ChicagoDowntown / Loop

Chicago apartments sell at record per-unit price

by Joe Zekas on 3/31/14

Chicago Real Estate Daily reported last Friday that Crescent Heights has acquired 161 apartments that had been rented in the 201-unit Walton on the Park condominium building, 2 W Delaware.

The reported sales price of “about $160 million” included commercial space, parking and a parcel north of the building currently zoned for 261 units. That price would surpass the previous high per-unit price in downtown Chicago, which was a reported $628,000 at 1225 Old Town.

Walton on the Park was built as a luxury condominium and has amenities and finishes that are unmatched in the neighborhood. Available apartments are currently renting from $2,570 for a 1-bedroom, $3,665 for a 2-bedroom, 2-bath a $5,500 for a 3-bedroom, 3-bath. A 4-bedroom, 3 ½ bath apartment is listed at $10,815 a month.

The building is steps from Washington Square Park, a tranquil urban oasis with a fountain at its center.

Note: Park Michigan, The LEX, Astoria Tower and Echelon at K Station are YoChicago advertisers and Crescent Heights properties.

Share:
  • Facebook
  • Google Buzz
  • Digg
  • LinkedIn
  • StumbleUpon
  • del.icio.us
  • Google Bookmarks
  • Live
  • Posterous
  • Reddit
  • Technorati
  • Tumblr
  • email

Related posts:

  1. Will Burnham Pointe apartments sell for $400 a square foot?
  2. 45-story, 264-unit high-rise proposed for Clark and North
  3. Median Chicago condo sales price soars 24% year-over-year
  4. CoreLogic reports Chicago-area home price surge
  5. Aqua resale tries for 46% price increase after a year

{ 6 comments… read them below or add one }

Joe Walker April 4, 2014 at 4:47 PM

This really isn’t a record, Joe, as you didn’t extract the value of the retail and the development site from the per unit price.

Reply

Joe Zekas April 4, 2014 at 5:09 PM

The value of the retail and the development site would have to be well over 40% of the price for this not to be a record.

Do think that’s the case?

Reply

Joe Walker April 7, 2014 at 10:01 AM

Joe,

Yes, I do believe that is the case. The buyers took the 160 units, all the retail space, an unspecified amount of the parking garage, and the nearly 1/2 acre site next door. Optima paid $29MM for a one acre site in Streeterville last year, and while this Walton site is smaller, it’s in a better location, so the intrinsic value of the site is probably at around $50MM.

Realistically, the garage is about $10MM (just based on construction costs) and the retail space (6k sq ft) probably sold for $3k/sq ft (around/or below the market rate in the Gold Coast) and you have an extraction value of $160MM – $50MM – $18MM = $92MM.

$92MM for the apartments alone, that’s $575k/unit.

The previous record price was the 1225 Old Town and extracting the retail (about $20MM) from the $158MM purchase price, that’s about $552k/unit.

So no, I do not believe this is a record sale due to the fragmentation of the building and several other factors (such as the Old Town sale occurring nearly a year ago and the market is even more expensive now, and the fact that all the previous record apartment building sales have occurred as complete building sales, not tranche sales), but yes it is definitely in the top 3 I’d say.

Thanks and I enjoy your blog!

Joe

Reply

Joe Zekas April 7, 2014 at 11:07 AM

Joe Walker,

A “person familiar with the property” pegged the value of the retail at 1225 Old Town at $25M to $28M, according to Crain’s. That brings the per unit price of the apartments, including the parking, down to $520K – $532K, a record at the time. Your number for Walton is $575K per unit, exclusive of the parking.

How is that not a record? The passage of time and rising values have nothing to do with whether one number is higher than another.

Sites don’t have “intrinsic value” apart from what can be built on them. The Walton site, according to Crain’s is 17,180 square feet, well short of a half-acre. According to Crain’s Optima plans to build 400 units, 200 hotel rooms and 60,000 square feet of retail on its one-acre Streeterville site.

I agree that the Walton on the Park site is a superior location, but don’t believe it can ever be developed anywhere near the density of Optima’s site. Your $50M value for the land strikes me as far too high.

Reply

Joe Walker July 17, 2014 at 3:49 PM

Joe,

You were incorrect stating that my $50MM valuation for the site alone was too high. The site sold this week for $70MM, even higher than I projected.

So the recent sale was not a record, so you should probably change your headline!

Joe Walker

Reply

Joe Zekas July 17, 2014 at 9:24 PM

Joe Walker,

I was wildly wrong about the value of the land – if the sale closes at the reported price.

You ignore a critical item in the current Crain’s report: the land was valued in Crescent Heights acquisition at $28M. It also means that the seller at the time and also perhaps Crescent Heights, were wildly wrong about the value of the land.

Even if you use the price at which JDL is reportedly buying the land – $70M – you still have a record sale price of $559K per unit. Do the math on the original transaction in light of the current agreement to sell: $160M – $70M = $90M divided by 161 units. It is, of course, completely illegitimate to use the current price to analyze the earlier transaction.

Tell me again why I should change an accurate headline.

Reply

Leave a Comment

Previous Post:

Next Post: