July 2, 2012 Leave a comment
One Museum Park West, located at 1201 S. Prairie, is one of those buildings in the South Loop that has mostly black windows at night and it is obvious that the majority of the units remain unsold. There was great concern over the past year, especially for those who bought into Museum Park West that the remaining units may become rentals. Crain’s Chicago has announced that Related Midwest (currently responsible for building apartments across Chicago) has teamed up with lenders to take over 238 units in 1201 S. Prairie (Museum Park West) as well as 98 condos in 1600 S. Prairie (1600 Museum Park) and 157 condos in Museum Park Place South located at 1901 S. Calumet.
The Good News? Related plans to sell the units! Related does not plan to turn these units into rentals. The first question that comes to mind is: “Will these units be fire sold?” The answer is actually no. While Related has yet to release pricing they do not plan to “drastically” reduce prices according to Crain’s. Instead, they plan to upgrade units with higher quality finishes and appliances along with adding new and more expanded amenities to each building.
A price reduction will be needed to move these units, however, a minor reduction in conjunction with upgrades and new amenities can definitely be enough to spur sales. While the South Loop has very high inventory levels at the current time, there is a shortage of quality inventory. Specifically 1201 Prairie will probably see the most interest due to its location and quality of amenities. The two bedroom plans I believe will be the most desirable as they are small than other 2 beds in 1211 S. Prairie, Museum Parks most prestigious building. The lower price point of these two beds due to smaller square footage will definitely attract buyers especially if finishes are upgraded well to compliment its sister building 1211 Prairie.
This type of acquisition is definitely a positive sign that the market is rebounding. This doesn’t mean prices are increasing but it means that stability is returning to the market place. Stability is key is pushing those on the fence to the buy side. It will be interesting to see what the pricing strategy is for Related on their new purchase!!!