Month: December 2009

Problem Buildings in Chicago – Watch Out!

We hear it on the news everyday that foreclosures are increasing. Now is the time to buy, now is the time to get a great deal through a foreclosure or a short sale. While I agree that now is a great time to buy, those looking at certain building in the Gold Coast, River North, and Loop areas need to be very careful. Sometimes there is a reason why a condo is selling at only $200/SF in the Gold Coast.

To save time I am going to come right out and tell you the problem buildings.

10 East Ontario, 345 N. LaSalle, and 440 N Wabash.

There are others, however, let us stick to these for this topic. They are American Invsco buildings. Many people who bought into these buildings could either not afford the units or decided to sell them after a couple of years. Because of both reasons we have seen a huge influx of units in these high rises, especially at 10 E. Ontario (Ontario Place). Whenever supply exceeds demand, price of supply must lower, in order to increase demand. We have seen this at Ontario place and unfortunately many units are now going “short sale” (sales price is less than the mortgage amount) or going into foreclosure. Whenever a building has large amounts of foreclosures we see a few things happen.

ASSESSMENTS: Let’s just think logically. If you cannot pay your mortgage, can you pay your assessments too? Which do you typically let go first? You let your assessments go first, they usually won’t affect your credit like several late mortgage payments would.

Currently at 10 E. Ontario there are 64 units on the market, if half have stopped paying their assessments, this means that the association is seeing less cash come in. Which means one of two things happen.

1. Maintenance on the building gets neglected or,

2. Assessments are increased or a special assessments is called

Neither of these are good for unit owners or owners trying to resell their units.

FINANCING: Especially now, banks are looking at buildings and associations very carefully. If the building has an excessive amount of foreclosures then the banks will simply not lend. This means that for the most part the only people able to buy into the building are cash buyers. This will then decrease demand substantially for the building, while supply remains the same.

I hope this was not too dry for you, however, I want to stress that it is very important you ask yourself why a condo is so cheap. Look into the building, check blogs on-line, as a realtor, do a google search; make sure that your future investment is sound and secure. There are plenty of great deals on the market in great buildings, be sure to buy one of them instead!

Two Downtown Condo Projects Switching to Rentals – The Mondial & The Trio

According to Crain’s two downtown condo projects may switch to rentals – the Modial (900 W. Huron), which is a 141-unit in River West and the Trie, a 100 unit building in the West Loop. Mr. Berger the developer of the Mondial says he has recently cancelled 50 purchase contracts and returned earnest money to the buyers. He is quoted saying “Do you think someone who has a contract for a $450,000 unit that they signed two years ago is going to close?” “They aren’t going to close, so why allienate the marketplace? We have to do the responsible thing.”

I give Mr. Berger great credit for seeing reality, not being bitter and doing the smart thing.


The largest challenge they will face, will be their initial challenge of restructuring their construction loan. Both have their loans coming due in the next year and their banks will need to extend them, or re-finance the loan. However, I do not see this being an issue. It is the smart thing for any bank to do given the current economic climate.

The Mondial & Trio will also need to face the challenge of running the rental building. Not too big of a deal, they can farm it out.

The next challenge they will face is a market place with declining rents. Not a huge deal for them, they are into the building cheap, they are the developers!


In total it will add an additional 241 units to the market, an increase of 10% in comparison to the amount of dedicated rental units that were expected to hit the market over the next 2 years. This will only assist in driving rents lower throughout the downtown market.

One of the largest reasons these buildings will help drive rents lower is because they are condo quality. Hardwood floors for instance is something that is not found in most “all rental” buildings. Renters are becoming more discerning as they are seeing how many private condo rental options are available to them.

I believe at the end of the day the Mondial and the Trio will do well as rental buildings. Perhaps in 5 to 7 years they can convert back to condos; however until then they will join the ranks of several other projects throughout Chicago, such as The Lofts @ Roosevelt Collection that have now gone ALL RENTAL.

And a recent crains article claimed that rental prices are going to increase soon in Chicago…haha…idiots

Is now the time to buy in Trump Chicago?

I have been blogging about Trump Chicago for a while now and have always said that many great deals could be had, but I have never called a bottom. Never once I did I say you MUST buy now. Never once did I say the opportunities are going away. Well folks…I am going to start changing my tune.

Over the past few weeks I have had conversations with several different people looking in Trump who wish to combine units. I have rented several units to clients who have expressed interest in soon making offers. We have clients now going directly to Trump to look at inventory that is not on the resale market. We have clients who are now starting to pay a premium to get a view because the owners know they can ask for it, they are the only ones on the market.

If you have been on the sidelines waiting to buy in Trump I recommend you start looking NOW. Prices are not going up and the building still has some time before that happens, however, inventory is shrinking and if you are looking for the PERFECT unit I suggest you start looking to buy soon because you want your options to be open. You do not want to buy into the building after the market has started going up because chances are you will not get a GREAT deal, only a good one.

The AQUA – Why are more people not talking about this building?!

Trump Trump Trump Trump…that is all Chicago is talking about. Then there is the occasional article about the Spire…then we might hear about Waterview, Perhaps the new Ritz Carlton project…but why is there not more talk about the Aqua? You may remember it from the news when the Fairmont group backed out of their hotel plans in the Aqua but besides that no one has been speaking a word about this soon to be occupied Chicago gem.

The Aqua will house both Condos and Apartments along with a soon to be named hotel. Pre-Leasing has already begun for the apartments and it appears that move in will be this May. The Aqua is the building below that has those strange looking balconies. Each balcony will be unique says the developer…not a single one will be like any other.

The Aqua

The amenities of this building can easily start to compete with the best of Chicago and will probably win. The two floor shore club for Aqua residents boasts 3 Pools, Sky Lounge, Outdoor Garden with Grills, Cabanas, Fire Pits, Walking/Jogging Paths and much more. In total, the outdoor recreation deck will be the largest out of any building in Chicago. The Fitness center will be the most expansive in the Lake Shore East neighborhood. The building will also boast 24hr Doorman, Party/Billards Room, Yoga Rooms, Business Center, WiFi internet access, Bike Storage, Hot Tubs, Library, Coffee Bar & Lounge, On-Site Dry Cleaners…the list goes on.

The interior features are lush as well featuring Grohe faucets, Snaidero cabinetry, Bamboo flooring, Floor to Ceiling Windows, Limestone in all Baths…again the list goes on. The views from the Aqua are incredible as well allowing you to see the Lake, Millenium Park, Lake Shore East Park and of course the amazing Chicago Skyline.

With all this being said, I wonder why more people are not talking about this building. I have spoken with several people who have purchased units in the Aqua and they all cannot wait to move in. I think they believe they are moving out of the country because all they talk about is sitting by the pool on their cabanas, reading a book and having a drink. Perhaps when their mortgage statement arrives they will awake back to reality. However, even then they will know they are living one step closer to paradise.

So how much does the Aqua cost? Well, here is the break down if you plan to purchase a condo in Chicago’s newest gem.

Currently available on the market…

One Bedrooms from $340,999

Two Bedrooms from $705,000

Three Bedrooms from : $1,029,000

If you plan to rent one of the apartments in the Aqua you can expect the following in rent prices

Studios from $1464 to $1660

Convertibles from $1550 to $1806

One Bedrooms from $1926 to $2350

Two Bedrroms from $2900 to $3111

Trump Chicago Hotel Condo SHORT SALE

So we’ve been waiting for this to happen, Short Sales in Trump on the Condo Hotel Side. We’ve had one listed for a little while, however, the pricing has finally hit new lows. While I am proud to represent this listing with Crown Heights Realty, the pricing shows what has happened to the condo hotel market not only in Chicago, but throughout the country.

401 N. Wabash Unit 2018 is our listing. It is a Studio Hotel Room with 604 SF priced at $350,770 which is an incredible value in comparison with what they were selling for over the past few years!

If you are looking for a great deal on a Hotel Condo in Chicago then this is it! The problem? You cannot finance it. It does not matter what your credit score is, what you do for a living, or if you are the almighty himself, you will not be able to obtain financing. Condo-Hotel are considered a Quasi-Commercial loan and banks simply do not want to take the risk on these types of loan products at the current time. So you MUST be a CASH buyer for 2018.

2018 is also a short sale so you will have to wait a little while for bank response. However, it very possibly could be worth the wait. Please contact me to schedule a showing.

Trump 2018