May
13

There’s No Place Like an Almost-New Condo

May 13, 2014
Medinah on the Lake

Craig and Cathy Howard chose a two-bedroom condo at Medinah on the Lake in Bloomingdale that features the development’s original finishes. (Chuck Berman, Chicago Tribune / May 4, 2014)

Talk about bad timing. Hundreds of Chicago-area condominiums hit the market just as the real estate bubble burst. But after languishing for years, it appears these developments are rising in demand.

While many interiors have been lavishly updated with high-end, sleek finishes, some retain their original style, including wall-to-wall carpeting and light oak cabinets. If you think it’s a challenge for property owners to sell the condos, think again. Not everyone is in the market for newly built units.

Buyers are finding they can live with the original designs, but more importantly, the lower price tags.

At some properties, the new and almost-new condos are selling at an equally brisk pace, which doesn’t surprise Gail Lissner, vice president of Appraisal Research Counselors, a Chicago-based consulting firm. “They don’t scream older when you walk into them,” she said.

Consider Related Midwest’s South Loop luxury collection, comprising The Grant, a 298-unit building at 1201 S. Prairie Ave.; the 275-unit Adler Place, 1629 S. Prairie Ave.; and the 296-unit Harbor View, 1901 S. Calumet Ave.

The real estate developer took over the three previously stalled high-rises in 2012, redesigning common areas and amenity spaces. Related Midwest kept units that were finished in 2007-08 and packaged them as Classic Residences. Condos that were never finished, fewer than half of the units, were given the latest features and finishes and labeled Signature Residences.

Classic Residences feature an array of finishes, including granite counters, professional-grade stainless steel appliances and spa-like master baths. Signature Residences have gourmet kitchens with quartz countertops and master baths with natural stone floors and custom cabinetry.

At The Grant, Classics are priced 8 percent less than Signatures. At The Adler and Harbor View, they are 5 percent less.

“As we were doing our market research, we found there was continued demand for the transitional or traditional look of the Classics,” said Related Realty President David Wolf. “I don’t know one instance where people are doing major changes or updating (Classics). They’re finding units they like and staying with them. They like a more traditional-finish product.”

Jean Norris and her husband, Vince Norton, chose the Classic design when they moved to Harbor View a year ago.

“It was the warmth of the Classic, the very warm colors, darker wood and granite, coupled with higher-end stainless appliances,” she said. “It never even occurred to me it was not new. It’s very much in style.”

The Columbian, another South Loop condo building, at 1160 S. Michigan Ave., was completed in 2007 with all 220 units sold, said Garry Benson, partner in the building’s Chicago-based marketing company EMS/Garrison. But only 70 percent of units closed before the economy tanked. All of the units had custom finishes chosen by their buyers from 2004 to 2007. EMS/Garrison updated some residences and left others unchanged.

“In some cases, they weren’t marketable with the original design,” Benson said. “In those, we made the changes without having a buyer in hand.”

Closed kitchens in some units were transformed into open kitchens. Walls containing pass-throughs and overhead cabinets were removed to open kitchens to living and dining rooms. Units designed as three-bedrooms became two-bedroom-plus-den via sliding glass pocket doors. Updating cost the building owner $20,000 to $25,000 per unit. Buyers choosing almost-new units reaped discounts of about 5 percent, Benson says.

The rollout of condos at the wrong time was not limited to Chicago. For example, Medinah on the Lake in Bloomingdale was completed in 2008, said sales director Matt Hollman.

When the recession unfolded, half the 116 units had closed, but half were unfinished and unsold. They remained that way for five years. Foxford Communities bought the 72 units remaining in 2012 and finished 60.

In 12 units, Foxford retained original finishes, including carpeting throughout living areas and stainless steel appliances. On the rest of the condos, “we came in and did a much more 2012-13 finish,” Hollman said. “They’re not ultracontemporary, but do have hardwood flooring in living areas, with carpet only in bedrooms.”

Other upgrades include elongated porcelain tile floors in bathrooms, undermount sinks and subway glass tile in all tub-shower surrounds. Kitchen cabinets are 42 inches instead of 36. Condos with original finishes were priced about 10 percent less than updated ones. “I’ve sold every one of them,” Hollman said.

The older interiors at Medinah on the Lake appealed to Cathy and Craig Howard, who will move into their new condo in June. They saved $20,000 on a two-bedroom, two-bath-with-den residence and appreciate the original style.

“The finishes are very comfortable to us,” Cathy said. “We like Formica. We like carpeting. Those are features we’re used to.”

She’s not impressed by upscale finishes like granite and stainless steel. “I am not my kitchen,” Cathy said.

Josephine Kaszniak also bought a condo at Medinah that was not updated, and said her home still looks modern. “I wouldn’t think of it being outdated at all,” she said. “It’s a little cheaper, definitely. And this way I can make it my own, right?”

Wolf Ridge Condominiums in Northlake is a 60-unit condominium that was completed in early 2008 by the developer, the city of Northlake. About 15 to 20 units closed; the rest remained unsold and unrented when the housing market collapsed.

“We came on board in 2012,” said Terrie Whittaker, brokerage operations director for Catapult Real Estate in Chicago. “We thought a rent-to-own program would be a good way to get people in the door who didn’t have down payments.”

Some units sold as is, “and people were fine with the way they were,” she said. “But as we got deeper into marketing, we realized we were competing against newer products with more contemporary finishes. … We updated about half a dozen of the units. And we were able to get some more sales momentum.”

Original units have 42-inch oak cabinets, a garbage disposal, black or white appliances and a full-size washer-dryer hookup. Sixth-floor penthouse units were updated with granite countertops, stainless steel appliances, five-burner gas ranges and granite kitchen islands.

The original units proved popular because of a lower starting price, $135,000. “The reason we were able to sell those is they had never been occupied,” Whittaker said. “People liked that idea. Yeah, the appliances were a little dated. But it was a good value proposition.”

This post originally appeared on ChicagoTribune.com on May 12, 2014. To view the original story, click here.

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