chicago-condos & Chicago Real Estate pcherry on 25 May 2011 11:15 am

More Condos Could Switch To Rental

May 25, 2011 - Yesterday we talked about how the high number of Chicago real estate developers switching their condo towers to rental, selling bulk blocks of units to investors who lease them or developers scrapping projects altogether is helping to reduce the number of excess unsold downtown Chicago condos.

A recent Crain’s article quoted a new report from Appraisal Research Counselors as saying that, “Not knowing whether the bottom has been reached in prices, concerned about the continued weakness in the economy and job market, and finding it difficult to sell existing residences and finance new acquisitions, many people are opting for the easier decision — to rent.”

Some of the developments we are keeping an eye on are Silver Tower, where 82 unsold condos are up for sale both in bulk and individually. That deal could be a prime target for investors who will lease the units.

Another tower with a lot of unsold condos is 235 Van Buren. CMK Development, the developer of this his 46 story, 714 unit tower, is currently suing buyers of 27 units who either haven’t or can’t close their sales contracts. Only 357 condos have closed, according to Appraisal Research Counselors, and 123 are under contract. Prices start at $189,000 so there isn’t a lot of wiggle room and it’s certainly a possibility that the developer could find an investor to take the units off his hands and convert them to rental.

Of course everything is speculation until a bulk sale acctually takes place and the new buyer announces a leasing option, but the two developments mentioned above are ones to watch. Unitl then, there are plenty of other Chicago condos for rent.

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