Potential Increase in Chicago Rental Inventory Fueled by Slow Condo Sales

sudler-sothebys-logo18 June 2009 ? The developer of the 342-unit Lofts at Roosevelt Collection is shifting its units from condo to rentals, ignoring existing contracts with potential buyers. This shift to rentals is not new in Chicago, but is now gaining momentum as developers of large projects balance the losses of continuing to struggle in the sales environment against the equally unattractive option of becoming a rental property.

Many buyers who signed contracts up to three years ago are unable, or unwilling, to close on their units, and developers are being forced to reevaluate their positions. This move is not easy. It requires restructuring of loans and can destroy any equity in the building, since rental properties are worth less than the potential value if the condos can be sold. Additionally, while condo projects are usually made up of primarily two and three-bedroom units with higher end finishes, the bulk of the rental demand is for one-bedroom units, and renters have lower expectations on finishes.

“The good news is there’ll be more people living and shopping in the South Loop,” says Gregory Mutz, CEO of AMLI Residential Partners LLC in Chicago, which owns a new apartment building at 900 S. Clark St. that’s about 60% leased. “The bad news is there is more rental supply in an already competitive marketplace.”

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About Stacy Braack

Stacy is a seasoned real estate professional with a broad range of hands-on experience including first time buyers, investors, luxury homes, and distressed properties. While this may appear to be a scattered set of expertise, she believes the experience provides maximum effectiveness in today's chaotic market, which requires extensive knowledge of all aspects of the industry. Stacy's educational background includes a BS in Industrial Engineering from Stanford University and an MBA in Marketing and Finance from the Kellogg Graduate School of Management. Professionally, Stacy has done everything from operations consulting to city government before she found her passion in real estate almost eleven years ago. It is this passion that drives the most benefit to her buyers and sellers. She is fully committed to your goals - both financial and personal. Her clients describe her as extremely direct, honest, and responsive, and they repeatedly trust her to handle one of the biggest events in their lives. For buyers she works non-stop to find you both a home you will love to live in and one that is a smart investment. Many of her 2008 buyers have realized instant equity in their new homes through 'pit bull' negotiation skills. While the market has been tough for sellers, her listings have sold at a rate above that of the market. Extensive, constant, and extremely high-quality marketing, including both print and internet mediums, support every listing, from investment studios to luxury penthouses. She believes that your goals are her priority and her full-time job. She has built her business on referrals from satisfied clients, and she would love to add you to that list. You can contact her at 773-405-4431 or stacy.braack@sothebysrealty.com

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2 Responses to “Potential Increase in Chicago Rental Inventory Fueled by Slow Condo Sales”

  1. KMK Says:

    Has this been confirmed by Centrum? From what I understand (and I am getting no response from Centrum or the sales office) this is still speculation.

  2. The Condoist Says:

    It is official: Roosevelt Collection is luxury rentals.