Robert Darrow, @properties

Archive for the ‘Downtown’ Category

We usually post our guide to weekend diversions on Friday, but we received word on two fun things to do around Chicago during the week this week, and both are for mid-week events.  For your enjoyment:

Chicago Outdoor Film Festival

On Tuesday, July 21, at Butler Field in Grant Park, we’re breaking a record.

Join us for that evening’s presentation of the Marx Brothers classic “Duck Soup” and we’ll give you a Groucho nose and glasses as we attempt to enter the Guinness Book of World Records for “the most people wearing Groucho Marx glasses.”

Be sure to sign in to receive your glasses. We must wear them for a total of 10 minutes and pose for video and photo, at approximately 8:15pm.

Bring your friends, bring your family and join us and our partners, The Goodman Theatre, for this unique experience. It’s history in the making and you don’t even need to say the secret word!

For this season’s complete line up of films and more information on the Chicago Outdoor Film Festival, visit www.ChicagoOutdoorFilmFestival.us

Raffle to throw out the first pitch at September Crosstown Classic

In honor of Valspar’s new partnership with the Cubs, you can bid on a chance to throw the first pitch at Wrigley Field when the Cubs take on city rivals the Chicago White Sox on 9/3.

Valspar is also collecting donations for Habitat for Humanity and will match the amount collected. All of the information you need is located at:

 http://www.valspar.com/fieldcolors/.

Learn more about the new Cubs color palette inspired by Wrigley Field and enter for a chance to win the first pitch sweepstakes.

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.

Your guides have been watching developments throughout the downtown market for signs of life.  But instead, they seem to be dropping like flies.

The latest news on Wacker Drive at the Waterview Tower is that the hotel planned for a portion of the building has served notice to the developer that they are terminating their agreement to open the Shangri-La Hotel inside the building.

The developer, Teng & Associates, has been unable to get new financing from sources in China, and construction crews stopped working on the building in the fall last year.  Nothing has been happening on the construction site since then.

Remarkably, Chicago has not had many construction projects that go belly up during construction.  Besides this development, the only other unfinished eyesore is the mid-rise condominium building located at the corner of Fullerton and Clybourn on the west edge of Lincoln Park.

Over at Trump Tower, the developer and the bank have agreed to set aside their differences and try to work out a solution to the final sell-out of remaining units in “The Donald’s” Tower.  Financing restricted the developer from lowering prices on the remaining units which has caused sales to grind to a halt even though competing re-sale units in the building are tens, if not hundreds, of thousands less.

Although there are several un-sold units remaining for sale, the building is practically complete. 

A reader writes and asks:

Will two bedroom condos appreciate more and sell better than one bedroom condos on the near north side of Chicago? I hear a lot of people say they are buying a two bedroom condo since they are more in demand.  However, I would rather have a 1 Br with a better floor plan rather than cram a second bedroom into a condo that is just barely bigger than the one bedroom. What are your thoughts on this? From my experience 1Br sell out faster in new developments whether it be price point or some other cause. Basically my question comes down to is it really easier to sell a 2Br condo in Chicago rather than a 1Br?

Your guides had been giving the advice that in the close-in neighborhoods, the smaller condominiums such as studios and one bedrooms had historically had greater appreciation than larger condominiums like two and three bedrooms.  This was especially true at the most affordable end of the price range for the smaller condos.

But we haven’t really backed up these statements with hard facts since we undertook the first study of appreciation rates for condos in close-in neighborhoods ten years ago.  So now seemed like a good time to revisit the study.

Let’s examine the Near North (River North, Gold Coast, Old Town) first since that’s what our reader asked about.

Near North 1 beds

Near North 2 beds

At first glance, the appreciation stats for one beds in the Gold Coast looked promising.  But then after running the numbers for two beds, it is clear that the appreciation for the larger units is greater. 

Another interesting statistic:  the median sales price for a Gold Coast one bedroom in July 2008 is down slightly compared to July 2006.  The median price for two beds in Gold Coast is up 5% from two years earlier.

We explained to clients that much of the demand for condominiums in close-in neighborhoods was driven by first time buyers who were in entry level business jobs downtown.   Those buyers had a strong desire to own their own property, but perhaps could not afford anything larger than a studio or one bedroom while still remaining close to work. 

So let’s look at condo’s even closer.

Downtown 1 beds

Downtown 2 beds

Right downtown, the trend line appears roughly similar for the one beds and the two beds.  But the two beds appear to have a slightly greater rate of appreciation.  And look at the two year appreciation for two beds comparing July 2008 to July 2006:  the two beds are up 42%!

Another popular walk-to-work location is the Near South side – including Printers Row and Dearborn Park.

Near South 1 beds

Near South 2 beds

In the Near South neighborhood, the one bedroom appreciation rate is practically flat and there is modest price appreciation for the two beds.

It seems your guides need to update their story to follow the more conventional wisdom that two bedrooms are, indeed, a better investment.

Stay tuned – these stats might turn around quickly when the economy improves.

Announced today by the International Olympic Committee, Chicago is in the final four cities under consideration to host the 2016 Olympics.

This means that the IOC believes that Chicago can technically meet the demands of being a host city, however their message also indicated that they believe that Chicago has some weaknesses to overcome.

Not making the cut today were  Prague, Czech Republic; Doha, Qatar, and Baku, Azerbaijan.

A final decision should be made in November 2009.

Check out the complete announcement at Crain’s

It certainly doesn’t feel like it with a cold front swirling over the great lakes and temps are hovering in the 50′s, but Summer is officially now in full swing.  Chicago’s 25th Annual Blues Festival is this weekend where you can hear live legends like B.B. King, Buckwheat Zydeco and Chicago favorite Lonnie Brooks all in Grant Park and all for free.

25th Annual Chicago Blues Festival, Thursday, June 5 through Sunday June 8, 11:00 a.m. until 9:00 p.m. each day, Free admission, Grant Park

Thursday, June 5
11:00 a.m. – Blues in the Schools w/ Katherine Davis, Erwin Helfer, Eric Noden and the Stone Academy Blues All Stars, U.S. Cellular Front Porch Stage
12:45 p.m. – Professor Fernando Jones Columbia College Blues Ensemble, U.S. Cellular Front Porch Stage
2:30 p.m. – David "Honey Boy" Edwards and Friends (Billy Branch, Louisiana Red, Paul Kaye, Aron Burton, and Johnny Yard Dog Jones), U.S. Cellular Front Porch Stage. Edwards is one of the last original delta blues guitarists still currently performing, so be sure to catch him while you can.
2:30 p.m. – Keith Frank and the Soileau Zydeco Band, Louisiana Bayou Station and Social Club Stage (Also playing the U.S. Cellular Front Porch Stage, Friday, June 6, at 11:00 a.m. and the Gibson Guitar’s Crossroads Stage, Saturday, June 7 at 12:00 p.m.)
4:00 p.m. – Diamond Jim Greene, Maxwell Street Corner Stage
8:30 p.m. – Johnny Winter with James Cotton, Petrillo Music Shell. "Bring your sunglasses to keep the glare of his albino skin from blinding you." – Chuck.

Friday, June 6
2:30 p.m. – Louis Jordan: Hitmaker of Blues, Jazz and R&B, a discussion with Howard Mandel, Bill Milkowski, Lonnie Brooks, Bob Porter, and Ernest Dawkins, The Zone Perfect All-Natural Nutrition Bars Route 66 Roadhouse. July 8th would be Jordan’s 100th birthday, so it’s a good time to catch this discussion on the man often called "the father of rhythm and blues."
2:30 p.m. – Omar Shariff, Louisiana Bayou Station and Social Club Stage (Also playing the same stage on Saturday, June 7 at 4:00 p.m.; not to be confused with actor Omar Sharif)
4:30 p.m. – Jim O’Neal moderates “’Sweet Home Chicago’: Anthem or Cliché?" featuring Billy Branch, Bill Gilmore and Bill Dahl, The Zone Perfect All-Natural Nutrition Bars Route 66 Roadhouse. Another great discussion, this time on the legendary blues song.
7:25 p.m. – Eddy “The Chief” Clearwater’s West Side Strut with special guests Lonnie Brooks, Jimmy Johnson, Ronnie Baker Brooks, Otis Clay and Billy Branch, Petrillo Music Shell

Saturday, June 7
2:30 p.m. – Juke Joint Duo: Cedric Burnside and Lightnin’ Malcolm, Mississippi Juke Joint Stage (Also play the same stage on Sunday, June 8 at 1:30 p.m.)
8:35 p.m. – Buckwheat Zydeco, Petrillo Music Shell

Sunday, June 8
12:00 p.m. – Rodney Brown’s salute to Louis Jordan, Gibson Guitar’s Crossroads Stage
2:30 p.m. – Tony Joe White, U.S. Cellular Front Porch Stage
8:15 p.m. – B.B. King, Petrillo Music Shell.

May 16 & 17 – Chicago Mayfest

3100 North Ashland Avenue. $5 to enter

May 24 – Memorial Day Parade

250 North State Street. Free

May 28 to 31 – Chicago Turkish Festival

50 West Washington – Daley Plaza. Free

May 30 to June 1 – 24th Annual Gospel Music Festival

Millennium Park, 201 E. Randolph Street. Free

May 31 to June 1 – Belmont/Sheffield Music Festival

3200 North Sheffield – $5 to enter

From Crain’s today:

Garrett Kelleher failed to pay nearly $430,000 in property taxes due nearly two months ago on the proposed site of the Spire, even as the Irish developer was launching a lavish, five-city Asian tour to trumpet the massive skyscraper.

The 2,000-foot-tall Spire project would challenge even the most seasoned developers. And the failure to manage a routine task like property taxes raises questions about Mr. Kelleher’s ability to complete a multi-billion dollar project that demands the highest level of concentration.

Oops!

Although in his defense, it appears that Mr. Kelleher submitted the correct change of address forms with the Cook County Treasurer’s office last November.  And the office promptly lost them.  So the bills got mailed to the wrong address.

But as Real Estate taxes are a popular topic in the news and on the blogs, everyone knows when they’re due, and thanks to articles such as this one, you know how to locate your tax bill online.

Ahh, city life.  Things that spring forth from the ground in Chicago that non-city folks won’t ever get a chance to appreciate.

And, yes, actual grass, too.

While Chicago is not suffering the mortgage crisis as painfully as residents of the Coasts, Florida and Las Vegas, more and more foreclosure news has been creeping into the news lately. 

A roundup of foreclosures in the news in the last month:

March 3 Crain’s Chicago Business

Foreclosure flu spreads:  14,250 foreclosures in 2007, a 46% increase over 2006. 

Northwest Side neighborhoods like Albany Park, Logan Square and Portage park saw their numbers more than double, according to a new report provided to Crain’s ahead of it’s scheduled release.

Those areas drew newcomers in large numbers in recent years as first-time buyers sought affordable alternatives to pricier city neighborhoods like Lincoln Park, Lincoln Square and Lakeview.

Tower builder tie-up: Related Companies and Magellan discuss a combo as two major projects falter.

Talks to combine two of the Chicago area’s largest developers come at a critical time for Related Midwest LLC.  The luxury condominium developer is struggling with a slow sales start at its two newest projects and has been without a president.

Related Midwest LLC developments include:

• 340 on the Park – already completed
• Canyon Ranch Living – planning
• Pestigo – Planning
• Roosevelt Square – Under construction

Magellan Development is currently building several high rises at Lakeshore East on the New East Side.

Decline seen in apartment sales

Sales of Chicago-area apartment buildings could drop 30% this year, to $1.08 billion, from a record breaking 2007,  according to a report from CB Richard Ellis, Inc.

Signs of the slowdown were evident late last year, a time when sales activity typically spikes as investors hurry to complete deals before yearend.  But only 42% of the Chicago deals close din the second half of last year, as opposed to 69% in the last 6 months of 2005, the previous record year when sales totaled $1.89-billion.

March 10 Crain’s Chicago Business

A Sterling example of condo Bust:  Foreclosures, falling prices: a bad omen?

Over the past three years, lenders have filed 95 foreclosure suits, accounting for about $40-million in loans, on condominiums in the 389-unit high-rise, fueling a big drop in condo values throughout the building.

The tower represents a worst-case scenario in a downtown condo market that is weak but so far hasn’t seen the falling prices and rising foreclosures that have afflicted once-hot markets like South Florida.  The real test for condo owners will come over the next two years, when downtown developers are expected to complete more than 10,000 condo’s, an unprecedented jump in supply.

A nice building in a superior location seems an unlikely victim of rampant foreclosures, but artificially propped up prices along with developer incentives may have played a part in its unfortunate predicament.

American Invsco Corp attracted a lot of investors with incentives such as two years of free taxes, two years of free assessments, and artificially propped up cash flow.  One incentive offered to make up the difference between the rent and the mortgage + tax + assessment payments for a two year period. 

It was too good to be true for some buyers.  As the incentives wore off, many buyers saw their monthly payments soar to unsustainable levels.

A trickle of foreclosures in 2004 grew to a flood in the next three years.  Nearly 1/3 of foreclosures involve owners with multiple units in the building.

An American Invsco spokesman blames the Sterling’s troubles on the depressed market:  "It has nothing to do with our program."

In more stable neighborhoods where the inventory supply is more limited and there is not as much speculation, the number of foreclosure epidemic seems quite limited.  In the Lakeview neighborhood, for example, only had 126 foreclosures, but this represented a 94% increase from 2006. 

It’s interesting to watch the tale of two cities developing right inside the borders of Chicago.