When Your Competition Is Just a Few Floors Down: 8 E. Randolph In The Loop
This 2-bedroom in Joffrey Tower (formerly known as Momo) at 8 E. Randolph in the Loop just came on the market.
It is a southeast facing corner unit with 1365 square feet.
It has granite counter tops and stainless steel appliances in the kitchen.
The listing says it has upgraded marble baths.
The building started closings in 2007/2008 just as the housing bust was taking hold.
This unit has one of the rare garage spaces as the 1-bedrooms in the building were built without parking spaces.
A two story Walgreens and the Joffrey Ballet occupy some of the commercial space in the building.
This is the third southeast corner 2/2 to come on the market in the building.
The other two units are listed as follows:
- Unit #2204: $450,000 (I can’t tell if there is parking- it doesn’t look like it)
- Unit #2304: $498,000 (includes a parking space)
Unit #2504 came on listed at $100,000 more- at $599,900, including the parking.
How do you market your property when there are other units in your tier in your building with similar finishes priced much less?
Nadine Ferrata at Coldwell Banker has the listing. (She also has the listing on #2304). See the pictures here.
Unit #2504: 2 bedrooms, 2 baths, 1365 square feet
- Sold in April 2008 for $545,000
- Currently listed for $599,900 (includes the parking)
- Assessments of $895 a month (includes a/c, doorman, cable)
- Taxes of $6549
- Central Air
- Washer/Dryer in the unit
- Bedroom #1: 12×14
- Bedroom #2: 12×12
Interesting situation here. By coincidence I’m supposedly closing on a unit here today. It’s been 3 months since we first got a contract. It has never taken me this long to get to closing before. First there was an appraisal issue that I can’t get into details on. More importantly this building is blacklisted by most lenders. Why? Oh, because a piece of the building fell off and hit a woman a while back and landed her in critical condition in the hospital. The city made them put up scaffolding until they could get their problems fixed. There will likely be special assessments in the future. In addition the City of Chicago has a 2 count building code enforcement action against the building, one of which seeks fines of up to $3000 per day. Now even by the city’s admission they are unlikely to ever really purse fines of that magnitude but most lenders won’t touch this building. There are exceptions though.
Then you have to look at the history of sales in this building. Unit 1804, obviously a much lower floor, sold for $387K with no parking. In general the price/SF in this building has been between $255 and $310 before parking depending upon quality and view. So even 2204 is a bit on the high side.
On a separate note…I will never understand what logic sellers use to pick a real estate agent. Why would the sellers of unit 2504 use the same agent who represents 2304? Nothing like using your competition’s agent. That would be like Ford and GM using the same advertising agency. Do they really think they have a fair shot in this arrangement? How can the agent simultaneously sell against both units?
But we see this all the time in buildings where some agent has created the perception that they “know the building” and this is somehow an advantage for sellers.
Thanks for the info. The building is over 50% rented which is an issue for most lenders
“Why would the sellers of unit 2504 use the same agent who represents 2304? Nothing like using your competition’s agent. That would be like Ford and GM using the same advertising agency.”
Prob not the case here, but I can see some logic to it in situations where an agent represents nearly all the listings in a building or a small sub sub neighborhood. That agent has (under certain circumstances) a vested interested in keeping prices high. Though the analogy is imperfect and unrealistic, would be like all the car companies selling through a single dealership to prevent undercutting on price.
Even then, may still make sense to go your own way if you want to be an aggressive seller to actually get your place sold.
“The building is over 50% rented which is an issue for most lenders.”
Wouldn’t that mean it’s cash only then?
With all of the buildings out there- why buy here? It’s not like it’s 340 OTP with spectacular views.
“That agent has (under certain circumstances) a vested interested in keeping prices high.”
I’ve heard people claim that in the past but I don’t believe it. The only vested interest real estate agents have is to sell lots of properties to maximize their commission. The buyers are half the equation in setting prices. And if you really want to sell your unit then you have to credibly be the best value in the building for that size unit.
“With all of the buildings out there- why buy here?”
Once we close I can share more information but it made sense. Prices have to reflect the problems.
“How do you market your property when there are other units in your tier in your building with similar finishes priced much less?”
Any reasonably intelligent buyer is going to visit all 3 places, likely on the same day, back to back to back. Therefore, in order to get a premium, there will have to be something about the unit that makes it obviously stand out head and shoulders above the others. Does this unit accomplish that? Doubtful.
Also, independent of other building issues, wouldn’t it be awfully difficult to get financing on the much more expensive unit? What appraiser is going to give them the value needed to support that price?
“How do you market your property when there are other units in your tier in your building with similar finishes priced much less?”
You’re marketing to someone who really wants to live in this building in spite of what Gary has disclosed about it. As Fred pointed out there has to be something amazing about this unit that beats out the other two. I doubt being a couple of floors higher does the trick.
the only reason I could think of to have that slightly higher floor be a much higher price is if that was high enough to be clear of other buildings (ie greatly improved view), but I’m guessing that’s not the case here.
” I doubt being a couple of floors higher does the trick.”
I don’t beleive that it is the case at this height in this building, but if2 extra floors takes one to a level over neighboring buildings, it sure could be worth the premium.
“I’ve heard people claim that in the past but I don’t believe it. The only vested interest real estate agents have is to sell lots of properties to maximize their commission.”
I agree that the effect is questionable but the argument would go that such an agent would have an interest in being perceived as being able to get a good price for sellers, so as to attract future sellers. Otherwise, a seller might as well go w someone else. Would need to have a big enough portion of listings in a micro neighborhood with sufficient distinct demand for that micro hood to be able to actually influence prices.
As I said, I don’t know how much this really happens. I can think of a couple of examples where this could potentially happen. I think what helps w the perception if not reality is that sellers that want to be aggressive may go w someone else, which can help make it seem that the neighborhood agent is getting the best prices.
shoulda refreshed to see nonya’s comment.
On the plus side, there is now a fantastic Target near this building.
Tier sales:
2204 – 4/5/08 for $480,900, now listed $450,000
2304 – 5/28/08 for $483,900, now listed $498,000
2404 – 4/30/08 for $532,000, sold 1/12/11 for $455,000
2504 – 4/23/08 for $545,000, now listed $599,900
There’s obviously some change that causes a premium between floors 23 and 24, but I don’t know what it is.
Based on the 2404 sale, I’d say all 3 units have a ways to fall before selling.
“wouldn’t it be awfully difficult to get financing on the much more expensive unit? What appraiser is going to give them the value needed to support that price?”
I should have mentioned that as well. In the current environment this is almost certain to be an issue. These days appraisals are the #1 obstacle because they are overly conservative and often just way off the mark.
“but if2 extra floors takes one to a level over neighboring buildings, it sure could be worth the premium.”
Perhaps make that statement worth “a” premium. View change or slight upgrades in an unit is not going to command $100K to most buyers and definitely not for most appraisers.
“These days appraisals are the #1 obstacle because they are overly conservative and often just way off the mark.”
That is because they are correcting for being too optimistic and way off the mark in the other direction during the boom. It is appraisers that created much of this mess in the first place. Units and homes should have never been allowed to appraise and appreciate like they did in the boom years.
I have a hard time thinking this will sell for 600k
“These days appraisals are the #1 obstacle because they are overly conservative and often just way off the mark.”
Isn’t a sale within the same building, especially for a similiar unit, the best comp?
Given the issues Gary mentioned, why would anyone buy in this building except at an extreme discount?
Oh, and unit 2804 closed in June with parking for 462,500 and that was at the upper end of the price/ SF in this building.
Mr. Lucido, You should be careful about posting “factual” information when you clearly do not have the facts to support your statements.
They just dropped the List Price to 499K!!!!!!!!!!!!
Terrible location. Across from Messy’s. There will be a protest march on Sunday 9/9 by members of Field’s Fans Chicago. Give the Lady What She Wants – She Wants Marshall Field’s!
“Isn’t a sale within the same building, especially for a similiar unit, the best comp?”
You would think so wouldn’t you? But I’ve seen absolutely horrible appraisals lately where logic does not reign.
“They just dropped the List Price to 499K!!!!!!!!!!!!”
Wow! Maybe it was a typo? I wouldn’t be surprised.
BTW, I found out today (at closing) that they have just raised the assessments in this building to….ahem…increase the reserves, which were already at $800K.
“They just dropped the List Price to 499K!!!!!!!!!!!!”
“Wow! Maybe it was a typo? I wouldn’t be surprised.”
You mean after we all were debating the price all day?
It’s the power of CribChatter, dude.
“It’s the power of CribChatter, dude.”
It’s possible but to get a client to drop by 100K in one day. That would be pretty incredible. On the other hand I’ve seen some really sloppy MLS listings so I’m betting typo.
“It’s possible but to get a client to drop by 100K in one day. That would be pretty incredible. On the other hand I’ve seen some really sloppy MLS listings so I’m betting typo.”
I’m not betting on a typo at all. Was the nearly $1 million 3-bedroom condo in Southport that we chattered about a typo as everyone thought it MUST be? Um…no. They lowered $100k a few days after the CribChatter post.
i’m going to pay you all $100 bucks each to say my place is undervalued by 100k when it comes time for me to sell 8) since cribchatter is so damn powerful!
Gary is buying in the building – can it be so bad?
“You should be careful about posting “factual” information when you clearly do not have the facts to support your statements.”
Just now saw this. What facts am I clearly not in possession of?
“Gary is buying in the building – can it be so bad?”
No- Gary’s CLIENT is buying in the building. Not Gary.
“why would anyone buy in this building except at an extreme discount?”
So we closed on unit 3203, which is a 925 sq ft 1 bedroom east facing unit without parking, for $258,250. The view is pretty good though the middle is blocked by another building. To the north you are looking at building tops and to the south you see the lake. It’s a good location – short walking distance to many jobs. The fact that the building has its issues allows you to buy at an appropriate discount – maybe not extreme, but decent.
I rented here last year; paid $1650/month for a ~900 sq ft. 1br on the 28th floor. Decent place to rent at that rate, but I can’t imagine buying here though.
Nice staff though, and most of the residents were cool too. It was kind of weird how the exterior doors to the hallway had to have a gap at the bottom of the door, meaning it was VERY easy to hear inside other units from the hallway.
Yes Gary, you need to get your facts straight. Especially about the reserve money you mentioned. You have no clue whatsoever about this building. I live here as an owner and you are speaking about things you have no true knowledge about.
Unit 2906 is a 1/1 850sqft residence listed as a short sale with an ask price of 259k.