More Land Auctions Confirmed for the South Loop

YoChicago sums up the scene on this block well:

The land bounded by Michigan and Wabash avenues and 13th and 14th streets had a rough go during the downturn. On the Wabash side were the sites of

GlasHaus and 1349 South Wabash, both proposed but neither built. On the Michigan side were these two sites: the old Cook County Domestic Violence Courthouse at 1340 S Michigan Ave and an adjoining parcel at 1330 S Michigan Ave, both planned for condos and, again, never built. These two properties will go up for auction this December, according to Crain’s.

Although this isn't surprising, it is interesting. Yes, much of this land has sat vacant and

undeveloped for sometime now, but if you will recall a recent intense fire also quickly brought down one of the buildings on a lot that is now up for sale.

The last thought we have on this is that we absolutely love the county courthouse building (although it was a domestic violence courthouse which is ironic that it would become a residential building) and was really hoping that this would have been developed into condos. It would have certainly been an interesting development and a unique building in the shadow of some unimpressive South Loop high-rises.

South Loop Condo Auctions Prove to be Relatively Successful

We've been following the condo auctions of Michigan Avenue Towers (1400 S. Michigan) and Motor Row Lofts (2301 S. Michigan) for a couple weeks now. This past weekend the auctions were held and they proved to be relatively successful.

The Michigan Avenue Towers auction had more units and was advertising that the starting auction prices for some units were up to 62% off the original list price. The auction came and went and overall 43 units sold for 26% off the original list price (however this doesn't include parking which is still going for $35K a spot). Although that's still a lot off the price, it sounds like the general feeling was that the developer did pretty well. According to a post on YoChicago:

I got the sense that these homes sold for more than many had expected — “The developers have to be thrilled with this,” I heard one agent say. The units sold for an average of $276 per square foot, down 26 percent from an original average of $375 per square foot. In all, sales surpassed $11.2 million.

The other auction at Motor Row, seemed to be successful as well:

The auction was well attended and resulted in the sale of 20 units (several at reserve) at prices ranging from $187,000 to $316,000. You can see more details on pricing from commenter neo at CribChatter.

Although none of this is particularly good for the neighborhood as it drives down real estate comps, at least some of the rates were higher then expected.

"Auctioning Off the South Loop"

The Chicago Journal has a good article about the upcoming auctions for the Motor Row Lofts (2303 S. Michigan) and Michigan Avenue Tower II (1400 S. Michigan).

The most interesting quote was in regards to people who bought before the auction was announced:

Thomas FitzGibbon, executive vice president at MB Financial Bank, said it was safe to assume the units offered Nov. 15 would be sold for less than what the developers originally hoped for.

That could help push home values down, he said, tough for those who bought “at the top of the market in a development that has suffered in sales.”

“Does that mean you overpaid? I don’t know. You may have paid the right price when you bought it,” he said.

Although we've had people tell us these auctions had nothing to do with the Olympics not coming to Chicago, we still think this was a driving factor. If an auction was inevitable, they should have done it prior to the Olympic decision as demand/speculation probably would have been greater (in our opinion).

For some of the older posts we did on this subject here are a couple links:

• Michigan Avenue Tower II Auction Post
  
• Motor Row Lofts Auction Post
• Vetro Auction Post I
  
• Vetro Auction Post II

Two South Loop Developments Still Moving Forward?

It doesn't seem like building new condo buildings in the South Loop would be a good idea right now given the over saturation and subsequent auctions going on, but according to the Chicago Tribune a developer who has gained success from some Chinatown projects is still moving forward with two projects in the neighborhood.

See Wong, owner of the Wabash Development Group, has two properties that in or very close to the South Loop that sound like they're still moving forward. To be honest, we were under the impression his planned building at 1349 S. Wabash was off the table, but the article makes it sound like it is still moving forward (however no time frame was mentioned in the article).

The Grand Imperial Hotel at the corner of Clark and Archer (on the fringe of the South Loop depending on who you talk to) looks like a unique piece of architecture that could bring some interesting character to the neighborhood. We had a post on the development a couple of months ago which includes a video and interview of Wong. According to the Tribune article this is scheduled to break ground in 2010.

So why move forward with two new projects in the current environment? According to Wong it's because he caters to a different buyer and market:

While many builders have yielded to the recession, Wabash is thriving, says Wong, because the neighborhoods where he builds -- primarily Chinatown and Bridgeport -- serve an influx of immigrants. "There isn't an oversupply of housing here, especially of condos that cost less than $300,000," he reports.

Wabash developments that serve the Chinese-American market have units that are small by intention, says Wong. "In China, an 800-square-foot condo is a luxury condo," he explains. "So, here, this community wants small units." While his buyers do want nice finishes such as hardwood floors and granite countertops, he says, they are willing to forgo extras such as fireplaces, whirlpool tubs and balconies to minimize their home prices.

Although we're still skeptical about anything going up in the current environment, maybe Wong is right. We will continue to follow this and see if these developments actually happen.