CMK Companies sold nine condos at 235 Van Buren last month, bringing the number of sold units up to 450 and closed units to 275, according to sales manager Scott Hoskins.
Almost half of those buyers have been first-timers, and many are singles. Most are aged 25 to 35, and are spending $200,000 to $300,000 per unit, according to CMK.
Homes at the Ralph Johnson-designed high-rise at 235 W Van Buren St start in the $170s for studios, the $210s for one-bedrooms, the $280s for two-bedrooms, and the $340s for penthouses. Units feature stainless-steel appliances, oak floors, granite kitchen countertops, Grohe fixtures and 10-foot ceiling heights. Individual garage parking spaces range from $31,900 to $36,900, and tandem spaces are priced from $51,900 to $56,900.
Building amenities 12,000 square feet of commercial space, a dog run, a 24-hour door staff, six high-speed elevators, and a lobby with a 25-foot-tall ceiling and slate, stainless steel and German glass finishes.
wonder if the influx of young buyers will help boost the stale south loop area?
Love the building, considered buying, hesitated because it is such a sleepy corner of the city.
As of now, around 230 out of 714 units have closed. That’s less than 1/3 of all units. 33%.
Based on VERY CONSERVATIVE calculations, the developer is paying
$300/month (average per unit) * 484 unsold units = $145,000 just in assessments to the association EVERY MONTH. Or at least they should be.
Add property tax bills for the second half of 2009 when the building was constructed they’ll have to pay back to FUTURE buyers…and add the construction loan for $160,000,000 due in early 2011.
STAY AWAY!!!
And buy at a development you represent, Jeff?
Pretty sleazy to show up here anonymously and steer people away from what might be a competitor.
No one should take recommendations from someone who doesn’t have the decency to identify himself – or to comply with the legal and ethical principles that require him to do so.
Joe,
I don’t represent any developments. Do you require people to provide their address, phone number, ss# and such to make a comment?
I analyzed the facts about this particular development and gave me opinion based on the facts. Nothing else, nothing more. Now, if you disagree with how I arrived at my numbers, I’d be happy to argue about that.
Have a great day!
Jeff,
You didn’t “analyze the facts” but rather cherry-picked some guesstimates to support a pre-determined view.
What was the source of your closing info, Jeff? Assessment info is readily available – why estimate it? Do you have any fix on the RE taxes on this property?
Also – do you know anything at all about the financial strength of the developer or the status of its loan reserves that enable you to tell people with such apparent confidence to stay away?
You obviously have some axe to grind here. What is it?
These condos seem overpriced compared to some very recent comparables – look at the results from the Vetro auction that took place last year. That’s directly across the street and had higher quality finishes. Pricing needs to be in the $240 – $260 / sf range to make these interesting. Also, a buyer should consider if they want to buy in a building with 700+ units? This is going to mean that when you go and sell, there are likely going to be lots of units for sale competing with yours. On the positive side, the “fixed costs” for running the building will also be spread out over a large number of units…therefore assessments will probably be reasonable / relatively low compared to buildings with 100 – 200 units. Also, I am almost certain that there will be a substantial number of short sales and foreclosures in this building over the next 1-3 years.
trailmix,
Not everyone can predict the future so confidently – because most of us don’t know enough about the buyer profile here to know there will be short sales and foreclosures. Where does your knowledge come from? Or is it just generally blowing smoke?
A less extensive amenity package at 235 should also ontribute to lower assessments.
I think 235 has better floor plans, better balconies and a better overall feel than Vetro, but those are items on which everyone will have their own opinion.
And perhaps my view is biased by the fact that CMK’s a client.
My view that there will be lots of short sales / foreclosures in the coming years is based on the following:
– Calls / inquiries from people who own in the building and bought pre-construction as an investor and now don’t know what to do b/c they can’t get a rent high enough to cover their mortgage + assessments and a TBD tax bill
– An educated guess based on what’s happened with other new construction high rises that were developed / converted over the last few years (The Sterling, 222 Pearson, Vision on State, Vetro, 33 W Ontario, and more…)
– Aggressive financing deals being offered by developer – effectively reintroducing the risk of having minimal equity in your home. What happens when you have to sell in 1-2 years and market hasn’t recovered? And, developer is still selling units, and can probably sell them at a discount to any resellers? You don’t have enough equity left to cover closing costs / commissions, etc..resulting in having to go the route of a short sale
You are right that no one can predict what will happen, but that’s my educated guess…i will gladly revisit this post in 2 years and track how many short sales / foreclosures have taken place in the building.
I disagree on the floorplans with you Joe – only a handful of their floorplans are good. Some of the majorly flawed floorplans – and again, this is my opinion and others may not agree:
04 Tier – they have a dining table right in front of the entry to the living room. 2 bed / 2 baths & a computer alcove in 888 square feet (we are not living in New York)
13 Tier – 2 bed / 1 bath squeezed into 749 sq. ft.
Also, most of their living rooms are 10 – 14′ wide…which is pretty narrow. And, if you have gone into some of their other model units at their other developments (1720 S Michigan)…you will see that their models are often not furnished with “normal” size furniture. I have seen tiny sofas (looks like they are meant for kids) in their model units.
Again, I think this building is attractive at $240 – $260 per sq. ft….just not at the current price levels.
trailmix,
Note that I limited my comments on 235 floor plans to comparisons with Vetro – not praising the floor plans in the abstract, and merely expressing a personal preference.
My initail take on the floor plans was fairly negative – until I actually set foot in the units. The ceiling heights and visual openness give the units a different feel than is apparent from just looking at the plans.
Of course everyone would like a larger unit – but CMK was targeting a price point. From what I hear, we’re likely to see more NY-sized smaller units in future developments.
i also wonder what the walk-away rate will be for this development. 450 sold and 275 closed. Of the 175 that haven’t closed yet, i’m guessing 25%+ of the buyers walk away from their EM deposit
Funny you say this, Joe “From what I hear, we’re likely to see more NY-sized smaller units in future developments.” It reminds me of an interview with one of the Toll Brothers a few years ago (can’t remember if it was print or radio) where he predicted that we would have much more “European” sized homes (both SF & MF) in the future – I think he was using the British model (or, I should say, Britain as a model) for costs and sizes (Norway, for instance, has fairly large, on average, houses, just slightly smaller than the average American house of today).
Sheridan B,
Pat FitzGerald, who’s one of Chicago’s least-known prolific architects talks about this topic at some length in part 5 and, especially, part 6 of an 8-part video interview from several years back.