Dec 17, 2008
Housing Bulletin
Housing Bulletin: Cancelled Condo Tower Gets a New Lease on Life
Last week an apartment developer announced that it is starting construction on a 21-story River North building whose site, architectural plans, and name—Parc Huron—it bought from the condo developer Lennar, which cancelled the project eight months ago. But that doesn’t mean the project will change all that much. “It had already been through the permitting process with the city,” says Tony Rossi Sr., a principal at the apartment company M&R Development. “You don’t want to start making changes that are going to take you back to the beginning of that process.”
The exterior of the building, at 469 West Huron Street, won’t change at all, and inside, there will be only a few modifications to the floor plans of the 221 residential units. “Some units had an additional half-bath and a sort of awkward closet, so we eliminated the half-bath for more closet space,” Rossi says. “But that’s a subjective choice we made.” Other details of the interiors—high ceilings, hardwood floors, stainless steel and granite in the kitchens—will all go ahead as planned, Rossi says.
The lobby will get smaller, to accommodate office space for leasing and building management. In the basement, M&R has reduced the number of storage lockers to make way for a residents-only spa that will include a whirlpool, a steam room, and a massage room. (The massage room is not staffed; residents who don’t want a massage therapist coming to their private apartments can have their sessions in this room, Rossi explains.) The number of parking spaces will also be reduced, from 235 to 221, and renters will lease their spaces, not own them.
Rossi’s company got a good deal for the site and architectural plans, which makes those hardwood floors and other luxury finishes more affordable. (Keeping those plans in place also makes any future conversion back to condos that much easier.) Lennar paid $9.5 million for the site in March 2008; it cancelled the project in April 2008 and sold the land to M&R for $8.1 million in November. Rossi would not say how much his company paid for the plans and other documents related to the project.
With his partner Thomas Moran, Rossi has built about 3,500 units of rental housing in the Chicago area over the past decade; they also manage about 8,000 units. Rossi says that he will be looking for other condo-to-apartment deals, but that most condo plans can’t be modified as easily as at Parc Huron. “A lot of condos are too big to make the rental numbers work,” he says. “You’re usually better off starting from scratch”—which is what his company will do with the 321-unit rental tower the city recently approved for the southeast corner of Lake Street and Wabash Avenue in the Loop.
Posted at 08:15 AM in Housing Bulletin | Permalink
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Reader Comments:
n March last year I attended a fancy launch party in Hollywood for The Madrone, a 180-unit condominium project situated at the corner of La Brea Ave and Hollywood Blvd. The multi-story mixed-use project being developed by John Laing Homes, has a variety of studios, 1, 2 and 3 bedroom condos ranging in price from the $400,000's to over $1 Million.At the time of the launch I had clients that were interested in a 1 Bedroom condo which was priced at $640,000 (approximately 1000 sq ft) and despite my opinion that the price was high, they signed a Purchase Agreement. As our negotiations proceeded with the in-house sales representative, it appeared that the specifications of finishes kept changing and no-one at the sales office could give definitive answers to my questions.What concerned me (as the Buyer's Agent) was that the developer was offering to release 50% of the selling agent's commission from the Buyer's Deposit upon the issue of a loan pre-approval from their preferred lender. Since this was in April 2008 and the project was only to be completed in March 2009 I was concerned for several reasons....What if my client's loan was not approved at the time the project was completed? Would my client loose their deposit becasue the commission had been paid out early? And what if the building was not selling? Would my clients be one of a handful of sales in a 180-unit building? And what if prices were reduced? Would my client's unit appraise for the required mortgage? And if it didn't appraise, would my clients need to come up with an additional amount for the downpayment...?see more in Toronto Condo