At 1800 square feet, it is larger than your average “starter” 2-bedroom loft.
Is this the kind of loft you buy to return to the city after selling that house in the suburbs?
Melissa Siegal at @Properties has the listing. See the pictures here.
Unit #301: 2 bedrooms, 2 baths, 1800 square feet
- Sold in May 2002 for $622,000
- Sold in August 2012 for $520,000 (included the parking)
- Currently listed for $750,000 (parking $30,000 extra)
- Assessments of $954 a month (includes cable, doorman, internet, exercise room)
- Taxes of $9132
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 16×14
- Bedroom #2: 15×11
Sorry- I had a post all ready to go today but I messed on the time stamp. ha!
Very nice place, I would live there in a heart beat! Like the layout, the views and the location. HOA dues are quite reasonable also.
This seems like it’s once of the nicer 2/2s in the building. I helped a friend move into a smaller 2/2 shortly after the building was converted and I was not impressed. The unit seemed like it was 12 feet wide, like a double wide trailer home. The kitchen was more like an efficiency and the 2nd bedroom didn’t have a window or a full wall. It was in the high $300’s or low $400’s at the time too. That being said, 1,800 feet (which I’m sure includes the deck and hallway space) is decently sized and the 40′ x 14′ main area with an open floor plan rivals the open floor plan of my renovated little ranch house in the burbs. $417 a sq ft is probably understated and it’s probably closer to $500 if you subtract out the deck from the sq footage. I can’t tell you for the life of me if that’s too high, but, if this were NYC it would be over $2M or more. But this aint new york, this is just off the industrial area around Chicago ave, so who knows
“This seems like it’s once of the nicer 2/2s in the building. I helped a friend move into a smaller 2/2 shortly after the building was converted and I was not impressed. ”
There are a variety of floor plans in this building. Yes, some of them are small and “affordable.”
This was converted in 2001-2002 before the “luxury” boom when everyone was putting in the top of the line appliance and cabinet package. It was never meant to be luxury lofts. Also, it’s location wasn’t so great in 2001. That was before Domain was developed across the street and before Groupon came in. A lot has changed in the neighborhood.
Many of the lofts in this building still have the original features. It makes a difference.
Here are the pictures of what this loft looked before the renovation.
https://www.redfin.com/IL/Chicago/758-N-Larrabee-St-60654/unit-301/home/12697117/mred-08080855
This space is better than most 2 bedrooms. Loft buildings often have a wide range of unit sizes and shapes. Sadly many are long and skinny with only 1 larege winding. But this building and the 900 N. Kingsbury building, also a former Montgomery Ward building,do have some pretty amzing lofts with spectacular views:
https://www.redfin.com/IL/Chicago/900-N-Kingsbury-St-60610/unit-950/home/12682049
https://www.redfin.com/IL/Chicago/900-N-Kingsbury-St-60610/unit-746/home/12687118
900 N Kingsbury is Domain, by the way. It is just north of Chicago Avenue.
Yeah, I’ve seen the area change over the years, can’t say I frequent the area but I drive through there occasionally. There’s a lot of money up in that area cause the tech and options stuff. or so i hear.
“Sadly many are long and skinny with only 1 large window.”
It depends on when they were converted and the type of building, obviously.
The older the building, the better the layout. The developers in the 1990s were actually concerned with, gasp, natural light and making sure the bedrooms had a window. They sacrificed the interior space for that (and that also meant, actually developing LESS units in the building.)
Later on, the developers started maximizing the number of units by having the units stretch inward in the building as you describe- with a window in the living room and the “bedroom” in the interior with the 3/4th wall and no window.
Also- many of these buildings are old warehouses and are quite wide. What do you do with all the space in the center of the building? Some of the old conversions actually had huge storage rooms built in the interior (basically like another bedroom) which was accessible off the building’s hallway.
A tip for loft buyers: if you want more light and a better layout, buy in the buildings that were converted in the 1980s and 1990s.
Old warehouses were also a lot cheaper in the 80’s and 90’s so developers could afford to give more space to each unit. By the time the 2000’s hit, two flats in Rogers Park were selling for $500k, so I can only imagine what an old warehouse for conversion would sell for, with multiple bidders and banks falling all over themselves to finance the deal with 1st, 2nd and 3rd mortgages.
Yes the old warehouses were much cheaper because the neighborhood was sooo shitty, so they HAD to make attractive units or else nobody would have bought them.
Those Domain lofts are interesting and beautiful, isn’t the building mixed income? Kinda strange to have such rich and poor living in the same building.
Nice place but I hate that kitchen island configuration. Impractical for informal entertaining. What’s the purpose of those table height seats when there’s a huge dining table a few feet away. It really should have an overhang with several stools.
Lofts before they got commercialized are way better than the soft loft conversions that sprung up in the late 90s, early 2000s. I’ve seen loft developments from the 80s and early 90s where practically every unit is different and all of them make use of great light, open space, and retain many of the old features of the warehouse/building such as bank vault doors, elevators, large doors, etc.
Nice space and decent layout however I feel like they tried too hard to “Barringtonize” or “Northbrookish” it up. For an in-town loft in that area the finishes just do not really fit the space.
the finishes are an insult to both barrington and northbrook. it’s more like plainfield or orland park.
Agree with JP3 – finishes way too suburban and bland. But that’s probably because a baby boomer couple will end up buying this when they “downsize” from whatever affluent suburban SFH. They will be in for a surprise though if, god forbid, they ever have to experience the transience when walking east on the north-street side of Chicago avenue. Any word on if/when those Cabrini rowhouses will be “phased out” or is Burnett still fighting for those?
Definitely prefer Domain lofts to these, they just seem to have more character, and cooler/bigger windows too. (This specific property though is an exception). Domain location is quieter since it’s not right off Chicago ave. Only downside is, during 9-5 weekdays, you have to walk by the Groupon douche-cloud of smug and tobacco smoke where Larabbee & Kingsbury intersect.
Sonies – I have relatives that live in Domain and a small portion of it, is indeed, allocated to low income/section 8. You would never know or feel it though; perhaps they’re contained to a single floor.
” You would never know or feel it though; perhaps they’re contained to a single floor.”
Hopefully the servant’s quarters in the basement.
“Sonies – I have relatives that live in Domain and a small portion of it, is indeed, allocated to low income/section 8. You would never know or feel it though; perhaps they’re contained to a single floor.”
No the building is about 8% owned by a nonprofit (not CHA) which subsidizes tenants in 1 bedroom units throughout. This program is for low income individuals (most of them are elderly) and is not run directly by CHA. There is good onsite management and there have been no issues with these tenants. It’s the trust fund babies that cause the problems.
If the RE Taxes go up to $12K, then with taxes and assessments it costs $2,000 per month. Most of the unit’s windows face the building to to south, except for the only corner (swc) by the TV. The master bed has its window shades down because it stares directly into another unit. The west window in bedroom #2 is tiny and offers no “view”. Maybe Chicago will reach prices like NYC or LA/SF at some point. I don’t think this is worth $700K and $2,000 per month REtax/expenses.
PS Pic 8 shows what the balcony view really is.
The area surrounding Cabrini is rapidly gentrifying. A luxury mid rise apartment building just opened at Franklin and Chesnut. A 30 story luxury apartment building is breaking ground at Orleans and Chesnut. A 25 story luxury apartment building is waiting for financing at Sedgewick and Chicago (currently an empty lot). Just today, a 30 story luxury apartment high rise was approved by the Chicago Plan Commission at Cleveland and Chicago. A mid rise luxury condo project is planned across the street from the Montgomery. Give this stretch (from the river east towards Franklin) of Chicago Avenue 5 years and it will be completely cleaned up.
“Give this stretch (from the river east towards Franklin) of Chicago Avenue 5 years and it will be completely cleaned up.”
You know something you aren’t sharing about the Cabrini townhomes?
Can anyone please explain to why prices for apartment buildings two to four unit buildings is so irrationally high? Here is an example: http://www.realtor.com/realestateandhomes-detail/3744-N-Spaulding-Ave_Chicago_IL_60618_M85262-91858?row=1
They are asking for 350K and it needs repair. Even if it was completely rehabbed and the price was 350K, the price is outrageously high. This same sort of madness can apply to the entire north side of Chicago. I can not find any sort of deals for two to four unit buildings.
Seems overpriced and bland / outdated.
“This same sort of madness can apply to the entire north side of Chicago. I can not find any sort of deals for two to four unit buildings.”
Nimesh, did you just move here? Because the multi-unit buildings have been overpriced like that for the last 3 or 4 years now. The prices don’t match the fundamentals anymore (and haven’t for a long time.) Some landlords can’t even get enough rent to cover the mortgage.
But real estate only goes up- so what does it matter?
“I don’t think this is worth $700K and $2,000 per month REtax/expenses.”
How is this $2000 a month again? Just the mortgage alone is $2000 and then assessments another $900 and taxes another bunch. It’s closer to $3500 or $4000 a month.
By the way- this would probably also rent for around $4000 a month.
“No the building is about 8% owned by a nonprofit (not CHA) which subsidizes tenants in 1 bedroom units throughout. This program is for low income individuals (most of them are elderly) and is not run directly by CHA.”
Domain has always had this program. It was discussed when you went to look at the models back in the day. 10+ years on, if there were issues with this, you would have heard about them (and they’d be well known in the building.)
“Nice space and decent layout however I feel like they tried too hard to “Barringtonize” or “Northbrookish” it up. For an in-town loft in that area the finishes just do not really fit the space.”
You think these finishes look “Northbrookish”? You ain’t seen nothing. You clearly haven’t been looking at River North lofts lately. I’ll have to do some posts on what’s really going on out there.
You have to appeal to your possible buyers right? And the buyer isn’t the 20-something at this price point. It’s the 50-something.
Check out this loft at 333 w hubbard. It’s already under contract. What do you think of those cabinets?
http://www.coldwellbankeronline.com/ID/4031445
“I’ve seen loft developments from the 80s and early 90s where practically every unit is different and all of them make use of great light, open space, and retain many of the old features of the warehouse/building such as bank vault doors, elevators, large doors, etc.”
Right. This is before condos became hot. Most were converted into apartments first- and then condos. So the condo developer just kept the same floor plans as the apartment layouts. And the city in the 1980s and early 1990s was VERY different where most of these buildings were located than it is now. Most people wouldn’t have been caught dead living in the west loop except in a cheap loft apartment. So they didn’t cram a ton of units into as little space as possible.
The “soft loft” condos are a different animal. “Soft loft” refers to buildings that were built to have some loft features (higher ceilings and exposed airducts) but were never originally factories or have other original features. Most didn’t even have exposed brick or any of that. They kept the ceilings unpainted concrete and called them lofts.
That would be like 635 N. Franklin in River North, as one example. They only started doing this later in the cycle when the loft buildings were pretty much exhausted in all the conversions (i.e. there were none left) and lofts were still a hot “type” of property that young buyers wanted to buy.
Lofts have seemingly gone out of style now. And a lot of the older conversions now have old finishes- so buyers aren’t exactly into that either which gives lofts a bad name.
“Old warehouses were also a lot cheaper in the 80’s and 90’s so developers could afford to give more space to each unit.”
Don’t forget- the older lofts were mostly apartments. That’s how Loftminium World came on the market in 2000-2001. It was a bunch of buildings in the west loop and one in the south loop (on Wabash.) You could buy the unit “as-is” (as it was as a rental) or you could buy the “upgrade” package.
That was an Invesco conversion. That’s when lofts were super hot.
They bought all of the buildings from that big landlord at the time- I want to say Annie’s Properties- who had been buying them up in the 1980s. NO ONE wanted to live west of the highway in the 1980s. Even with Oprah over there. You could rent them out- yes. But those were NOT condos.
A few buildings in Printers Row went condo early- but it was rare. I think the Donohue in Printers Row was the first loft conversion in the city and it was the late 1980s. If someone knows more- please fill us in.
“How is this $2000 a month again?”
Um, if you pay cash for the purchase price. Hence “$700k and $2,000 per month REtax/expenses”
Sabrina: No chance this rents for $4000 per month. Really?
“Some landlords can’t even get enough rent to cover the mortgage.”
This has been the case for 20 years now. 2,3,4 flats haven’t sold on a cap rate basis for at least 20 years in the prime GZ areas. Around year 2000, novice investors were feeding $500 per month negatives after RE taxes, debt service. That was a loss of $6000 per year, but because the building was “appreciating” by $30K per year, they thought they were making money. Until the whole scheme stopped. These investors would have been better off buying EQR, Zell’s apartment REIT which paid a positive dividend and did actually increase in value. Plus, it offered the liquidity of being able to sell every day on the NYSE, and no landlord headaches and tenant phone calls, etc.
“Northbrookish”
The thing that makes the cabinets look suburban is the stupid little crown molding on top. It wrecks the European-line horizontalism, and puts the suburban feel into it. Espresso is still in? Look like white and walnut (not cherry) are the newer choices.
“2,3,4 flats haven’t sold on a cap rate basis for at least 20 years in the prime GZ areas.”
No doubt.
But the 2-flat (illegal 3) that Nimesh asked about ain’t prime GZ. And $349 today is a helluva lot better than $320 in ’02–that area is a *lot* nicer now than then, and rents are better too. Ignoring the (substantial) maintenance issues, that place is around a 6.5 cap with only 2 units.
What slays me still is the teardown quality rentals in sub-prime Logan that sold for $500k+ in 06/07–4 cap (ie, Prime *minus* 300++) rentals that needed to be replaced by $900k+ homes to make *any* money.
Ahhhhh……I see not too many people here are actually real estate investors. Yes, the property is priced insanely for the location, but as we discussed in an earlier thread, that’s the way REOs are priced these days.
Secondly, you forget depreciation. The owner of this property can deduct $12,727 off his taxable income each year for 27 years. That’s not including the depreciation he can depreciate for the necessary repairs and improvements. If the investor is in a high enough tax bracket, the depreciation may offset the net loss of rent AND some incidental repairs that come up. And after 30 years, the investor owns the building, and can provide for a nice retirement. and as long as the real estate taxes increase slower than the monthly rent, then the investor will probably eventually make a profit on the rents.
In case you haven’t noticed, most multiunits in chicago are dumps precisely because the investor bought the property many years ago, made no improvements, ran through all the available depreciation, and then sells it for a tidy tidy profit (I know the tax basis has been reduced but if you’re in a lower income bracket being older and retired it’s a win win again). And some new person comes along and buys the property for $300k+ to start the entire process over again.
“But the 2-flat (illegal 3) that Nimesh asked about ain’t prime GZ. And $349 today is a helluva lot better than $320 in ’02–that area is a *lot* nicer now than then, and rents are better too. Ignoring the (substantial) maintenance issues, that place is around a 6.5 cap with only 2 units.”
I’m not sure it’s 6.5, but it’s definitely not a bad cap rate (ignoring the maintenance again).
This building could easily clear its mortgage-taxes-insurance, even with, say, 40k of work. 20% down on 325k(I figure some discount)+40k, and you’re looking at upfront of 105k and fixed monthly of ~1,700. Your apartments could clear 2,600 a month, conservatively. Factor in expenses and that’s a healthy, if not great, ~7-9% cash-on-cash + equity.
I wouldn’t buy it, but I wouldn’t call it irrationally high. In fact, Chicago really has pretty excellent cap rates compared to competitor cities, especially in 2-4 flats, where funds and institutional investors tend not to play.
Not sure what kind of deal you’re looking for Nimesh.
“I’m not sure it’s 6.5, but it’s definitely not a bad cap rate”
Simple gross (after RE Tax) rate, using not-aggressive rents ($1,150/unit/mo), based on asking rents in similar two flats in the area. Pencil in utilities, etc, it’ll be somewhat lower. But that’s back of the napkin stuff, to do simple comparisons of not-too-similar properties–and if that simple number is sub-5 (as it sometimes is for props featured here begin discussed as possible rentals), I think people are kookoo to buy.
This is not kookoo, unless it has structural/major mechanical issues. And if you can tenant (illegally) the basement, then it’s a *solid* winner (again, barring major issues). If the place burned down, you could sell the hole for at least $250k, and quite probably $300k.
PS:
“Not sure what kind of deal you’re looking for Nimesh.”
Obviously either a turnkey 9 cap, or a slumlord 15 cap (which works out to 9 after rent collection problems).
What’s the Section 8 payment for a 2 bed in 2015??
Answering my own question:
It’s $1,093. And that’s a (essentially) guaranteed pay.
Would prob need to spend a little more to get the building fully legal, and would have more trouble renting the basement, but could rent the garage separately, and set yourself a floor that covers your costs…
Always found it a little odd to call these “lofts,” and even more odd that “the older lofts were mostly apartments.” In NYC, lofts were…mostly lofts.
“What slays me still is the teardown quality rentals in sub-prime Logan that sold for $500k+ in 06/07”
These same bldgs were selling in ’09-’13 as REO or short sales at truly nice cap rates, if you were the kind of investor who was willing to fool with lots of small properties. There were as many as you cared to buy.
Now the traditional buyer — couples that want a renter to pay their mortgage — are back in force. I’m not sure most of these people know what a cap rate is, much less compute it.
“That’s not including the depreciation he can depreciate for the necessary repairs and improvements.”
Huh? You can deduct certain regular upkeep expenses. Repairs and improvements are capital expenditures, and the only thing you can do is add them to your cost basis.
Improvements are capital expenditures, repairs are expenses. Like that missing wall is a repair, but a new kitchen is a capital expense. Either way, they’re depreciated over 27 years. I’ve seen tax returns where the depreciation is so great over the rental income that the investor has no income whatsoever and pays no tax, even though the investor is actually pocketing the depreciation into his personal bank account. These were large apartment buildings. By the time the 27 years of depreciation runs out he’ll be dead or he’ll just 1031 it. He also outsourced the management to a management co and that was another expense. If you do it real estate you can make a lot of money; but do it wrong and it’s just a PITA being a landlord.
Sorry, the wall repair is deducted, the kitchen is depreciated. It’s friday afternoon and I’m already half-tuned out. I should just stop typing because i’m starting not make sense
“I’m already half-tuned out”
Uh, me too. (Watching the Cubs at work.) I read HH’s comment as “deduct” rather than “depreciate.” Never mind, carry on.
” i’m starting not make sense”
On the 3d beer, I see…
“Now the traditional buyer — couples that want a renter to pay their mortgage — are back in force. I’m not sure most of these people know what a cap rate is, much less compute it.”
They care about how much the rent reduces their monthly PITI, and if it makes a 15 year mortgage affordable. And that’s all they should care about; but shelter is a cost and not *necessarily* an investment.
For that person, this is almost better, as they take the partly finished basement and duplex down and have a bunch of usable space, and still about 2/3s of their monthly nut paid by a tenant (or about 1/2 on a 15). For those folks, too, the problem isn’t the monthly, it’s the $65k+ at closing.
“a bunch of usable space”
To stuff Grandma in, if they have to. And a lot of people have to.
The 2/3-flat is an awesome housing type. It’s a real asset to Chicago.
“The 2/3-flat is an awesome housing type. It’s a real asset to Chicago.”
Thee used to be a ton of them in SF, too. Of course, the rundown ones in marginal locations sold for $300k in the 80s, or are tiny units, like this one:
https://www.redfin.com/CA/San-Francisco/1415-Kansas-St-94107/home/737106
ps:
SF came to mind bc I know someone who ‘stuffed’ grandma in the (above grade) basement of her Mission two flat.
“the rundown ones in marginal locations sold for $300k in the 80s”
speaking of which: https://www.redfin.com/NY/Bronx/410-E-136th-St-10454/home/44740748
Will Mott Haven’s day arrive again?
“speaking of which:”
Can almost hear the LGA 31 departures from here.
That’d be an ok looking street, with no cars.
“Always found it a little odd to call these “lofts,” and even more odd that “the older lofts were mostly apartments.” In NYC, lofts were…mostly lofts.”
I get so tired of the NY snootiness. As if you’re the only ones with “artists”???
Pulease.
You think those Brooklyn “lofts” were really “lofts” either? Come on.
This was an old Montgomery Ward building. It’s pretty authentic loft space- as far as a former factory/commercial building being converted into residential. I don’t know how you get more “authentic” than that. You may not like how they DID the conversion- but that’s a different argument.