Chicago for beginners: lakeside units with taxes paid

Obama's hometown of Chicago is awash with positivity. Irishman Paul McGlade wants to harness it to sell apartments at discount prices, writes Orna Mulcahy, Property Editor

CHICAGO IS celebrating - its own Barack Obama is president elect of the United States and a wave of positivity is sweeping through the city of three million people.

Irish entrepreneur Paul McGalde is hoping to capitalise on that positivity by selling a batch of apartments in one of Chicago's oldest buildings, 1400 Lake Shore Drive, a 1920s high rise overlooking Lake Michigan a few blocks from the landmark Hancock Tower on Michigan Avenue.

With studio units starting at €89,900 and one-bedroom apartments from approximately €200,000, the prices have been pretty much cut to the bone, says developer Bob Mosky, a veteran of the city's real estate scene who bought the historic building two years ago and has spent $20 million refurbishing it.

He has since sold on most of the 391 units, with any remaining apartments now rented out.

Approached by McGlade through the Matt Garrison estate agency, Mofsky agreed to offer 20 units in the building to Irish buyers at a discount of 15 per cent.

As a further incentive his company, RDM Development, will pay annual real estate tax of 1.5 per cent for three years. McGlade, a partner in the Molesworth Street-based mortgage company ACAP International, says nine of the units have already been reserved by private clients.

A skyscraper in its day, 1400 Lakeshore Drive was built by the Wrigley family in the mid-1920s, but was abandoned by them after the stock market crash of 1929.

Since then, it has changed ownership a handful of times. Now a major refit is near completion and the majority of the units have already been sold to a mix of young owner-occupiers and local and international investors.

One London buyer bought an entire floor of one and two-bedroom units. Others have been sold to couples living in the greater Chicago area who use their apartment as a city base for nights out.

The location is excellent, close to the commercial centre of Michigan Avenue's Magnificent Mile, and also within strolling distance of the Gold Coast neighbourhood with its boutiques and restaurants, including Gibson's famous steakhouse on Rush Street where Obama uses the upstairs private diningroom. The building overlooks one of the Chicago's most expensive addresses, Astor Street, where houses are valued at between €6m and $12m. Inside, 1400 has some wonderful features - a vast, Gothic-style lobby with round-the-clock concierge desk, a dry cleaners and food store and a large premises earmarked for an upscale restaurant. One of Chicago's most exclusive hair salons is also accessed from the lobby. These kind of facilities aren't unusual in Chicago where sub-zero conditions in winter keep people indoors. The large basement laundromat, gym and guest event room - which you can hire to have a party - are also fairly common in older apartment blocks, as is the extra large goods lift for furniture deliveries. There's even a mail chute on each floor from which letters fly down into a US Mail box and gets collected twice a day. Best of all is the rare rooftop terrace which is shared by residents.

Most of the apartments in the building have already been refurbished, but a small number are still available in near original condition, with vintage metal kitchen units, 1920s-style bathrooms, and parquet flooring.

Interestingly, most of the units are already rented out, with the Matt Garrison agency managing lettings. Tenants are 30-something professionals, while one investor rents his units out as short stay lettings to tourists.

The apartments themselves are spacious, and most are angled to offer views of the lake. The best have full-on water views, while in others you can get a slice of the lake and courtyard views, or a full view over the city. Immediately behind the development in one of the city's most expensive neighbourhoods, townhouses change hands for $12m-plus.

Irish buyers have a choice of several apartment types and sizes. Studio units with 33.4-48.5sq m (360-522sq ft) start at €89,900, at the discounted price. These rent at around $850 (€653) per month, says Garrison. One-bedroom/

one-bathroom apartments with 48.3-69.7sq m (520-750sq ft) of living space are priced from €135,750 with the discount, while two-bedroom, two-bathroom units with up to 98.2sq m (1,057sq ft) are priced from €211,318 and could attract rent of $1,750 (€1,345) per month.

Larger three bed/two-bath apartments with 143sq m (1,540sq ft), with a projected rent of over $2,000 (€1,538) are for sale at €328,085 - a saving of €57,897 on the original price, according to Acap.

The reasonable sounding prices may attract buyers who still feel priced out of the Irish market, says McGlade. "It's also an ideal passive investment for someone with money looking for a safer bet than the stock market at present."

The ideal time to buy property in the US was probably in the spring when the dollar hit an all time low against the euro. Now, with the euro weakening, you don't get quite so much bang for your buck. However, on Lakeshore Drive, prices are holding their own, says Garrison.

"There are very few locations as good as this in the price range," he said.

Chicago's real estate market has been dominated by two very large projects in the last 12 months. Dubliner Garrett Kelleher's 150-storey Spire has been delayed by the credit crunch, and its architect, Santiago Calatrava is suing for around $11 million in unpaid fees. Donald Trump's 92-storey Trump International Hotel Tower Chicago has also run into funding difficulties with many of its apartments unsold.

info@acapgroup.com