We Love Authentic Lofts: $74K Reduction at 215 W. Illinois in River North

The Anchor Lofts at 215 W. Illinois was one of the first loft conversions in River North so they are large and have more “authentic” features.

We last chattered about Unit #4C, a 2-bedroom, 2-bath, in October 2008. Since then, it has been reduced again, by another $49,000.

According to the listing, the unit has 11 foot ceilings, timber beams, and a “newly updated” kitchen.

See our chatter and pictures here.

Here’s its history again:

Unit #4A: 2 bedrooms, 2 baths, office

  • Sold in May 1993 for $225,000
  • Sold in October 2001 for $300,000
  • Originally listed in September 2008 for $674,000
  • Reduced
  • Was listed in October 2008 for $649,000 (parking included)
  • Reduced
  • Currently listed for $600,000 (parking included)
  • Assessments of $537 a month
  • Taxes of $4,615
  • Central Air
  • Steven Heilig at Baird and Warner has the listing. See more pictures here.

32 Responses to “We Love Authentic Lofts: $74K Reduction at 215 W. Illinois in River North”

  1. I’ve got a novel idea. Lets give the banker whoever underwrote this mortgage loan billions of dollars in taxpayer dollars. Because obvious the bank is dumb as rocks if they originated a 600k+ mortgage on this place.

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  2. Bob:

    Even if someone gave a %600k loan on this place (no evidence of that—last sale was $300k), do you really think it was a “banker” in even the loosest sense of the word? Probably a mortgage broker who sent it along to a glorified (and overpaid) clerk at the bank who checked off teh items on teh checklist and approved it. The first “banker” who touched it was most likely dealing with it in a pool, and therefore just didn’t care about a “rounding error” like $600k.

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  3. i’m disgusted with these prices. 674K initial price? WTF! 600K now? LOL!

    I wish I could short all the prices on all these terrible properties. Remember wannabe sellers: if your house is sitting there without selling for a long period of time, it’s not the market’s/bank’s/president’s/wall street’s fault. it’s your wishful asking price.

    As an aside, the realtor “Steve Heilig” is sorta how I pictured our very own Steve Heitman. Plus their names are similar.

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  4. I’ve been watching this building for some time as I really do like the look and feel of these lofts. They are way over priced though. Here is a comparable unit is size but has much nicer finishes (in my opinion) and is listed at $765K. Perhaps a price war will ensue.

    http://www.coldwellbankeronline.com/ID/403507

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  5. That unit has nicer features but it seems very dark. Google earth shows the back of the units bathed in shade. Is there a balcony? How’s the noise transfer – are there concrete floors? I might be tempted to buy it in a year for $500k.

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  6. Ditto on the other unit, marco.

    That looks very nice (not sure how much is just staging).

    However, the second unit doesn’t have any parking, just a reference to parking across the street while the first seems to imply that it has deeded in the building. I wonder what the really story is about parking at these places.

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  7. I believe there was a rental in this building recently for about $2300 incl. parking. (I think it was on CL, and was NOT this unit)
    If rentals are $2300, how can they justify this purchase price?

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  8. ‘If rentals are $2300, how can they justify this purchase price?”

    It’s either “pride of ownership” or “I can’t just give it away”. Duh!

    Even using Stevo’s formula, and assuming the listed rent was the contract rent, these are severely overpriced:

    12*(2300-537)-4615/.055/.8 = $375,931. Which, frankly, seems like the right ballpark.

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  9. The first unit is a little blah, but that second unit is truly spectacular – i know – i went to a party there. Redone from top to bottom, high quality, excellent taste. huge and spacious.

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  10. Youguys are ridiculous. 375k for 2500 sq feet? And value is NOT a multiple of rent when you are talking about primary residences. These forumlas won’t work in high end neighborhoods. When were Manhattan condos ever in line with rent?

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  11. Manhattan prices declined by 30% in 1992-93. I don’t know if that made them “in line with rent” but from people who lived there then- it was fairly “cheap” to be a buyer after that downturn.

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  12. Madfly,

    I think you are onto something in that ownership is still a ‘status symbol’ or a ‘trapping of success’ that people are eager to disclose. During most of my life, especially during the bubble, people were very eager to volunteer that they ‘owned’ a place when I would ask them where they lived. I don’t see this changing in the near future either, at least for 20-somethings. Its a great way to stress to others you have all of the responsible characteristics of someone typically older who pays their bills on time. It doesn’t mean you are good at math, however (status symbols cost $, obviously).

    Personally I wouldn’t even pay $375k for this place. The entire neighborhood is offensive to my simplistic tastes. But I stand by my original prediction that some bozo will pay near or more than $500k for it. Good for them I say.

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  13. I just don’t trust that rental price.

    At 2500 sq ft, if somebody paid $500k that would be $200 a square foot, which for at least the quality of finishings in the second unit (3B) is still a ridiculous deal in that area/quality.

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  14. @kp, As I mentioned in the original post, it was NOT for this listing, or for the “better” unit posted above as well. This rental was listed and rented over 6 months ago, and I think it was for a 1bd plus den. Since you seem censorious at rental price information I thought I would mention my own current rental history. I sold my house in San Francisco, moved here, and now rent a condo that had been on the market for 775,000, but they rented it for 2,350 a month including parking. The CL listing for my unit had a rental listing price of 2,850 a month, but I have found that with any rental, you can easily take off about 15% from the listing. (It helps that I am a single person living in a 2bd)

    I now enjoy a heated garage, indoor pool, doormen, building gym, and all the other benefits of my building without having to pay the taxes, 800 HOA fees, or insane payments so that I could enjoy “pride of ownership”.

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  15. Bob- the reason rent and value does not fall in line is that people don’t make decisions on their primary residences based upon how much their place would rent for. If they like it, they buy it for what it’s worth to them, not what it rents for.

    Multi-units however, should be priced according to their cash flow, because they are strictly investments.

    And why does the person who buys this have to be a “bozo”? Everyone has different tastes. If this neighborhood isn’t your thing, then fine.

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  16. MADFLY, you are new to the game, right? The bubble went on for over 10 years and the idea of high ownership “premiums” will come and go with it.

    I was part of a group that bought new (never lived in) construction, 2/2 condos in Battery Park City in 91-92 at auction. They initially had positive returns, but the declining rental market of that time ate into them for several years.

    Bob, the greater fool theory never stays in vogue for long. It sounds like you only have memories of bubbly times. The lenders and sheep can no longer afford the premium, so the lenders and sheep are no longer active. Demand destruction was inevitable, just like in every bubble in the past. The hard work was getting the sheep to believe the premiums were necessary in the first place (“buy now or be priced out forever.”)

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  17. But, G, BPC wasn’t/isn’t a premium area. Something like that would have never happened to you if you’d purchased in a good ‘hood, like the UES. You also made the mistake of buying new construction–new construction is a set up to lose money–I mean haven’t you learned *anything* here?

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  18. MADFLT–

    The formula based on rent is from our dear friend Stevo Heitman. You seem to be saying that the local bull isn’t bullish enough. Altho, as I have said, if you don’t have a genuine rental comp, then it’s useless and there seems to be strong sentiment that $2300/month is too low for this place; let’s call it $3k instead:

    12*(3000-537)-4615/.055/.8 = $566,840

    If that’s the case, the $600k ask is pretty reasonable. But it still means that offers should be 5+% off of ask.

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  19. I don’t like the formula provided by SH. I like 110x or 120x times comparable rent instead. Even comparable rent is a moving target. Ultimately homes need to be priced in line with what households can afford using convential financing and traditional lending standards. For years we’ve been conditioned to believe that the average household (or even above average household) has greater income than they actually do. Reality is quickly coming into view. Your corporate middle manager neighbor doesn’t make $150,000 like you think, he makes only $110,000 and your accountant neighbor at the mid-size firm makes $80k not a $125k a year but he sure as hell spends like it. And so on and so on. They only reason they can afford $500,000 2/2s was an ARM IO loan that is fixed for the first 10 years.

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  20. Now that the emperor has no clothes, so to speak. It’s not hip, saavy or smart to use the IO ARM JUMBO loan to buy an overpriced loft you can sell in three years for *profit*. Including this property. $649 is a joke, a wishing price, the price is a reflections of the delusions in their head. $300k I can see, it takes only a little over $100k in income and a $60k downpayment to pay the mortgage. $649? WTF are they thinking? They cannot sell to people like themselves b/c they couldn’t afford it. I’d bet donuts to dollars these sellers couldn’t afford to their very unit if they had to pay $649k. I’d be shocked if they could. They need to sell to a demographic that makes nearly twice as much income as themselves. Who comprises that demo?

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  21. “I like 110x or 120x times comparable rent instead.”

    That’s an income property multiple, HD. If o/o properties are selling for 110-120x, in desireable areas, then we’ve overshot OR mortgage rates have gone up a lot.

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  22. homedelete – i’ll take you up on that bet. there are plenty of qualified buyers (and sellers?) out there.

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  23. Desirable areas are more expensive becaues the residents have higher incomes. the FB trying to rent his condo is subject to the same rental market as the large institutional landlord with hundreds of units.

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  24. Describe what you mean by ‘plenty’ and what means ‘qualified’. A good portion of the credit expansion over the last few years was into the subprime and alt-a markets because the definition of qualifed has deteriorated. the term ‘Well Qualified’ today means what ‘qualified’ meant years ago.

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  25. “the FB trying to rent his condo is subject to the same rental market”

    Yeah, that’s why I said o/o–owner/occupant–and I was too lazy to type it out; guess I should have. If when you buy a place, you are only willing to buy someplace that you know you can rent out and cover all of your costs, I’m sorry–not my idea of living well, even within your means. But then I have no interest in living in the type of home were there are dozens of comparable, if not quite idenitical, substitutes.

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  26. “the term ‘Well Qualified’ today means what ‘qualified’ meant years ago.”

    None of it means anything; they’re all advertising terms to get you sold before they tell you the actual price.

    The question on this property is, how many people have $120k in cash and can service a $480k mortgage (most likely a $417k first and a $53k 2d) at ~5% blended rate, plus the taxes and assessments? So, a little over $3000/month (~$2k payment, ~$1k assess+tax) “requires” maybe $11k/month gross or $135k/year in stable income. Basically, the problem is the down payment and the size of the sub-market within the people with sufficient income who are interested in a place like this. Those who are currently have a lot of choices.

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  27. most of the crap ever built is cookie cutter; in mesopotamia all the straw and mud huts looked alike except for the king who had a castle made of stone and mud. That’s not much different from today where most homes from plainfield to schaumburg to northbrook are generally the same.

    “I’m sorry–not my idea of living well, even within your means. But then I have no interest in living in the type of home were there are dozens of comparable, if not quite idenitical, substitutes.”

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  28. “most homes from plainfield to schaumburg to northbrook”

    Yeah, one more reason I don’t wanna live in teh ‘burbs.

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  29. Morgan:
    I’ve never lived in a building with an indoor pool, but had always questioned if I’d use it. Do you find that you and your neighbors take advantage of it? Not that I have an issue with public pools growing up with them, but more that it would be a luxury that I’d use only once or twice a year.

    I guessing it is a bit to common roof decks: most people (in my limited experience) in the building don’t use them but there are a few dedicated consumers.

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  30. Wicker:
    In fact I do use the building pool, as do many residents. It might have something to do with the average age of the owners in my tower which range between early 30’s and early 50’s. The building has a true three lane lap pool as well as sauna, spa, and gym. What is funny to me is to see people’s faces when I tell them I am a renter (GASP!) in their “luxury” tower. I also belong to a local gym, but find when the weather is like it is tonight, it is nice to not have to leave the building to get a workout.

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  31. “What is funny to me is to see people’s faces when I tell them I am a renter (GASP!) in their “luxury” tower. ”

    Earlier I almost criticized you for paying what us midwesterners see as a lot in rent, then read that you were moving from SF so wrote it off as likely all relative. However your above sentence, this is a priceless perk 😀

    Must be a nice feeling knowing that some other owner is subsidizing your lifestyle. 🙂

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