Three South Loop condo buildings, left with so many unsold units in the bust years that they were vertical ghost towns, are being brought back to life together by a company that bought 504 units from their original developer in a “deed in lieu of foreclosure” deal.
The time is right for a restart on condos, said Curt Bailey, president of Related Midwest, which bought the 504 units last June for an amount that the parties to the deal won’t disclose. “There are [several] years of pent-up demand for downtown condos,” Bailey said Tuesday, “but there’s no new product.” Appraisal Research Counselors announced last week that 4,675 downtown condos sold in 2012, leaving just 1,104 unsold new units—down from a glut of 8,000 five years ago.
As evidence that demand is strong, Bailey noted that the company already had contracts for 40 of the 504 units prior to last week’s official launch of sales at the trio of buildings under the banner South Loop Luxury by Related. (Only one of those sales was to friends or family, he said.) As a result, the company has already raised prices on some of the condos; in one group, the price has gone up twice, to about 8 percent above where it was to have started. Prices are below boom-years pricing, Bailey said, but he declined to give specifics, saying each unit had been priced on its own for today’s market. Yo Chicago recently made some comparisons that suggest Related’s asking prices are about 75 percent of the old prices.
Related is also reviving another ghost of the boom years at 111 West Wacker, and it is nearing completion of a Streeterville apartment building. The company is clearly anticipating better days in downtown housing. “It’s based on lot of really good empirical data and historical trends in the market,” said Bailey, who called the downturn years “outliers.”
Bailey showed me around the first-finished of the trio of buildings, a 30-story tower at 1901 South Calumet Avenue formerly known as Museum Park Place II and now renamed Harbor View. Click through the photos below for a tour.