Trump Hotel/Condo at Nearly 50% Off: 401 N. Wabash in River North
This hotel/condo unit just came on the market at Trump Tower, at 401 N. Wabash, in River North.
Unit #1714 is currently listed, according to the listing, at nearly 50% off its 2007 purchase price.
This listing says the seller paid “close to $800k in 2007. What a steal!”
It also states that “this investment will pay for itself. Income statements available.”
The sellers are, apparently, motivated because it says to “make us an offer!”
It is now the cheapest 1-bedroom hotel/condo unit available for purchase on the MLS.
Prior to its listing, that title belonged to Unit #2018 which boasted thait was the “least expensive hotel room in the building.”
There are no pictures of Unit #1714 yet on the MLS. So, I’m going to link you to pictures of Unit #2018 instead (both units are 604 square feet.)
See pictures of Unit #2018 here.
Are either one of these a “steal”?
Can you actually use these as an “investment?”
Unit #2018: hotel room, 604 square feet
- Sold in February 2008 for $664,000
- Originally listed in June 2009 for $469,700
- Reduced several times
- Currently listed for $439,770
- Assessments of $1100 a month (includes doormen, AC, cable, pool, master association fee)
- Taxes are “new”
- Andrew Glatz at Crown Heights Realty has the listing.
Unit #1714: hotel room, 604 square feet
- I couldn’t find the original sales price in the public records but the listing says it was “close to $800k in 2007“
- Currently listed for $398,999
- Assessments of $1099 a month (includes doorman, AC, cable, pool, master association fee)
- Taxes are “new”
- Katie Malone at Hansen Realty has the listing. See the listing here (no pictures yet.)
I would love to live in a hotel room or a condo with hotel like amenities.
Unfortunately they might have overshot their market a bit in this building as its unlikely dollar beer Bob will be buying at Trump any time soon!
The big kicker here are taxes though.
I can only imagine what the amenities must be to justify the association fees. In any case, who is this type of property targeted to? I assume the best candidate would be a company who would actually use the room as a hotel for their clients/employees?
“I assume the best candidate would be a company who would actually use the room as a hotel for their clients/employees?”
i was thinking the same thing, corporate owned looks like the market buyer here.
i notice a lot of people knock the trump tower and also its insane prices.
now i saw a video of a 70th floor 3/3 on chicago mag website. The views gave me a woody, seriuosly are there any other buildings with this many units with the views that trump has?
the design of the building i actually like, every picture i have taken of the skyline the trump always looks like i photoshopped it in cause the way it reflects light and the sky.
before everyone here slams the trump, go look at that video, and remember this is FULL amenity building! it doesnt have a grocery store like the john hancock, but the trump doesnt have asbestos, so its a wash 🙂
I will tell you right now, that the restaurant ’16’ is frickin amazing, everyone should go check it out at least for lunch sometime!
I don’t think they skimped on much in this building relating to the construction of it. I was in it a few weeks ago, and it felt much nicer than the Hancock and pretty much any other tall residential building anywhere near downtown. In 5-10 years this building will have fewer major issues to have to repair. It is good for the skyline and the city in my opinion.
Those assessments are fairly outragious. Those are the kind of assessment I see for highrises on the Gulf of Mexico with 1/2 to 1/3 the units. I wonder why the assessments are so expensive out of the shoot when cost gets spread across such a large building?
1 bedroom hotel condo = studio, right?
Is the kitchen carpeted?
The “condotel” owners are SCREWED. Hardly any financing available for them that don’t require at least 50% down and Tony Soprano interest rates. Most lenders won’t touch condotels with a ten foot pole these days.
While I don’t know this for fact, I would still bet that when this building first was announced and the units pre-sold more than 50% of the buyers probably thought they could get financing with 10% down which was available at the time for condotels. Now that there are closings, I am really curious how many contracts have fallen out due to lack of financing.
I don’t think any of the condotel developments have truly worked out for their owners. Sounds good on paper, but I would be surprised if anyone is really making any money.
Even this unit, if it is such a good investment, why sell it at 50% off? It can’t be covering the cost of the unit. No one except a crackhead gets rid of an asset at that deep of a discount if it is paying for itself.
“I can only imagine what the amenities must be to justify the association fees.”
Keep in mind that this is a hotel; there *might* be a big piece of that assessment going to a reserve for replacing broken/outdated furniture. There will undoubtedly be a special in the future when Trump (as manager) deems it necessary to “refresh” the hotel rooms.
And you can’t change *anything* about the decor.
I feel bad for the people trying to unload these…
not
“The “condotel” owners are SCREWED. Hardly any financing available for them that don’t require at least 50% down and Tony Soprano interest rates. Most lenders won’t touch condotels with a ten foot pole these days.”
Actually, you are partly correct. Regular lenders will not touch the condotels at all. To my knowledge, not even with 50% down. Most buyers, and the pool is much smaller, are required to do cash. The only other option is an affluent buyer asking their bank, Harris, Northern Trust, etc. to write a mortgage and keep it in house. Typically, this type of buyer would have lots of $$$ invested with these banks.
By the way, the Trump Spa (Health Club) is very nice. 16 restaurant is great too.
Daily maid service must be included? That would help explain the thou monthly.
I feel sorry for the accountants that have to keep track of all this stuff. No, actually they are probably happy, it keeps them employed.
The highest revenue psf for a developer is to sell units/rooms as timeshare (i.e. sell room 52 times), then fractional (i.e. 4-8 times), then the next highest gross revenue psf is the condohotel route, sell one room – once (if you can get it done, Trump almost pulled it off), then lastly and the lowest psf is standard price-per-key entire hotel asset pricing to institutional investors.
The condohotel rooms never cashflowed or even reached break-even on the original proforma, I remember reading in Crain’s. The income when not used by the owner, and put into the hotel’s rental pool, was only there to “offset” the cost to the individual owner.
One thing about Trump’s building I don’t like is no outdoor space or balconies, like 55 E. Erie or the condos above the Park Hyatt. I do think that with Millennium Park’s creation, Trump has the best location, on the river, steps to Michigan Ave., proximity to the Loop and access to Grant Park.
where is the grocery in Hancock? you talking bout that little Italian place on the underground level?
There’s no arguing that this building is in a fantastic location and that the construction quality is very good.
Unfortunately, the price is high for the finishes and the uncertainty about the condo/hotel costs and revenue make it very difficult to justify purchasing in the condo/hotel portion of the building.
“The condohotel rooms never cashflowed or even reached break-even on the original proforma”
Well, $399k is below original proforma capital cost, so it’s definitely in the right direction. Still, what’s the highest per-key closing price for a Chicago hotel?
“Still, what’s the highest per-key closing price for a Chicago hotel?”
The James Hotel was sold in 2008 for $460,000 per room. This is the highest paid for a hotel/room in Chicago. A minority interest in the Peninsula was sold off a few months but dont know what that was valued at.
A real estate agent was telling me a couple years back that condos at Trump were originally sold at reasonable prices. They collected down payments in the millions before construction ever started. However there was some fine print in their contracts that got past these investors that said Trump could raise the prices on these units later on. Well, he did bringing up the majority of the unit’s costs to a million minimum. These investors backed out and got their money back. Trump used this money to build this building without using his own money. Now he sold them for some real profit.
There is totally here say. I have never looked into this. She told me their were A LOT of p’d off people in Chicago because of this back then. Does anyone know if their is any truth to this?
“The James Hotel was sold in 2008 for $460,000 per room.”
And with adjustments for room mix, room and hotel quality, non-room rental revenue options and control premium, I’d think something around $350k for a Trump standard room would be roughly equivalent as a top end–and that’s compared to top of the market, which isn’t true now. The $399k ask seems like a really decent starting point.
well how much do you expect to earn per month owning a 1BR hotel unit? how does it work?
“well how much do you expect to earn per month owning a 1BR hotel unit? how does it work?”
Having some idea how Trump runs his businesses, I would not expect to earn anything. If you (and Trump) were lucky, you might cover the majority of your costs and be able to use the room a couple dozen times a year for less than it would cost to just rent a room for the same number of nights.
The condotels are put into rental pool. If your room is one the guest stays in, you get a cut of the revenue.
Many of the presentations always use simple math to convince people to buy these places.
If the hotel is 80% occupied that means a room should be filled 292 days per year and the typical room goes for $200/night that means the unit should generate about $58,400 per year in revenue. Say Trump keeps 50% of it (i don’t know what the split is) that means the owner gets $29,200 at full utilization of the room. That is only $2433/month to cover the mortgage, taxes, and assessments which puts them underwater.
The assumption above is probably pretty optimistic too. Who knows, I just know these condotels aren’t working out as good as the fancy presentations claim.
“where is the grocery in Hancock? you talking bout that little Italian place on the underground level?”
No, there’s one up top at the sky lobby for the residential part of the building (I once ran into Chris Farley there. . . he was buying soft drinks and candy bars).
Although, “grocery” is a stretch. . . it’s pretty small, I’d call it a convenience store.
apparently it’s larger now. http://yochicago.com/10895/10895/
but open only to residents
The current bagholders in the hotel industry are toast. New construction went wild (based on the typical over-optimistic proformas) only to be met with declining occupancy and rates.
A critical mass of hotel defaults is looking more and more likely every day. Given the oversupply in nearly every corner of the USA, this could result in cascading defaults and a reset of the industry. Think of it this way: a weak hotel defaults and is sold at discount. Lower cost basis means new owner can lower rates. Previously “strong” competition (none really – it’s all relative today with hotels) now must lower rates and do the default dance. Lather, rinse and repeat throughout the local market.
Stay tuned, it is going to get interesting.
Anyone remember that Trump offered insider pre-construction pricing to the Trump Tower design team? (This group was not challenged by Trump, when Trump wanted to retrade his pre-construction pricing to some early buyers.) Architect friends who worked on project and bought a unit under this special offer, thinking it was a good investment. I feel so sorry for them, relatively naive middle-class buyers making a overly “sophisticated” real estate play, trapped now w/bad investment which will be very very very difficult to sell. This is a serious financial problem for them.
“Architect friends who worked on project and bought a unit under this special offer”
Please tell us they bought a condo and not a hotel unit.
Good timing on both our parts, Sabrina — I noticed this post as I finished editing up a new video with Tricia Fox about hotel condos and the problems they’ve caused at Trump and Elysian. We just posted it up on YoChicago: http://yochicago.com/the-problem-with-hotel-condos/11772/
Man, tell Tricia to change the batteries in her smoke alarm.
The only way to make money on a condo hotel (unless you’re the builder) is to flip the unit to a greater fool. This model of course was only working while real estate “only went up”. Rental income never covered ownership costs even in the best of times. Now, with hotel occupancy rates plunging everywhere, there’s not even a chance it would pencil out. The Trump staff won’t even begin filling the rooms of condo hotel investors until they fill all of the Trump owned rooms first. These have to be the worst investments since the timeshare scams of the 80s.
“The Trump staff won’t even begin filling the rooms of condo hotel investors until they fill all of the Trump owned rooms first. ”
That is, I am certain, prohibited by the terms of the management contract. The occupancy has to be equitably distributed, with adjustment for owners’ usage–that is, if you always stay in your room on Saturday night and Saturday night is a high occupancy night, you’ll miss out on your share of revenue.
I would never live in a building named after Trump, just like I would never shop at Macy’s.
Both are New York brands with a feeling of entitlement… that invaded Chicago and brought nothing but low-class knockoffs to the respective world-class quintessentially Chicago categories they invaded!
A critical mass of hotel defaults is looking more and more likely every day. Given the oversupply in nearly every corner of the USA, this could result in cascading defaults and a reset of the industry
I’m pretty sure that this is how Conrad Hilton went from owning a small chain of hotels in Texas to owning one of the largest hotel chains in the world when the US finally emerged from the Great Depression.
“The current bagholders in the hotel industry are toast.”
Yes. This is correct. Look at the stock price of Chicago-based Strategic Hotels.
But it just shows that the price per room, even at the James Hotel level ($470K) is a loser. So therefore, Trump hotel rooms are worth today less than that bubble price.
What most Chicago RE people don’t get, unless they’ve dealt with the timeshare/fractional crowd is just how screwed up all of this can get. Trump brought this kind of financing in from his experience in Florida, not New York. That’s where all of this stuff originates. No wonder it didn’t work in Chicago, one-half the time it doesn’t even work in FL!!
Timeshare is one seriously interesting/bizarre business….and condo/hotel is just an off-shoot of that mentality. Condo-hotel proformas are the child of timeshare people who are constantly moving money around to stay solvent.
Nothing can entice like selling a “room” 52 times (timeshare) for $30,000 (or more!!!) per week, that equals $1,560,000 per room!!! Marriott and Starwood plus tons of fly-by-night cos. are in this business. I’ve dealt with these RCI and Interval International types. Trump’s “condo-hotel” is nothing more than imported quirky sales BS imported from the timeshare industry, with a proforma only a Florida coke-sniffer could respect. The buyers are as stupid as anyone we know who paid for a timeshare.
Oh, and if those timeshare (52x) sales numbers sound like a homerun, which they do on a proforma, believe me, they never NET anything like that.
“I would never live in a building named after Trump, just like I would never shop at Macy’s.
Both are New York brands with a feeling of entitlement…”
LOL! I’ve always associated Trump with being a biz hack and more of a celebrity and brand than businessman and Macy’s with suburban people in suburbia mall shopping.
Nothing elite about either and certainly nothing overpriced about Macy’s. If you think Macy’s is targeting anywhere near the affluence or luxury segment LOL at that. Its about as typical suburban Americana as the Applebee’s and Loew’s theater right outside.
“Nothing elite about either and certainly nothing overpriced about Macy’s.”
Not to mention that, notwithstanding its NYC origins, Macys is a Cincinnati company.
“I would never live in a building named after Trump, just like I would never shop at Macy’s.”
being a hardcore chicagoan it was hard to see marshal fields go and i shopped there a lot at the old orchard location and the state street local. (state street way more). now if more people shopped there it wouldnt be macy now would it. Macy’s IMO did a great job at trying to keep it as nostalgic as possible while trying to get thier name brand across.
trump and what trumps is about smells bad his cheesy 60′ extravagance and a media whore style irks me too. but besides the name trump on the building, its a good building with insane views and insane prices but a good building. the wife and i have a room booked for our anniversary weekend (still to hard for us to be more than an hour drive from our kid)
“being a hardcore chicagoan it was hard to see marshal fields go”
also sucked when Montgomery Wards closed up shop. I have a couch that i have had for years there, just get it reupholstered every 4-5 years and a coffee table that i sand down and stain when it looks bad.
“Macy’s IMO did a great job at trying to keep it as nostalgic as possible ”
They blew the most obvious (imo) thing: Calling the State St store (only–who cares about the mall stores? Exc maybe Lake Forest, which they closed, right?) “Macys at Marshall Field State Street”–>thereby acknowledging the history of the building, location and relationship with Chicago, but still putting the Macys brand out front. Adaptive preservation. There’d still be lots of people pissed, but it also would have been enough for a lot, too.
“Nothing elite about either and certainly nothing overpriced about Macy’s. If you think Macy’s is targeting anywhere near the affluence or luxury segment LOL at that. Its about as typical suburban Americana as the Applebee’s and Loew’s theater right outside.”
Yes, let me add that I hate Macys… and I think their crap is overpriced IMO.
This building still looks empty at night, I think for a while they were leaving lights on in empty units to make it appear to be more occupied!
“Macys at Marshall Field State Street”
i didnt say perfect job 🙂 i look at it as if macy’s didnt buy marshals we would have seen for two years at that state street site an vacant space then a starbucks and gap would take it over. and for two year that spot wouldnt have the “christmas windows” that would be the sadest two christmas ever!
so i look at it as Macy’s saved much chicago tradtion that could have been lost. dont shop there as much now dont like the stuff they sell but the wife gets most of her dresses there.
“…now if more people shopped there it wouldnt be macy now would it. Macy’s IMO did a great job at trying to keep it as nostalgic as possible while trying to get thier name brand across.”
This is a Macy’s propaganda. Marshall Field’s was the pioneer of downtown flagship department stores. It has a long list of “firsts” and it had an upward trend of sales. Macy’s bought Marshall Field’s ** BECAUSE ** people were shopping there… not because people weren’t. Only after May Company bought Marshall Field’s did Macy’s go after acquiring May. The obviously wanted the crown jewel of Chicago retail!
Macy’s didn’t save Chicago retail… in fact it destroyed a 150 year old institution.
Trump didn’t save Chicago real estate… in fact it lowered the par on our cities world-class architecture.
Never have shopped at Macy’s – never will.
Never bought in a Trump building – never will.
I’m a die-hard Chicagoan
One last note… Trump is overpriced with okay quality (again similar to Macy’s).
Geez… the invasion of trash to Chicago.
“This is a Macy’s propaganda”
good lookin out JasonM, didnt know that always thought MF was doing bad and wanted to sell before it got worse. i think when i get some real free time i would like to dig into this. any good recommendations are where to read more about this?
“Trump didn’t save Chicago real estate…in fact it lowered the par on our cities world-class architecture”
never said trump saved anything, i am just very impressed at what he brougth compared to all these ugly things popping up in subrban lakeshore east (read aqua) south loop and loop.
I will agree the prices are INSANE there but so are the views. check the video at chicago mag
Groove77
Wikipedia has a great history of what Marshall Field’s did for our city. He helped bring us Field Museum, the Shedd, University of Chicago, and of course the emporium on State Street Marshall Field’s. Just like Chicago invented the modern skyscraper, Chicago (through Field’s) invented the modern department store.
http://en.wikipedia.org/wiki/Marshall_Field%27s
You may also want to check out http://fieldsischicago.org/ as they continue to work to bring back Field’s to State Street.
I guess they have picked a wrong time to build such a high end building in chicago, I have a friend who is renting in the building, she said half of the building is emtpy and she felt a little scared.
“That is, I am certain, prohibited by the terms of the management contract. The occupancy has to be equitably distributed”
Are you sure about that, anon? I’ve never heard of this being part of a standard condotel agreement. Also, it would be hard to audit/enforce.
Jason M,
thanks i will check that out.
our book shelf has a some great books on burnam, sears, field’s, wards, a weird book on how the first daily’s wife saved the chicago cultural center form being torn down, a crazy book on polish history in chicago with recipies (got it for the recipies). i dont remember the names of them sorry, i will have to revist them again when the little one gets older. (havent read a book since back when we found out she was pregnant).
thank you for the fields.org now that i know there are rally’s i will be going, wife, stroller, and grandparents!!!!
Whomever bought this near ask got burned because unit 2410 came on the market on January 25th, 2011 with an ask price of $330k. Listing verbiage starts with “Not a short sale!” as well.
It’s a condo hotel unit just like these two with 607 square feet with assessments of $1,080. Not only is it significantly cheaper than the two units discussed on this thread but it’s also on a higher floor so likely better view.