Robert Darrow, @properties

Archive for the ‘Development’ Category

Your Guide visited The Sterling on Tuesday, June 15, for a Broker Re-Introduction event. The Board of Directors has made improvements to the facilities, managed to increase owner occupancy, and improved the financial health of the community. In part 2, we tour a fabulous combined unit with one of the current residents and tour the common facilities with the Property Manager.

Your Guide visited The Sterling on Tuesday, June 15, for a Broker Re-Introduction event.  The Board of Directors has made improvements to the facilities, managed to increase owner occupancy, and improved the financial health of the community.  In Part 1, Your Guide interviews Board President Donna Randel and committee member Charles Rubner on what has transpired in the last couple years.

Blair Kamin, architecture critic at the Chicago Tribune posted two great articles on the proposed development at the corner of Clark & Addison across the street from Wrigley field.  The new development is known as Addison Park on Clark.

From the May 22, 2010, article (and link)

Thousands of people are getting all steamed up about a controversial plan for an eight-story hotel, apartment and retail complex across the street from Wrigley Field. On Facebook, a group called “People Against the ‘Malling of Wrigleyville’ “ is sounding the alarm, as if big-box retailers and a mall named “Cubby World” were about to set up shop at the corner of Clark and Addison, right across the street from the Friendly Confines.

And from the June 16, 2010, article (and link)

The design calls for tearing down a variety of funky low-rise buildings designed by different architects in different styles at different times. It would replace them with one large structure designed in one style by one architect at the same time. That’s why the version that raised such a ruckus last month, with its flat and featureless walls of brick marching down Clark and Addison Streets (above), seemed mall-like even if it wasn’t really proposing to construct a mall.

Check out the articles to see what’s in the works for these parcels right in the heart of Lakeview/Wrigleyville. 

The development planned for the stretch of Addison street directly across the street from Wrigley Field made the news again this week with a revised plan and public support from Alderman Tom Tunney.

We wrote about the development back in 2008 when plans included 150 apartments, a hotel, a 500 car garage and 100,000 square feet of retail space.  The plans then called for a 22 story building. 

Today’s revision includes 399 cars in an underground garage, and a building that is a few feet shorter than Wrigley Field across the street so residents and hotel guests don’t have free views of games.

Both the hotel and the apartment section will be smaller than originally planned.  Your Guide has concerns, however, that the development might be over burdened with expensive upgrades.  The original plan called for the parking garage to start at ground level, with retail only along part of the street.  Now the entire garage will be underground.  This is wonderful from a neighborhood and aesthetic perspective.  But now the entire building will cost millions more to build, and offer less revenue opportunity. 

Let’s hope the economics work, and hold, because this looks like a beautiful addition to the neighborhood. 

Building on a successful alliance that has resulted in more than 65 condominium sales in the past two months at 565 W. Quincy, Belgravia Realty Group and @properties announced they are teaming up again to sell the remaining Chicago townhomes at Union Row on the city’s Near South Side.

Union Row is located on West 16th Street just south of Roosevelt Road, between Halsted and Canal. It is adjacent to University Village and the Pilsen neighborhood. The development features a total of 35 residences, only five of which remain. The four-story Chicago townhomes offer 3 to 4 bedrooms, 3 to 4.5 baths, 2,460 to 2,901 square feet, and attached, heated two-car garages. Prices recently were reduced by as much as $200,000 and are now at $374,900 for a 3-bedroom, 2.5-bath home; $429,900 for a 3-bedroom, 3-bath home; and $499,900 for a 4-bedroom, 4-bath home.

Union Row is developed by 16th & Union, LLC, which is managed by Belgravia Group, Ltd., one of Chicago’s most experienced and respected homebuilders. @properties is the #1real estate brokerage firm in Chicago as well as the city’s #1 seller of new-construction and condominium-conversion developments. The marketing alliance was announced by Belgravia president and CEO Alan D. Lev and @properties’ co-founders Michael Golden and Thaddeus Wong. The two companies recently joined forces on another Belgravia-managed development, 565 W. Quincy in the West Loop, where buyers have snapped up almost 70 condominiums in the past eight weeks.

“Major price reductions, the Federal Homebuyer Tax Credit, sub-5-percent interest rates and the availability of FHA financing have created incredible buzz and momentum,” said Lev. “We saw it at 565 W. Quincy, and we’re seeing it at Union Row. The sense of urgency is real because the value is real. Since we dropped the prices, 12 homes have gone under contract.”

“The fact that you can buy a new townhome for between $400,000 and $500,000, just five minutes from the Loop and built by one of Chicago’s premier homebuilders is unbelievable,” said Wong.

“We expect Union Row to sell out prior to the April 30 tax credit deadline as opportunistic buyers take advantage of below-market prices,” added Golden.

All of the remaining townhomes at Union Row feature main living spaces with open kitchens, 9 foot 6 inch ceilings, hardwood floors and expansive windows. Kitchens include granite countertops, 42 inch cabinets and GE stainless steel appliances. Master baths come with raised-height vanities, marble countertops, and separate showers and tubs. Each home also features outdoor living space on three levels: a first-floor patio, a balcony off the kitchen with a gas line for grilling, and a deck with concrete pavers off the fourth floor.

Union Row is conveniently located near several popular attractions. Two blocks west is Halsted Street, the gateway to the large University Village master-planned community, which includes hundreds of new homes, shopping and restaurants. To the north is Roosevelt Road, where several major retail outlets have been added in recent years including Whole Foods, Best Buy, Home Depot, L.A. Fitness and ShowPlace Icon Theatre. To the south is Pilsen’s main retail thoroughfare, 18th Street, which features a number of restaurants and art galleries. Union Row is also just five minutes from the Loop, lakefront and U.S. Cellular Field.

The sales center and decorated model are located at 622 W. 16th Street, and are open from 10 a.m. to 6 p.m. daily. For directions, floor plans and information on the Chicago townhomes at Union Row, visit www.UnionRowTownhomes.com, or call 312-829-4600.

In a press release on September 8, and detailed in the Sun Times today, local developer William Senne (also the Broker/Owner at Property Consultants Realty) slams other developers for their price reductions, and how “panicky” discounts hurt the marketplace.

Mr. Senne seems to be reacting to recent sales promotions like these and names Smithfield Properties by name in his press release:

Your Guide thinks this sounds like someone crying over spilled milk, and offers several reasons why price adjustments are sound business decisions.

In example after example, it is demonstrated quite clearly that you can inspire sales by playing with price.  Think of pricing as a throttle:  if you want to go faster, drop the hammer on pricing and more sales immediately follow.  This of these examples and try to argue that these are poor decisions:

• Cash for Clunkers: 700,000 car sales in less than 2 months.
• Groupon – the website where businesses pitch crazy discounts to large quantities of self selected consumers. Success stories include 1,269 pairs of blue jeans sold on June 8, and 4,913 Annual Memberships to the Art Institute of Chicago!
• If you need a Real Estate Example, you need only look as far as @properties development R+D 659, where over 115 condos have been sold since the announcement of dramatic price incentives.

Sounds awful, doesn’t it?

Your Guide also takes exception to another assertion by Mr. Senne that buyers will find themselves in substandard units in a building that lacks a viable condo association.

To the contrary:  I find that selling units to actual home buyers is the more desirable alternative to developers facing tough decisions in this marketplace.  Too often developers choose one of two other options leaving condo buyers frustrated to financially ruined.  Those choices include:

• The developer retains control of the un-sold condos and rents the units.  With a building half-full of renters, and the developer in control of a sizable percentage of ownership, owners face financial uncertainty when the time comes to sell their homes.  Strict lending guidelines make it virtually impossible for a new buyer to get financing on a condo in a building where one person owns more than 10% of the association.  Add to that the transient quality that the new development acquires as a rental property rather than as a stable condominium building.
• The developer stubbornly refuses to react to the market; steadfastly holding on to pricing that is clearly out of touch, and eventually loses the remaining units in foreclosure.  Worst case:  you need only drive by the Lincoln Park Lofts, formerly The Ashton Lofts located at the corner of Ashland, Fullerton and Clybourn.  Two poor home buyers purchased and moved in two years ago, and after the developer’s remaining units were foreclosed upon, were stuck living in an empty building with no other neighbors to help pay or care for the crumbling building.

The only validity to Mr. Senne’s argument is that previous buyers are hurt by the price reductions.  We can’t argue there.  It’s not fair for the prior buyers to bear the burden of the lower prices.  But those lower prices are not the fault of the developer, they are a function of the marketplace. To ignore the reality is to simply kick the can down the road.

Your guide realizes it’s time to update what’s happening with the stalled development of the old Dominicks site at Broadway and Aldine in Lakeview after noticing that the original post is one of the most popular here at www.YourWindiCityGuide.com.

Original post here.

The current outlook is murky.

The development site was just about to fall into foreclosure, when the developer filed for bankruptcy protection.

If I had to guess, however, the bankruptcy will simply forestall the inevitable foreclosure of the land by one of the THREE lenders on the property.  One lender provided funds for acquisition of the land, and another developer was providing construction financing.  A mezzanine lender was providing a bit of financing in between.  The development partnership has defaulted on all three loans.

The development is no stranger to controversy (Full article at Crain’s here)

A $7.9-million loan on a former Dominick’s site in Lake View is turning into a sour deal for a controversial investment fund managed by developer Allison Davis and a nephew of Mayor Richard Daley.

The fund managed by Mr. Davis and Daley nephew Robert Vanecko is seeking to auction off a site at 3012-3036 N. Broadway St. after an apparent default on the mezzanine loan by a venture owned by little-known Chicago developers Michael O’Connor and Jonathan Zitzman, according to a recently published notice of public sale.

The city’s Inspector General, David Hoffman, is investigating how DV Urban obtained investments totaling $68 million from five city pension funds, according to the news reports. Chicago police officers and others have raised questions about their pension funds’ investments with DV Urban.

Your guide has no doubt that there will eventually be condos of some form or another on the site.  But ground breaking on a new, smaller scale development is probably years away.  I would also wager that the site will include space for a new Dominicks grocery store as the original deal to sell the land to the developer included a provision for the Grocery Chain to open a new store in the development.

It just came to me today, when I received the fifth email from the Head Honcho’s at @properties announcing another development that has slashed prices quite dramatically to inspire some fast sales.

This is after remembering that my Video Walking Tour of Roscoe Village contained one vignette of my comments on some of my buyers getting some REAL GOOD DEALS so far this year.

The buyers that I mention in the video above made an offer of $475,000 on a River North townhouse listed for $565,000.  The owners countered us at $550,000.  My advice was to try to settle for around $525,000.  My buyers made a counteroffer at $500,000, and when the received a counteroffer of $540,000 said “No Thanks.”

Those sellers came back to us a day later and said they would take the $500,000.

Your guide had the pleasure of selling one of the massively discounted one bedrooms at 2930 North Sheridan on the very first day of their blow-out sale.  $40,000 off a $260,000 one bedroom is a very sweet deal.

Here’s another one from a few weeks ago.  Since this flyer is getting on three weeks old, we have the results of the incentive:  Over 100 more contracts since this program was released to @properties in-house transactions, and then to the Public a week later.

More? You ask?  Savings at Superior 110 are also in the 20% off range.

A couple examples of incentives that probably won’t work in the flyers below.  No mention of the amount of discount offered for these “Builder Close Out Price Reductions.”  But looking in the MLS, they appear to be around 5% off.  That’s probably not going to cut it.

And at Silver Tower (below) the $5,000 off units that start at $250,000, but easily scoot above $500,000, the discounts amount to 2% on a less-expensive one bedroom to under 1% on the upper end large units in the building.

Your guides and our co-workers are reporting signs of life in the real estate market in some neighborhoods.  For example, in Lincoln Park and Lakeview combined, there have been 56 closings and another 45 units gone under contract in the last 7 days.

But the latest report from Appraisal Research Counselors shows dismal sales at new developments downtown.

More than half of all the new developments in downtown Chicago had sales that were canceled (net negative sales) or did not make a single sale in the first quarter.

Only 55 units went under contract or closed.  This leaves 1,590 units completed, still waiting for sale in the marketplace, and another 2,250 units under construction that are unsold.

Buyers take note:  Appraisal Research Counselors is seeing prices being reduced by as much as 20% at selected developments.  20% – across the board. And your guide is aware of some buildings with incentives that knock off 1/3 from last years prices.  Also look out for some of the auctions where a few units selling without reserve have sold for half-price.

UPDATE:  Sun Times Article here on a bunch of cool incentives being offered by local developers.  Loop to Roscoe Village.

2nd Update:  Thanks, Gail, for the correction.

This site is the triangle of land located at North Avenue, Halsted Street and Clybourn.  A former BP/Amoco gas station was located here.  It’s a bit remarkable that a big retailer thought that the site was developable for a high-end, boutique computer store.  But this is the site of the new Apple store – as in computers.

(Gratuitous Simpson’s reference below)

Your guide recognizes that about a bazzillion cars drive past this location on a daily basis.  And that during the Christmas shopping season, navigating the streets around the Clybourn Retail Corridor is near insanity.  So we are collectively wondering – where are people going to park???

While walking back to the car from the new Apple site, I came across this lonely vision.  I call it “Popcorn, anyone?  ANYONE??”