The developers of two South Loop condo high-rises less than two blocks apart struggled through 2008 as they tried to sell units in the buildings. Then, this March, a big block of condos in one of the projects went on the auction block. The result was a flurry of sales not only at that building but, later, at the neighboring project.
“We had been thinking about the possibility of an auction, but we missed the boat,” says Bob Horner, a co-principal of Winthrop Properties, which developed Printers Corner, a 17-story, 88-unit building at 170 West Polk Street. After 20 condos were sold there in the first nine months of 2008, sales stalled. Between October 2008 and March 2009, there were only two more sales, and the final 19 units weren’t moving. The developers had tried other recessionary sales incentives, but they were reluctant to go the auction route. “Then the question was settled for us,” Horner says.
On March 7th, the developers Roszak/ADC auctioned off 45 condos—five more than had initially been put on the block—at Vetro, their 31-story, 232-unit building at 611 South Wells Street. The auction brought in $12 million in sales and established new prices not only for Vetro but for the neighborhood as well.
Just prior to the auction, prices at Printers Corner had averaged about $295 per square foot, Horner says, already down from the peak asking prices of about $330 per square foot. At Vetro, the average asking price just before the auction was $353 per square foot, but successful bidders brought that down to $258 per square foot. Vetro changed prices on the remaining units to bring them in line to the benchmark established at auction.
In one day, Printers Corner, which has fewer in-building amenities and, because of its shorter height, less dramatic views than Vetro, went from being the lower-priced alternative to the pricey neighbor. Horner’s company took the hint. “We weren’t thrilled with the prices they were achieving, but we thought we could leverage off the interest they had generated,” he says. The Monday after Vetro’s auction, prices at Printers Corner were cut on average to about $280 per square foot. “We think we have some differentiation,” Horner says. “They are a very avant-garde look, and we’re a traditional look—urban, but traditional.”
The price cuts did the trick. Since mid-March, 17 of the 19 remaining condos at Printers Corner have been sold, and Horner says deals on the last two units appear imminent. “We expect to be sold out by the end of the month,” Horner says, chuckling at the thought that, in 2006, when Printers Corner was under construction, he expected to have all units sold by the time the building was completed—in November 2007.
photo courtesy of Winthrop Properties