Trump Tower in Chicago – 401 N. Wabash Condos

April 22, 2013 Leave a comment

Trump Tower Residences, located at 401 N. Wabash in Chicago has quickly become an iconic building. Many transplants and Chicagoans wonder how well Trump Tower is doing. What are condos selling for at Trump Tower? How much inventory is left in Trump Tower Chicago? Are prices increasing in Trump Tower?

Several years ago the real estate market in Chicago was a scary sight and Trump Tower Private Residences was not at all immune to market conditions. As a matter of fact, Trump Tower was probably hit harder than the average condo building in Chicago due to the delivery of condos in the building. Thankfully, those who could not afford to hold onto their units quickly sold. While this temporarily pulled down pricing in the building it allowed the “dead weight” who should never have purchased in the building to get out. Now, in the spring of 2013, the building is doing exceptionally well. Some buyers who purchased in 2009 are up over 20% or more on their investment in the building.

The developer still has a handful of units to sell and will likely be active in the building for years to come. However, the prime units with the best views have mostly sold. The “A” tier, which changes in square footage depending on the segment of the building, is the most desirable tier and this is a wrap around unit facing east. You get great views south as well as north. The view looking down the river, however, is priceless. All “A” tier units are over 3,000sf.

Outdoor Space?  Those seeking a balcony will need to look elsewhere as all terrace units have already sold. There are only in the entire building on the 29th and 51st floors. The most recent to change hands was 29I selling for $1,640,000. It is a 2/2.1 with a 350sf balcony.

Cheapest entry point into the building? On the condo side the cheapest entry point is going to be a Studio unit. They typically sell around 400k give or take 50k. One Bedrooms start in the mid $500′s to low $600′s and move up from there.

Amenities in Trump Tower: Trump Tower is a fully amenity building in Chicago. The fitness center does not disappoint and because you are connected to the hotel you get 5 star services in the fitness center such as bottles of water on each machine, fresh towels, etc. There is an indoor pool, spa, 24hr doorstaff, etc. You also always have access to Room Service as well as concierge.

Future of Trump Tower in Chicago: We can never predict what the future will hold for Trump Tower but the future does look bright. I believe we will continue to see many buy into the building. We will also see many extensive renovations. While the finishes in the building are nice, they are just basic for a high end building. We will continue to see buyers gut units and replace with premium finishes which will only help increase prices more in the building.

 

Paul Blackburn is an Illinois licensed Broker and Realtor with @ Properties in Chicago. He can always be reached via e-mail at Paul@PKBlackburn.com

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TRUMP TOWER CHICAGO RENTALS AND SALES UPDATE – 401 N. WABASH

September 17, 2012 Leave a comment

Trump Tower Chicago at 401 N. Wabash always has a handful for rentals available. Below is a list of what is currently on the market for rent at Trump Tower Chicago along with a list of Condos Recently Sold at Trump Tower Residences in Chicago.

Studios for Rent in Trump Tower Chicago:

#33F    $2,700/mo

One Bedrooms for Rent in Trump Tower Chicago:

48D    $3,400/mo

55B      $3,450/mo

64C     $3,500/mo

34E      $3,500/mo

32E     $3,600/mo

66B      $3,800/mo

32I        $4,000/mo

Two Bedrooms for Rent at Trump Tower Chicago:

76B      $7,500/mo

60F     $7,850/mo

Three Bedrooms for Rent at Trump Tower Chicago:

74BC    $9,000/mo

77A      $13,500/mo

86D      $14,000/mo

Prices on all units vary depending on owner, view and square footage.

RECENT SALES IN TRUMP TOWER CHICAGO  401 N. WABASH

60B closed from the sales center at $535,000/mo. 60B is a One Bedroom with 923 square feet. Parking was not included in the sale.

82B closed at $1,180,000 which is a high floor 2 Bedroom unit with 1,839sf. The B unit on this floor faces North West.

36H closed for $1,700,000 which is a large 2 Bed / 3 Bath unit with 2,742sf. This unit faces south, east and west. Living room views are great. Master Bedroom views, however, are blocked by the IBM building.

Paul Blackburn is a licensed Illinois Realtor and Associate Broker with @ Properties in Chicago. He can always be reached with questions or to schedule showings via e-mail at Paul@PKBlackburn.com 

 

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RIVER EAST CONDOS IN CHICAGO – WHAT BUILDINGS ARE IN RIVER EAST?

August 29, 2012 Leave a comment

Where is River East in Chicago? Is River East different from Lake Shore East? What condos are available in River East? River East is located on the NORTH side of the river where the river meets Lake Shore Drive. River East is located in the Streeterville neighborhood of Chicago. The most famous part of River East is probably the River East Art Center located just west of Navy Pier off of Lake Shore Drive. This is NOT the same area as Lake Shore East. Lake Shore East is located on the SOUTH side of the river where the river meets Lake Shore Drive.

What are the condo buildings in River East? Are there townhomes by the river in River East? Here is a break down of what and where you can buy in River East!

415 E. North Water & 445 E. North Water Condos

“River View Condominiums”

River View Condominiums

There are two towers that are red and greenish in color on the north side of the river. These buildings have townhomes at the base, but I’ll address the townhomes shortly. These towers are known as 415 E. North Water and 445 E. North Water or as “River View Condominiums.” These buildings were built in 2005 and 2000. The units are quite large and are one step up in price point compared to the typical new construction in Streeterville. One Bedrooms will typically be priced around $500,000 with Two Beds ranging from around $600,000 to well over $1 Million. Three Beds will start at a Million and work on up the price ladder.

South Views in this building are the most coveted as they allow you to view not only the Lake, Navy Pier and the River but also the skyline down the river such as Wrigley Building, Tribune Tower and Trump Tower. The buildings boast a sundeck, indoor pool and terrific fitness center (all these having views of the River). 24hr Door staff is a given but probably the best feature of these buildings is the fact that you are in Streeterville but VERY quiet. The location along the river is not known well to tourists. Walking along the River Walk you get the feeling you are walking on private property which means residents can enjoy the quietness of the river walk mostly by themselves. River East also has their own security officers that patrol the area.

RIVER VIEW TOWN HOMES

Look at the photo above. Look at the base of the building. Those are 4 level townhomes connected to 415 and 445 E. North Water. These townhomes originally sold from the developer (MCL) starting from the low $1,000,000′s but larger plans for much more. Currently there is only one on the market for just under $3 Million. The best part of these homes is they enjoy river views and all have roof top decks. They are connected to River View Condominiums so you enjoy all the river view condo amenities but also have your own private entrance (and your own private garage within their garage).

The corner townhomes offer the largest square footage but these townhomes are not the typical “narrow style” that you’ll find in other areas of the city. But, do keep in mind that you still pay a full assessment to the condo association. Just because you own a townhome does not mean that you get a break on your HOA!

At the end of the day, however, these townhomes represent some of my most favorite pieces of real estate in Chicago.

EAST NORTH WATER TOWN HOMES (NORTH OF RIVER VIEW CONDOMINIUMS)

The above townhomes are located just north of “East North Water Street” and therefore north of The River View Condominiums. These townhomes are older, being built in the mid to late 1990′s. They offer private 1 car garages (some have 2 cars) and have a very cozy feeling. They are narrow and what may be expected of townhomes in urban areas. They do, however, offer a very inexpensive option for those who want to own a townhome in the city right off the lake. There is, however, 1 catch.

YOU DON’T OWN THE LAND! Guess what else, the association doesn’t either! The townhomes sit on an always extendable land lease. This means that there is an additional land lease fee in addition to the standard assessment you’ll have to pay. The land lease monthly fee varies depending on the size of the unit but will run from $600 to $800/mo in addition to the assessments which price in around $400 to $500/mo. However, with pricing typically around $650,000 to $800,000 it is still a cheap way to own a townhome in the city right off the River & Lake Shore Drive.

Do you have the option to buy the land? Yes, you do. The land will typically sell in the mid 300′s to low 400′s.

440 N. McClurg & 480 N. McClurg Court

City View Condominiums, pictured above, is located at 440 and 480 N. McClurg Court. This picture is taken from the small docking area that is behind the River East Art Center. Look at the photo. You may recognize that Dick’s Last Resort used to be located on the bottom right of the photograph (it has since been relocated to Marina Towers).

440 and 480 McClurg are the oldest condos in River East having been built in 1991. They feature studios, small 1 bedrooms, large 1 bedrooms and 2 bedrooms. The buildings are broken up into two towers which share one main entrance and fitness center. There is also a sundeck. Many of the units have not been upgraded but some have. The first floor units are mostly duplexes which offer a “townhouse feel” without the townhouse price. Studio’s can be picked up around $160,000 and One Bedrooms start around $200,000 and move up from there depending on price. Two Beds typically start in the low to mid $300′s.

The best views in these buildings, in my opinion, are the east views as you are looking directly at the water and the tree line. You almost forget you’re in the middle of the city. For those, however, that want incredible city views check out the building below.

474 N. Lake Shore Drive

474 N. Lake Shore Drive is located at Illinois & Lake Shore Drive (at the end of the River East Art Center building). This building was built in the early 90′s but converted to condos in the mid 2000s. Unfortunately it is one of the ugliest buildings in the area, at least from the exterior. I despise the exterior…I hate the exterior. But, don’t judge a book by its cover!

The best units in the building are the West facing studios (600+sf) and the West facing corner 2 Bedroom units. The city views are unbelievable and the units are affordable! Studios from the upper $100′s and Two Bedrooms from the low $400s, sometimes a bit cheaper depending if there are any foreclosures on the market. The building features an incredible fitness center and lap pool along with a nice sundeck. 24hr door staff as well and you are only steps from Navy Pier. The feeling, however, around this building is very touristy as you are moments from the lake and Navy Pier and is nowhere near as quiet as the buildings near the river.

The building also has a very high rental occupancy rate (rentals vs. owners). I’m not sure the exact percentage but I know it is higher than most other buildings in the area. The developer still owns some units in the building.

505 N. McClurg  The Parkview

505 N. McClurg

The Parkview was the last project completed by MCL Companies that helped develop the River East neighborhood. The Parkview is located at 505 N. McClurg at the corner of McClurg and East Illinois right across from Fox & Obel grocery store. The building features fantastic One Bedrooms (priced from the low $400′s though some foreclosures have sold for the mid to high $300s), Two Bedrooms from the mid to high $500s and Three Bedrooms from roughly $900,000.

The building has an outdoor pool and small fitness center along with a great party room. The lobby has a grand feeling but the hallways feel small as there are only a small number of units per floor. The biggest complaint about the building are the yellow/orange colored hallways and yellow colored balconies.

The floorplans all have great usable space and there is very little wasted space. While the building has seen a couple foreclosures and short sales it has held on to its values fairly well. It is one of my favorite new (newer) construction buildings in Streeterville.

PAUL BLACKBURN IS A LICENSED ILLINOIS REALTOR AND ASSOCIATE BROKER WITH @ PROPERTIES. HE CAN ALWAYS BE REACHED VIA E-MAIL AT PAUL@PKBLACKBURN.COM

Please Visit www.BuyingInChicago.Com for more information about buying in Chicago!

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WHAT BUILDINGS ARE IN LAKE SHORE EAST?

August 21, 2012 Leave a comment

Lake Shore East, also known as the New East Side is located on the south side of the River at Lake Shore Drive. This neighborhood used to be home to a 9 hole golf course / driving range many years ago. Now the neighborhood has been completely transformed but I’ve noticed many of my clients who are interested in the area and not overly familiar with the new buildings that exist in the neighborhood. Here is an explanation of the newer buildings recently completed in the area along with detailed descriptions of each so you can figure out which building may be right for you.

THE REGATTA      420 E. WATERSIDE

420 E. Waterside

The Regatta, located at 420 E. Waterside was completed in 2007. It is located on East Waterside which is the street that appears to be one with Wacker Drive…the street seems to drop off before Lake Shore Drive. It is south of Wacker and runs parallel with Wacker. The Regatta is a full amenity building with the following amenities: 24hr Door Person, Fitness Center, Sundeck, Party Room, Lounge and Media Room. 

Just like the other new buildings in Lake Shore East your assessments covers everything including Internet and Basic Cable. All you pay is electric. The most prized view in the building is facing North which gives you a view of the River, Navy Pier and the City (looking West, viewing Trump Tower, Wrigley Building, etc.).

I would consider this the most economical of the new buildings as it has a variety of floor plans. In the building are studios, convertibles, smaller 1 Bedrooms as well as smaller 2 Bedrooms. If you’re in the area on a budget and want newer construction this is the best building to focus on.

The Regatta also has a more intimate feel than others in the area, despite the fact it has a whopping 321 units. The intimate feel comes from standard ceiling height in the lobby and a square design for the building itself which allow the hallways to feel more intimate.

THE CHANDLER      450 E. WATERSIDE

450 E. Waterside

The Chandler is directly to the east of The Regatta, located at 450 E. Waterside this building is the furthest east building of the newer buildings in Lake Shore East. Its glass windows that curve the corner of Lake Shore Drive and the River definitely help the building stand out as a premier building. The chandler was finished in 2008 and is slightly newer and more expensive than the Regatta.

The Chandler is also a full amenity building and features: 24hr Door Person, Party Room / Lounge, Sun Deck (Roof), Pool, Fitness Center and Media Room. Just like its sister buildings the Chandler has all inclusive assessments which the exception of electricity.

The Chandler has a more modern feeling than the Regatta with soaring ceilings in the lobby and a long elevator bank (all elevators on one side versus a square design where 2 elevators are across from 2 elevators in the Regatta). Therefore in the Chandler you have a less intimate feel and a feeling of modern grand. Overall, the Chandler is more expensive than the Regatta mainly because it does not have as many of the smaller square footage units as the Regatta does. We also saw higher upgrades throughout in the Chandler (think Snaidero Cabinetry) whereas only a limited number of owners upgraded to Snaidero in the Regatta.

THE LANCASTER      201 N. WESTSHORE

201 N. Westshore

The Lancaster is located at 201 N. Westshore which is a small street at the base of Lake Shore East Park. This building literally sits 6 stories lower than Waterside street. The Lancaster is the first of the newer construction buildings being built in 2004. It is also the smallest at only 207 total units (Regatta has 321 and Chandler has 304). The building, however, does not feature a pool but does have an expansive fitness center, party room and amazing sundeck as well as 24hr door staff. The largest attraction of the building is the fact that it sits on the park itself. Many people like being able to walk right out their front door into green space.

The most prized views in this building are actually the west views. Some might think the East views would garnish a higher selling price, however, the east views are not protected. The Lancaster does not sit on Lake Shore Drive and the developer, Magellan, owns the land between 201 N. Westshore and Lake Shore Drive. Originally 4 buildings were planned for that land, however, the crash in the market has halted these plans for the time being. The land, however, will most definitely be built on in their future. While the east facing units will not face complete view obstruction it will definitely be hindered and the “dead on” lake view that they currently have will be no longer.

The Lancaster has very functional floor plans. When you walk into a unit in the Lancaster you are doing just that, walking into the unit, versus walking into a hallway area that eats up square footage.

340 ON THE PARK – 340 E. RANDOLPH

340 E. Randolph

340 On the Park, located at 340 E. Randolph is the premier building in Lake Shore East, at least in my opinion. The quality and the ambiance blows The Aqua out of the water. The location in the area is prime offering spectacular south views (you’re catching not only Millennium Park, but the lake and the city as well). The north views catch Lake Shore East park in their line of site as well as the lake if you are on a high enough floor.

The size of the units in 340 are large. One bedrooms are in excess of 1100sf and 2 bedrooms are in excess of 1400/1500sf. The finishes are high end (think wolf, subzero, snaidero, etc) and the building is LEED certified. The building features all the amenities you would expect including: 24hr door staff, indoor pool, party room, lounge, fitness center, and winter garden. I find most of the floorplans to be extremely functional in the building. Have you caught on yet that this is my favorite? It is not only my favorite, but the favorite of a lot of people hence the higher pricing. One Bedrooms are starting on the low end in the $500′s and two bedrooms will garnish a sales price of at least $700/750+.

One of the nice things about the location of 340 E. Randolph, outside of the views, is its location directly on Randolph which cuts down in your walking time for a couple of minutes. Now a couple of minutes doesn’t seem like much but when you’re walking home from work in 10 degree weather with 30mph winds off the lake, a couple minutes means a great deal.

THE AQUA     225 N. COLUMBUS

225 N. Columbus

The Aqua, located at 225 N. Columbus cannot be missed. The exterior styling of the building is incredible and each unit is a little different whether it is the floor plan or the balcony. The building is comprised of three parts: Hotel, Apartments and Condos. The condos make up the upper floors of the building and therefore take advantage of the best views. The building features both indoor and outdoor pools, along with running tracks, fitness center, game room, lounge…the list goes on. Basically you name it, it has it!

The other benefit of living in a building with a hotel is the ability to walk down to the hotel bar or restaurant without leaving the complex. Also in the building is a new CVS.

The wavy balconies in the building are cool, I will give it that, but the size of some of them are too narrow to use. The other aspect of the balconies I do not like is the fact that you can view other peoples’ living rooms from your balcony (your neighbors) and vice versa. The finishes in the building are higher end (snaidero cabinetry, upgraded wood flooring, quartz countertops, etc). however they are not as luxurious as 340 E. Randolph.

Some people may be concerned about living in a building with a rental portion and a hotel portion. The hotel does have its own entrance and the rental portion does have its own bank of elevators on the other side of the lobby. Condo owners will enjoy the privacy of their own elevator bank and secured access.

The Aqua has a wide range of floorplans from studios to junior one bedrooms to large 3 bedroom units. This allows for multiple price points in the building starting as low as $300,000 for a studio.

Paul Blackburn is a licensed Illinois Realtor and Associate Broker with @ Properties in Chicago. He can be reached via e-mail at Paul@PKBlackburn.com   To learn more about buying condos in Chicago please visit www.BuyingInChicago.com

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CONDOS FOR RENT IN TRUMP CHICAGO RESIDENCES

July 19, 2012 Leave a comment

Trump Tower Chicago is located at 401 N. Wabash and is comprised of a hotel as well as residential condos. Some owners rent out their units and these units have quickly become popular with those looking for a top quality place to live that doesn’t feel like a rental! In recent months inventory levels for rentals has been slim throughout Chicago, however Trump has seen a healthy amount of condos come on the market. Beware, however, units that are well priced do move quickly. What are the costs?

Prices of Condos currently for Rent at Trump Tower Chicago

STUDIOS: From $2,500

ONE BEDROOMS: From $3,600 to $3,950

TWO BEDROOMS: From $7,850 to $8,300

LARGER TWO BEDROOMS: From $9,950

THREE BEDROOMS: From $9,900 to $14,000

 

When living in the building you have full access to all amenities in the building from Room Service to the Health Club and Spa.

Paul Blackburn is an Illinois Licensed Realtor and Broker with @ Properties. He can always be reached via e-mail at Paul@PKBlackburn.com

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BUYING A CONDO IN LAKE SHORE EAST “NEW EAST SIDE”

July 18, 2012 Leave a comment

Condos in Lake Shore East can be broken down into two categories: The new and the old. The new buildings are easy to spot in person; they are The Lancaster (201 N. Westshore), The Regatta (420 E. Waterside), The Chandler (450 E. Waterside), 340 On the Park (340 E Randolph) and of course The Aqua (225 N Columbus). The first building and the only condo building actually located directly on Lake Shore East Park is the Lancaster. It also, however, the only building NOT to have an indoor pool.

The other buildings of Lake Shore East are the older buildings such as: Harbor Point (155 N. Harbor), Park Shore (195 N. Harbor), 400 E. Randolph and The Buckingham (360 E. Randolph). My favorite of the older buildings is The Buckingham due to its views, updated yet intimate lobby and updated common area space.

So if you are looking in Lake Shore East what should you know when you first start looking?

Special Tax: For starters you should know that the newer buildings have an additional tax similar to an SSA. This is a special tax which came about to pay for the initial improvement of the land. This tax is minimal and will vary depending on the unit but it is something to keep in mind when shopping in the newer buildings.

Understand your view: Understanding your view is very important, but most important for those looking at East Facing units in the Lancaster. If you are in an East Facing unit in the Lancaster and you look down you will see a vacant piece of land. Originally this was going to house roughly 4 buildings. Since the real estate crash however these plans have been scrapped and no new plans have come to fruition. It is highly doubtful that any development will start on this land for at least 5 years, but you should know that it eventually will.

Also note that there are two very prized views in Lake Shore East. The MOST expensive is the view of Millennium Park which can be had from 340 E. Randolph, 360 E. Randolph, 400 E. Randolph, and 155 N. Harbor. The views of the park are not only of the park but also capture the lake as well as the city view along Michigan avenue.

The next award winning view are the views of the River which, while they can be had from The Aqua are most popular in The Chandler and The Regatta.

Possible Rental Restrictions: Due to the timing of the new buildings in Lake Shore East some buildings have rental restrictions in place such as The Regatta and 340 On the Park. The Chandler is also in the process of implementing limitations on rentals which will require you to live in your unit for a couple of years before renting out. These are not necessarily negatives but are simply things to keep in mind when looking at the units.

WHAT ABOUT PRICING?

Newer Buildings: In your newer buildings One Bedrooms will typically start in the low $300′s with the exception of The Aqua and 340 On the Park which will be higher. Two Bedrooms will typically start in the high $400′s and Three Bedrooms from the mid to high $600′s. Of course prices will always vary depending on availability, building, view and square footage as well as upgrades.

Older Buildings: One Bedrooms can start as low $200k with Two Bedrooms in the high $300′s to low $400′s and Three Bedrooms, while much more rare in the older buildings, can be found in the 700 to 800 price range.

Paul Blackburn is an Illinois Licensed Realtor and Broker with @ Properties. He can always be reached via e-mail at Paul@PKBlackburn.com For more information about buying condos in Chicago and what you should know about the Chicago market visit www.BuyingInChicago.com

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First Time Home (Condo) Buyers in Chicago!

June 27, 2012 Leave a comment

It is great to see so many renters turn into buyers in this market. Right now many tenants are deciding to become home owners in Chicago for the first time due to the increase in rent prices. Buying in Chicago is very different than buying in any other market as not only the product is different but the laws and even the weather is different than many other cities. With all this being said I have put together a website to help everyone from first time buyers to those buying their second and third homes understand some of the very basics in today’s market.

BUYING IN CHICAGO

www.BuyingInChicago.com

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TRUMP TOWER CHICAGO RENTALS – CONDOS FOR RENT AT 401 N. WABASH

April 17, 2012 Leave a comment

Here is a complete list of available condos for rent in Trump Hotel & Tower Chicago located at 401 N. Wabash

 

STUDIOS

Unit 39F  -  $2,500

ONE BEDROOMS

Unit 70B  -  $3,400

Unit 42E  -  $3,400

Unit 49J  -  $5,500 (1475sf)

Unit 53G  -  $5,950 (1419sf)

TWO BEDROOMS

Unit 46H  -  $7,100

Unit 60F  -  $7,800

THREE BEDROOMS

Unit 78A  -  $11,500

Unit 74A  -  $14,000

Unit 88A  -  $22,000 (6,400sf)

 

Paul Blackburn is an Illinois licensed Realtor and Associate Broker with @ Properties in Chicago. He can be reached 24/7 via e-mail at Paul@PKBlackburn.com whether you have questions or you would like to view any property.

 

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LAKE SHORE EAST RENTALS – The Chandler, The Regatta, The Lancaster, 340 On the Park

April 16, 2012 Leave a comment

Lake Shore East Rentals are always in high demand but as the rental season is heating up units are being rented just as quickly as they’re coming on the market. Here is a full list of Rental Prices and Rental Inventory available in the following buildings in Lake Shore East: The Regatta, The Chandler, The Lancaster, 340 On the Park, The Aqua, The Buckingham

420 E. Waterside, The Regatta – Condos For Rent

JR. ONE BEDROOMS

#612 – $1,850

TWO BEDROOMS

#1103 – $2,800

#801 – $3,400

#3110 – $3,500

#3812 – $4,000

THREE BEDROOMS

#3910 – $12,500 (Furnished)

450 E. Water – The Chandler – Condos for Rent

ONE BEDROOMS

#1504 – $2,100

#2506 – $2,100

ONE BEDROOM + DEN

#910 – $2,500

#806 – $2,600

TWO BEDROOMS

#401 – $3,100

#2211 – $3,850

THREE BEDROOMS

#3009 – $6,250

201 N. Westshore – The Lancaster – Condos for Rent

ONE BEDROOMS

#2603 – $2,000

TWO BEDROOMS

#1007 – $3,300

THREE BEDROOMS

#2602 – $3,600

225 N. Columbus – The Aqua – Condos For Rent

STUDIO

#5604 – $2,075

340 E. Randolph – 340 On the Park – Condos for Rent

THREE BEDROOMS

#4601 – $7,450

360 E. Randolph – The Buckingham – Condos for Rent

ONE BEDROOMS

#3105 – $2,150

#3506 – $2,200

TWO BEDROOMS

#305 – $3,800
PAUL BLACKBURN IS A LICENSED ILLINOIS REALTOR AND ASSOCIATE BROKER WITH @ PROPERTIES. HE CAN ALWAYS BE REACHED VIA E-MAIL: PAUL@PKBLACKBURN.COM 

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THE CHANDLER – 450 E. WATERSIDE TRYING TO CAP RENTALS

February 27, 2012 26 Comments

The condo board at The Chandler at 450 E. Waterside in Lake Shore East is attempting to pass a “Leasing Restrictions Amendment” also known as a rental cap. Over the weekend I was in the building on showings and ran into an owner who gave me the flyer below. Here are the sum of the details followed by my thoughts on the matter.

According to the letter I have, 135 units are leased at the Chandler which represents 44% of the units. The letter states that if this measure passes then unit owners would have less than a 50% chance to get a “leasing license” for the first 3 years and less than a 20% chance thereafter. The letter goes on to state that the writers are NOT in support of a rental cap and it is their belief that prices will decline in the building as those who cannot rent out their units will be forced to sell. Why then is the board trying to pass such a measure? The letter states that less rentals in the building (likely a cap around 20 to 25%) will ease financing for buyers and refinancing for current owners. For a quick explanation of the proposal which I have read please see the bold print below.

To keep this blog 100% fair below are the benefits as said by the Board of Directors of the Chandler Condominium Association in a letter sent to owners dated February 16 of 2012.

- The implementing of the amendment will allow current owners, as well as new owners, to easier refinance their mortgages or obtain premium lending rates with a lower rental percentage.

- Implementation of the amendment will help maintain property values, which is important whether you are a live in owner or use the unit as a 2nd home or currently rent.

- Implementation of the amendment will reduce the amount of move ins and outs causing less wear and tear on the building, elevators and staff (We average about 64 moves a year).

- Implementation of this amendment will also lead to our building being more secure. Less turnover means more owners living and staying in their units.

Here are my thoughts: It is true that rental rates at or less than 20% make it easier to obtain financing in the building. Furthermore, it does open up refinancing options for current owners who want to refi to a lower rate. However, there is a large problem here being overlook by the board trying to pass this regulation: Many people NEED to rent their units. The building currently has 44% of the units leased. If this number is decreased, to lets say a conservative 25%, this means that 19% of the building, which equates to 58 units will NOT be able to lease their units. What will these people then do? Use it as a weekend place? Or will they simply just list it for sale and cut their losses? Even if only 30% of those who could not lease their units listed them for sale it would still add 16 units to the market. Currently there are 6 units on the market in the Chandler that are not under contract or temporarily off market. This means this measure could easily triple the supply in the building. If every single unit that could not rent was placed on the market supply would increase by almost 1000% or more if the building limited the number of rentals to only 20%. Now as we know the 20% limitation will not be fully enforced until 2015, but in 2014 those owners who will not be able to rent their units will have a decision to make as their leases expire. Furthermore, what about the current owners who rent their units who will not be lucky and obtain a leasing license?

The Board also mentions that there is wear and tear on the building due to increased moves. This can easily be solved by increasing the move in fee for a tenant. If this is truly a major concern, increase the move in fee to pay for the wear a tear. A deposit is also held for the elevator as well as any hallway damage. Perhaps the association just starts to get much tougher on checking the hallways for damage after a move in/out.

On the surface limiting rentals may seem like a good idea. In some buildings this concept can work to sustain a healthy building. However in the case of The Chandler we see there is a need for unit owners to be able to rent their units out. Many owners would be negatively affected by the passing of such a measure. When almost 50% of the building depends on leasing their units such a measure WILL create a great OVER supply in the market place. What this will do is push the weak owners to the bottom. Those owners who cannot afford to hang on and wait for a buyer will need to lower their price in order to be the cheapest unit of their kind. Imagine if you have several owners in that position who all have similar units? They’ll compete against each other in price and drive the market down.

The fact of the matter is, this is not speculation! This is not just a hunch that I have. This is plain and simple economics. The numbers don’t lie. Why is it then that sometime rental caps work in buildings?

Rental caps work in buildings where there are only a few units going over the limit and messing it up for everyone else. Lets say that you have a building where just over 20%, lets say 21% of the units are rented. Because of this many people cannot refinance and some  buyers cannot obtain financing. Passing a rental cap in this instance may make sense since only a couple units would be affected and the majority of the units renting their units will still be able to. In this instance you would also have a great net benefit to the majority of the building. You would in this case keep “fire sales” to a minimum and can probably build in exceptions into the ruling in order to accommodate extremely distressed owners. However, in the case of the Chandler we are talking about 44% of the building, 135 owners who have leased out their units. This shows a clear NEED of owners having the ability to rent out their units.

As an agent who has represented buyers and renters in the Chandler I oppose any rental cap that would greatly discourage buyers from buying and put owners in a position in which they would feel they need to sell their unit. I do not believe there will be a net benefit to the owners if the “Leasing Restrictions Amendment” is passed. Instead, I believe there will be grave negative consequences to the price sustainability of the Chandler for years.

Lastly, at the end of the day the market is just that, the market. The values of a unit are not dragged down because of renters in a building. They are dragged down because the market has dictated that unit owners have 1 or 2 choices: Sell their units or Rent. If the market place is such that unit owners choose to rent instead of sell then the renters are simply a symptom of the market. Implementing any kind of amendment which attempts to force the hand of the market will never work.

UPDATE: Since posting this blog additional information has come to my attention regarding the rental cap proposal for The Chandler. According to additional information I have received 135 Leasing Licenses will be distributed and will be good for 3 years.  If there is any additional information you believe I should know about this proposal please feel free to share below. Given some of the responses I have received on this blog and via e-mail here are my additional thoughts and questions. Keep in mind I am not an attorney so my interpretation of the amendment is only that and is not meant to be taken as any legal advice.

1 – 135 Leasing Licenses will be given to owners on a lottery drawing basis. This will be a 3 year license.
Currently there are 135 units leased in the building. The obvious intention is to give everyone who is currently leasing their unit a leasing license. However, how will these licenses be distributed? Will other owner occupied units sit idly by and give up their right to lease their unit? If I owned in The Chandler and lived in my unit I would still want the right to lease mine out so I would want a license which brings me to my next question….

2 – Does the license need to be used right away? For instance if I am granted a 3 year leasing license must I rent my unit out for 3 years (in order to insure that only those who truly need it will get one) or can I keep it in my back pocket in case I have the need to move? This is a concern I’m sure many landlords may have in the building. It appears from what I have read that unit owners must apply for the leasing license lottery in writing. If they are chosen they will be granted the 3 year license but it does not appear they will be forced to lease their unit out.

3 – I’ve received several e-mails that have mentioned a 3 year license. This brings to light my next question: Can owners who have the lease license enter into 3 consecutive 1 year leases to different tenants? From what I have read the answer is Yes. The 3 Year Lease license allows the landlord to rent his or her unit out for normal duration during this 3 year period. 

4 – It appears that a new round of lease licenses will be granted in coming years. This new round of licenses (drawn in 2014) for 2015 will apparently be less than the 135 currently proposed to be granted. If so, What will the new percentage be? It appears 20% will be the new percentage.

5 – What if, over the course of the next couple years, several owners need to move. If they cannot sell their unit and are in some sort of financial distress because they cannot rent their unit, will any exceptions to the rule be made? Can a temporary leasing license be granted? Those who have not received a leasing license may appeal and present their hardship situation which will be reviewed by the Board of Directors on a “Case by Case Basis.” The problem is there needs to be some guidelines put into place WITH the amendment which defines true “hardship.”

6 – 49% That is the magic number for tenant occupied units. When any building moves above that options such as FHA may go away and other serious buyer financing and re-fi issues may arise. Has this at all been discussed? I’m not sure if this has been discussed or not, but I would recommend it be brought up.

Many have said that it is wrong of me to assume the market conditions in 3 years when the number of leasing licenses will be granted. I do not know what the market will be like in 3 years; I have not a clue. But neither does anyone else. I always tell my clients to plan for the worst and hope for the best. Given that I have now read all the facts of the amendment I still do not agree with it. While I do not live in the building I must say, if I did live in the building I would vote against this proposal.

What I do know is that when I first started in the business clients would ask “What do you think I can sell this for in a few years if I get transferred or if we have a baby and need more space?” I haven’t heard that question in a while. The question I hear so many times now, is “What can I rent this for if I have to move?”

I understand that this is a hot button issue. This is an issue dealing with a very personal asset, the home where many of you live. For many others this is an issue because it threatens something that they thought would always be there no matter how bad the resale market would get; their ability to rent their home. If there is any information that I do not have or was mislead by please present it to me. My e-mail is below or you can comment directly on this blog. All facts for such an issue must be presented with complete transparency. Any guarantees made should always be in writing and in any proposal. There are many buildings going through this very same issue, including my very own. Each building is different but in most instances the basic economics of such a decision are the same.

Paul Blackburn is a licensed Illinois Realtor and Associate Broker with @ Properties. He can be reached anytime via e-mail at Paul@PKBlackburn.com

Filed under Downtown, Lake Shore East, Leasing Tagged with , , , , ,

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