Monthly ArchiveAugust 2009

chicago-condos & Chicago Real Estate pcherry on 24 Aug 2009

More Buyers Decide To Rent, Not Own

August 24, 2009 - There is a lot of talk right now about the number of new apartment projects and Chicago real estate developments that are switching to rental. But even with the current flood of new inventory, both existing and new construction, the latest Crain’s report states that occupancy and rental rates at higher-end downtown Chicago apartments has risen for the past two quarters. Much of it is attributed to potential buyers deciding to wait because of uncertainty about their jobs, the economy and declining values of condos and difficulty in securing a loan.

According to data from Appraisal Research Counselors quoted in the article, second quarter rental rates at the top apartment buildings went up to $2.17 per square foot, which is a 2.4% increase over the first quarter of ‘09. Those numbers are still about 4.8% lower than the same period last year, but an improvement non the less, and also includes the free months rent offered by some developers to lock in leases. Occupancy for the second quarter of this year also rose to 93.4% from the 90.9% of the first quarter ‘09.

In all, there have been 2,098 downtown apartments constructed since 2008 and another 2,716 apartments will come online from this year to 2011 with the seven rental projects going up at present. Add in the 342 units at The Lofts At Roosevelt Collection that recently went up for rent plus other condos that have gone rental and the is a lot of inventory.

Two of the success stories mentioned in the article are the Amali building on 900 South Clark Street. The 440 apartments in that tower are 80% leased. And the 474 apartments at Aqua are now over 50% leased, according to developer Magellan Group.

While there are some signs pointing to a slow recovery of the housing market, until buyers feel more secure we may continue to see more demand for apartments and more Downtown Chicago Condos up for rent.

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chicago-condos & Chicago Real Estate pcherry on 22 Aug 2009

Controversial Condos At Pure Up For Rent

August 22, 2009 - It’s finally official; Pure is renting out the remainder of the unsold units in the building. There had been speculation for some time because no set closing date had ever been announced and marketing had all but stopped on the troubled Chicago real estate project. To date, only four of the 67 condos in the tower have actually sold. There are around a dozen units that are spoken for, between the four that have sold and ones that are already rented. The upper floor residences were never finished, so no penthouse units are available at this time.

Sunrise Equities founder Salmon Ibrahim left the tower unfinished and buyers in a bind when he pulled a vanishing act, and even though the project lender went ahead with completing the development, there were too many legal issues still preventing sales from closing.

The eight story Pure, on 1349 South Wabash, has a selection of one to three bedroom units, and renters will benefit from the finishes being left over from the original plan of them being luxury condos. The building will keep the fitness room although it isn’t large, but lose the lounge and Pure Portal, which was the interfacing communication and email gadget for residents.

The one bedroom units at Pure will rent from about $1,400 per month. For a two bedroom, two bath unit you can expect to pay from around $1,750 per month and up. And for the larger three bedroom, two bath condos the rent per month will run from $2,600.

Renting these units may prove to be just as difficult as selling them because of the saturation of apartments on the market right now as well as so many Condos In Chicago listed with price reductions.

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chicago-condos & Chicago Real Estate pcherry on 21 Aug 2009

The Clare At Watertower Fighting For Tax Exemption

August 21, 2009 - Every penny counts it seems, even when you’re marketing luxury retirement condos. And more than a few pennies are involved in the dispute between the Franciscan Sisters of Chicago Service Corporation and the Cook County Tax Assessor, according to an article in Crain’s Chicago Business. The newly built Clare at Water Tower is a 57 story high-rise located on Loyola University grounds that the Sisters contend is eligible for tax exemption, but the assessor denied.

The yearly property tax for Clare would be around $670,000. The Sisters state that because the land the tower was built on is leased from the University and the college actually uses some of the rooms in the high-rise for classes held there, it qualifies for the tax break. The nuns have filed a lawsuit against assessor Jim Houlihan, claiming that they run the retirement tower on the tenants of a charitable organization and that there is no fair way to separate and tax the areas used by the University and those used by the residents and that only the Illinois Department Of Revenue can legally revoke the tax exemption status. Mr. Houlihan’s contention is that the amount the Sisters charge for the condos at Clare make it hard to justify it as a non-profit Chicago real estate development.

The circular Clare, located on 55 East Pearson Street, charges as much as $1.2 million for some of the condos there. Residents don’t actually gain title to the units. That money is refunded to about 90% of the original price if a resident moves out or is deceased. The Clare offers varying levels of independent living and assisted care units.

Senior and retirement housing hasn’t seen the same decline as other types of New Chicago Condos, even though very few claim tax exemption status like Clare.

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