THE CHICAGO IL REAL ESTATE MARKET, AND OTHER THINGS CHICAGO, FROM THE POINT OF VIEW OF A LITTLE WHITE DOG!
That call . . . was it you?
Far too often, it takes nearly half a day for my cell phone voice mail messages to be delivered! I hope I didn't miss your call!
Hey, you dogs! Wanna buy a 3 Million Square Foot Warehouse Building? Right in Downtown Chicago? EZ Access to the Eisenhower Expressway - heck, the huge building even straddles the expressway?
The Old Chicago Post Office on West Van Buren Street closed down in 1996, moving to new facilities across Harrison Street in the West Loop Neighborhood of Chicago.
Mail sort floors, vaults, and offices sprawl across two city blocks here. Structural beams are massive. The ornate lobby off Van Buren Street, with murals depicting the history of U.S. Mail Delivery, is among the many unique building features that got the structure placed on the U.S. Register of Historic Places.
But what would you do with such a large building, in a decidedly down Chicago Real Estate Market, where both financing and possible lessors or condo purchasers for such a project are lacking?
Most recently, the building's lobby was used in the bank robbery scene in the latest Batman movie, "The Dark Knight." At one time, this Post Office was the largest in the world, with more raw floor space than the Sears Tower offers today.
The post office is scheduled to go up for bid, through large Chicago Real Estate Auction House Rick Levin & Associates, on August 27th. The auction will take place in the Chicago Northwest Suburb of Rosemont IL. U.S. Postal Service officials say the service is committed to selling the property, regardless of price.
Potential buyers? Few private developers have stepped up recently, as commercial, retail, or residential development in Downtown Chicago is particularly risky in the midst of a major recession, like we are now experiencing.
Until fairly recently, development firm Walton Street Capital developed plans to develop the Old Chicago Post Office into retail, hotel, and residential space. They would shrink the building in size somewhat, removing some space over the Eisenhower Expressway.
The firm secured a $51 Million financial commitment from the City of Chicago, but they could not find financing for construction during the current economic downturn. The Postal Service has cut ties with this developer. They have said they will try to purchase the massive building at the auction.
One possible bidder - the City of Chicago!Rick Levin, the head of the company handling the auction of the building, says he does not know of specific interest by the city. However, it is not uncommon for municipalities to be interested in large development projects of this nature, especially those that require complex zoning and construction needs.
You know, I might be able to share the building with my Pup Reporter, Gracie Ella Moss, to set up my Lil' Buddy's Blog World Headquarters there. But, man, it would sure cost a ton of bones just to heat the place.
Perhaps I should resist temptation and stay back on the bidding! For now . . . keep my paws out of the ring, so to speak!
The strange, but pleasantly-cool weather continues here in Chicago. More like early May, rather than mid-July, around here!
As the economy continues weak in many parts of the U.S., and retail sales continue to slide downward, many of the largest retailers are using favorable language in their mall and shopping center leases to renegotiate their store rents. Savings to these big chains could be substantial!
Reported in today's Wall Street Journal by Elizabeth Holmes, Vanessa O'Connell, and Kris Hudson, Many retailers are exercising benefits provided by "contenancy clauses," common in many retail store leases. This language lets tenants receive considerable rent reductions, or even terminate their leases, if important tenants in a shopping center close down and leave.
The Chico's Apparel Store chain says it has saved over $8 Million by employing contenancy clauses in its store leases. Charming Shoppes, Inc, which operates Ladies Apparel Stores Lane Bryant and Fashion Bug, figures to save about $10 Million in 2009 in negotiated rent relief using the same provisions.
Often, a mall operator in breach of it's contenancy promise allows the retailer to cut its rent, in some cases, by 50% or more until the departing major tenant is replaced. Many leases allow other tenants to terminate their leases and leave themselves if no acceptable new store tenants are found in a typical one-year grace period.
At a time when many mall and shopping center operators are struggling to stay afloat among record vacancies, clever retailers are using their contenancy clauses to negotiate multi-year reductions in rent, sometimes in exchange for agreeing to extend their lease terms.
For retail stores, rent is among its biggest expenses, often accounting for up to 12% of the store's gross annual revenue. Rents are typically a fixed cost - they don't usually go down as sales do. Declining sales this year may push the rent/gross sales percentage to upwards of 13% this year, according to estimates by Citigroup.
For Chino's, rent as a percentage of sales revenue increased to 10%in 2008, versus 7% in 2006.
Mall and shopping center operators today are suffering through prolonged revenue drops themselves during the current U.S. Recession. According to Reis, Inc., a research company specializing in commercial real estate trends, the average lease rate at non-enclosed shopping centers and strip centers (excluding enclosed malls) in the top 77 U.S. Metro Marketsdeclined for the fifth consecutive quarter during the Second Quarter, 2009. That is the longest string of quarterly declines since Reis began its research in 1980.
In enclosed shopping malls, average store rents fell for the third consecutive quarter during the Second Quarter of this year. Store vacancies have also reached near-historic high levels, as 27 major retail chains, including Linens 'n Things, Circuit City, and The Sharper Image, have filled for bankruptcy within the last year, then liquidated their assets and fled their retail stores.
Even long-time retail fixtures Blockbuster and Starbucks have been aggressively pursuing contenancy clauses and other lease concession provisions in search of monthly rental savings.
Store failures trigger reduced rents across the center, or canceled leases, greater vacancies, and, at the extreme, virtual retail ghost towns in some malls and strip centers.
It's a disturbing trend with long-ranging health implications - not only across the State of Illinois, but in the majority of other U.S. States as well.
According to a study by the Centers for Disease Control and Prevention released yesterday, one out of every four adults in Illinois is what they consider to be statistically obese - those with a Body Mass Index, a ratio of weight to height, in excess of a benchmark score of 30.
Unfortunately, the obesity trend is not headed in the right direction, as reported in the Chicago Tribune Triage Blog yesterday, by Reporter Judith Graham. In 1989, no U.S. State had more than a 15% adult obesity rate, using the benchmark. In 1991, four states exceeded the average BMI mark.
Indiana and Kentucky exceeded the 20% obesity mark in 1996, while Mississippi was the first state where more than 25% of its adult residents were considered overweight eight years ago. In 2005, Mississippi, along with Louisiana and West Virgina, passed the 30% obesity threshold.
As a state, IL is far from the most obese, but the trend toward adult obesity here has been growing at an alarming rate.
According to historic CDC statistics, fewer than 10% of adults in Illinois were considered obese in 1985. By 1987, the percentage of those obese across the state grew to as much as 14%. Seven years later, the estimated obesity percentage statewide ballooned to as much as 19 percent. Today, CDC estimates that as many as 29% of Illinoisans could be in the range of statistically-defined obesity.
When you consider that being considerably overweight increases your chances to contract heart disease, diabetes, and other significant ailments, an overweight populous increases overall health care expenses. One study by the Federal Agency for Healthcare Research and Quality calculates that health care expenses for overweight adults increased to over $303 Billion in 2006, up 80% from the estimated $166.7 Billion expenditure five years earlier.
Younger people, many of whom do not exercise nearly enough, and also gorge on far-too-much unhealthy, fast foods, account for a considerable portion of the obese establishment here in IL. In research released last week, the Trust for Public Health released a study showing that nearly 21% of young people across Illinois are overweight - many, seriously so.
Graham's post offers a link to U.S. Weight Trends, released by the CDC.
Here's our Chicago Market Stats Update, based on data compiled Sunday evening, July 5, 2009.
Despite the wild numbers swings common at the end of the month, especially mid-year at June 30th, there are some encouraging statistics this week.
For the second week in a row, Active Listings have fallen a bit, and Closed Sales were up. Are buyers finally beginning to clear out homes-for-sale inventory, especially properties in distress? Not so fast folks - properties Pending Sale fell nearly 31% last week, in the North and Northwest Side of Chicago Areas we serve frequently.
Average Sales Price is down, but so is Average Market Time, although the Market Time number still remains very high here. Sales Volume - up a bit over last week.
Absorption Rate - the theoretical time to clear existing homes-for-sale inventory, continues to improve, week after week, although it is still at a painful 14.12 months! The percentage of homes sell within anormal six-month marketing time frame improved slightly this past week.
Communities and clients we serve, reside, or plan to reside, in the Chicago Neighborhoods of The Chicago Loop, The Gold Coast, River North, Lincoln Park, Lakeview, Uptown, Edgewater, North Center, Lincoln Square, Albany Park, Ravenswood, Wicker Park, and Bucktown.
Also, these Great Chicago Neighborhoods: Logan Square, Rogers Park , West Ridge, Portage Park, Jefferson Park, Norwood Park, Sauganash, Edgebrook,and Edison Park. Plus All Chicago Suburbs.
SINGLE FAMILY, CONDOS, AND SMALL MULTI-UNIT PROPERTIES - NORTH SIDE OF CHICAGO, NORTH OF ADDISON STREET, WEST OF ASHLAND AVENUE
ACTV LISTINGS JUST SOLD CLOSED EXPIRED
w/e July 6th 4,188 47 91 82
w/e June 28th 4,239 68 77 32
% CHANGE -1.2% -30.9% +28.2% +156.3%
CLOSED PROPERTIES DATA
AVG SALE PRICE AVG DAYS ON MKT TOTAL VOLUME
w/e July 6th $252,762 191 DAYS$23,001,342
w/e June 28th $288,439 202 DAYS $22,209,803
% CHANGE -12.4% -5.4% +3.6%
THEORETICAL TIME TO CLEAR EXISTING INVENTORY (ABSORPTION RATE) -
w/e July 6th -LAST 12 MOS - 16.06 LAST 6 MOS - 17.78 LAST 3 MOS - 14.12
w/e June 28th - LAST 12 MOS - 16.24 LAST 6 MOS - 18.54 LAST 3 MOS - 14.57
PERCENT OF HOMES SELLING IN 180 DAYS -
w/e July 6th - 28.91% (UNSOLD - 71.09%)
w/e June 28th - 28.18% (UNSOLD - 71.82%)
SOURCE: MIDWEST REAL ESTATE DATA LLC, AREA MARKET SURVEY DATA
Call our Team anytime for current trends in any Chicago Neighborhood or Chicago Suburb!
The Chicago Suburb of Highland Park IL. North Shore, along Lake Michigan. Some pretty expensive homes - Basketball Great Michael Jordan lives here! The median home price in this tony suburb, just under $500,000!
Now, however, the village is getting acknowledged for making affordable housing available to certain employees who work in this exclusive suburb, but otherwise wouldn't be able to afford to live here. See an article by Mary Ellen Podmolik in last Friday's Chicago Tribune for more info.
Started roughly six years ago, the Highland Park Community Land Trust has renovated some local townhouses - including 30 at the Hyacinth Place Townhouse Development - and offered them for sale to qualifying community residents - including health care workers, teachers, and certain city employees.
The townhomes feature three bedrooms, 2 1/2 baths, two-car garages, geothermal heating, bamboo flooring, and a "green-friendly" wind turbine that provides common area electricity. Each of the units appraised for $365,000 each, but they were sold for between $165,000 and $239,000. Only one unit remains available for purchase.
How does the Village of Highland Park do this?
The trust retains ownership of the underlying land, and leases the land to the homeowners for $25 per month.
When an owner decides to move, he or she can either sell the home back to the land trust, or market it to another qualifying buyer. A special formula keeps the price of the home or townhouse affordable.
Under this model, the seller shares in appreciation of the property. If there is depreciation, the seller's losses are not as great as they purchased the home for a discounted price to begin with.
There are other breaks for homeowners as well - property taxes are lower, and the buyers are not required to obtain Private Mortgage Insurance on their property.
Continued interest in the program remains high, as homeowner advocacy groups keep trying to find ways for renters to instead own, without getting themselves in over their heads. It also may be just the jumpstart some need to acquire their home affordably, and quickly building home equity and appreciation.
The neighboring community of Evanston IL also has a similar Land Trust. There are two in the City of Chicago, including one serving the far-less-affluent Chicago Neighborhood of West Humboldt Park. Each have enjoyed success.
Please read our post today via BlogChicagoHomes.com.
Wages have gone down! Home Prices have gone down! Even the price of some groceries, especially at Jewel Food Stores across Chicago, have gone down!
But homeowners insurance rates, across Illinois, are, on average, going up, as State Farm Insurance of Downstate Bloomington IL announced an average premium increase of 13% for policyholders here, according to a Chicago Tribune story by Reporter Becky Yeark.
State Farm is the leading home insurer not only in IL, but across the U.S. The company insures roughly one-third of all residential properties nationwide. But come August first for new policyholders, October 1st for those renewing an existing policy, rates will rise!
Individual premium increases will vary from individual to individual, says the insurer. Specific coverage plans and deductible levels will dictate the actual premium a homeowner will end up paying.
On the flip side, State Farm is actually increasing the discount it gives to those who have both a homeowners policy and an auto insurance policy with the company. This multiple-policy discount could increase from its current 17% level, to an average of 20%.
The insurance giant was quick to point out, however, that overall homeowners insurance rates have actually fallen by 4.1% over the past five years. Average rates have see-sawed, up and down, since 2004.
Don't insure your home with State Farm? You're likely not immune to the rate increases. Across IL, competitor Allstate Insurance of Northbrook IL earlier announced a statewide increase in average homeowners insurance premiums.
Attitudes are ever-changing, folks, but this one changing really hit me!
Is it ever simply OK to walk away from your home, and the responsibility of mortgage payments, if its value drops below the mortgage amount you owe?
According to a new survey just completed by the Northwestern University Kellogg School of Management, as reported by Mary Umberger in last Sunday's Chicago Tribune, the answer many gave might surprise you. And it seems dependent on how much a home borrower might owe compared to the home's current market value.
Most people do think walking away from a mortgage is walking away from a serious contract, and a big financial responsibility, and is morally wrong. In the survey, 80% of all respondents simply picking up and leaving a mortgaged home is wrong.
However, many of these same respondents said they would themselves walk away - under what they consider to be "extreme conditions."
Today, many experts estimate that between 20 and 30% of all homes with a mortgage are worth less than the outstanding amount of the loan - a situation commonly referred to as being "underwater" on your house. Many are severely underwater, with home values 50% or less than the outstanding mortgage balance.
For those still able to afford to keep up with their mortgage payments, but significantly underwater, many have come to believe continuing to make mortgage payments on a property worth so much less that what is owed makes no sense. Some have resorted to "jingle mail," a new term coined for those who return their house keys to the lender, rather than continuing paying an underwater mortgage.
In many locations across the U.S., especially in places hardest hit by recent severe housing price declines - parts of California, Arizona, Nevada, and Florida, for example - the stigma attached to the walk-away behavior has softened as foreclosure has hit closer and closer to them. When your close friends and neighbors start walking away, many conjecture, it might not be as morally offensive as they once thought.
Paola Sapienza of Northwestern University, collaborating with University of Chicago Professor Luigi Zingales and European University Institute of Florence, Italy, estimates as many as 25% of all underwater mortgage defaults are not precipitated by personal economic calamity, such as a job loss, a divorce, or an illness. Rather, they are triggered by the realization by the homeowner that it just might make better business sense to simply walk away, instead of making continued payments on an asset likely to continue to decline in value.
The researchers view such action as the moral equivalent of lying to your bank - that's the root issue these underwater owners are contemplating.
Another question - "How will the parents' decision to walk from a home impact how the children would likely make similar decisions down the road?"
That question will likely take a very long time to answer!
Hey, folks, hope you enjoyed the Fourth of July Holiday!
Here in Chicago, it was pleasantly cool - not the norm for early July here. We stayed away from all the big tourist events, watching a few fireworks right here in the neighborhood. Very relaxing, for a change!
For the past 16 years, however, we have kept our own Fourth of July Marketing Tradition alive.
Beginning early in the morning, on the Fourth only, we plant American Flags in about 1,000 houses in neighborhoods we service across Chicago.
My helpers - my wife and Team Member, Sue, on the left, and my mom, Felice, from the Chicago Suburb of Des Plaines IL, to my right. We also enlist a few kids from the neighborhood each year for our annual Flag Planting Event. (BTW . . . Special Thanks to AR Member and Fellow KW Consultant from Chicago, Barb Van Stensel for taking this picture of the three of us!)
That way, when folks wake up on this truly patriotic American holiday, and they walk down their street, they see an "Avenue of Flags" to greet them.
I always get about a dozen positive phone calls, as well as just as many handshakes from neighbors, when my, my wife, Sue, and my mother, Felice, deliver these flags, and plant them, block by block, in the front lawns of hundreds in the neighborhoods we serve.
Of course, every year, we get a call from one or two cranks that are offended by the practice - but we proceed on, uninterrupted, year after year on the Fourth of July.
Any direct business as a result of our Fourth of July Flagging Ritual, or from the other door-to-door, know-the-neighbors activities we have about three times each year?
Not measurably - but, sometimes, when I get a listing or a referred buyer, they mention my prominence and notoriety in their own neighborhood - and that is a good thing, but not the sole reason they called me in.
Sometimes, prospective clients will call me, interview me, say they originally found out about our Team from our door-to-door solicitation - then, surprisingly, use someone else, often times the lower-priced guy or lady covering the neighborhood!
So, the question is, does this old fashioned way of hitting the streets, going door-to-door, and pressing the flesh, right in your neighborhood, still work? Or, is the concept outmoded - there is no place for this old fuddy-duddy stuff in today's world of Twitter, and Facebook?
Have you an opinion, or, more importantly, and trackable sales or listing data?
Happy Fourth, Folks! Please enjoy the holiday - but be safe!
Perhaps you are from Canada. If so . . . Happy Belated Canada Day!
Our Team Member, and my wife, Sue, found a summary of Chicago and Chicago Area Fireworks and other Fourth of July Weekend Festivities for you to enjoy. Here's her overview -
If you haven't had a chance yet to get over to the Taste of Chicago, it wraps up this Sunday over at 100 E. Congress Parkway, in Grant Park.Click here for hours, food ticket prices, music schedule and more.
The 17th annual African-Caribbean International Festival of Life is this weekend as well. Located at 5500 S. Cottage Grove, this Washington Park/ Woodlawn neighborhood festival features two stages of live music along with food vendors, exhibits, games and much more. Click here for prices, hours, music schedule and more.
On a smaller scale, what would the 4th be without B&BQ? Head on over to the Bull & Bear, located in the River North neighborhood at 431 N. Wells St. for some of Chef David Blonsky's BBQ grillings at their sidewalk patio - The BullPen! Click here for menu, hours and drink specials as well.
Finally, for all you fireworks enthusiasts (please leave it to the professionals), here's a run down of displays being offered today, the Fourth of July -
Staying away from Downtown Chicago tonight - it's a madhouse down there. But trying to remain festive, and patriotic!
In this week's Chicago Neighborhood News, Team Member Cathy Mallers covers the Chicago Neighborhoods of Norwood Park, Lincoln Park, Lincoln Square, and The Loop, and the Chicago Suburb of Evanston IL.
There is still pretty of Summer left! Having a party or summertime get together? Let us know, and we'll help spread the word around.
Dean's Team Chicago offers the highest-rated Active Rain Blog in Chicago and across Cook County IL!
Here are Cathy's Chicago Neighborhood Notes -
Fourth of July in Chicago has a slew of events happening. We've chose a few favorites that really highlight not only the holiday but also the neighborhoods that celebrate them.
NORWOOD PARK
Sometimes finding independence has nothing to do with coming to the United States, but going home. That's what Stephanie Andersen-Samayoa found when she relocated from Chicago to El Salvador.
The family's abandoned coffee plantation needed to be reclaimed, the debris cleared and the hacienda returned to its natural glory. Andersen-Samayoa took a leave of absence from work, followed by an extended leave and finally packed her things and moved to El Salvador.
Now you can purchase Finca Los Angeles coffee from her ex-husband, Bill Dugan, at Fish Guy Market, 4423 N. Elston. To read more, click here.
LINCOLN PARK
This weekend is time for the all the 4th of July festivities. Not to be outdone by the holiday is the 8th Annual White Party, which is sponsored by Tommy Z Productions.
The party is going to be at the club Religion, 720 N. Wells. To read more, click here.
LOOP
Fireworks happen twice over the weekend from the Loop area. If you are looking to watch the ‘works from Grant Park on Friday or Navy Pier on Saturday, you can head out to The Terrace at Trump, located on the 16th floor of Trump Tower. To read more, click here.
Not to be outdone, West Loop location Market is also opening up their rooftop to view the fireworks. To read more, click here.
LINCOLN SQUARE
Not to be outdone by the 8th Annual White Party, Lincoln Square's Provenance Food & Wine hosts free wine tastings every Thursday evening. Get your holiday weekend started with a tasting of wines from around the world.
The City of Evanston has an entire website dedicated to its 4th of July festivities. The city is going all out again this year with a parade, concert and fireworks.
The Palatine Concert Band will be back again this year playing our favorite patriotic music and much more from 7:30 pm to 9:10 pm. The parade starts at 2:00 pm. The fireworks will start off Clark Street Beach immediately after the concert.
To read more about all the festivities being offered, click here.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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