Magellan's Lakeshore East: Halfway Home

Second of Three Parts

By purchasing a 28-acre site in downtown Chicago on which to create Lakeshore East, with its 5,000 homes, Magellan Development had undertaken a huge risk that day in June 2002.

To buy and improve the land, the developer had borrowed $70 million. Every second of every day, dollars were dropping as rapidly as grains of sand in an egg timer.

And most of the responsibility rested on the young and relatively inexperienced shoulders of Magellan’s vice president, 40-year-old David Carlins, son of Magellan’s founder, Joel Carlins.

The most pressing challenge was to prepare the site for construction of a dozen or so high-rises. Before the first one could be started, roads had to be built, utilities installed, the six-acre park completed. The plan would have to be implemented like a puzzle, often in a specific order.

To prepare the site and construct the buildings, Magellan hired two major contractors, both local, family-owned companies Magellan had worked with previously. The first was McHugh; the second was Walsh. “Having competing contractors working side by side keeps them honest,” David explains, with a grin.

By 2004, most of the site work was done.

The next challenge: To sell enough units to get the loan for the first building, a 209-unit condo named The Lancaster. What kept David awake at night was the same question that had caused him to vote against the project: Who in their right minds would want to move into the first building?

Sure, it would be a beautiful high-rise in a convenient downtown location with views of Lake Michigan and the park, David reasoned. But most units would overlook a sometimes muddy, oftentimes noisy construction zone. Each buyer would have to take a huge leap of faith.

Magellan estimated that it would take 18 to 24 months to sell the 209 units. The company had never sold condos to 30- to 45-year-olds before, always to younger buyers. Because a recent project had attracted too many investors, multiple purchases at Lakeshore East were prohibited.

Initially, in July 2002, sales were slow. Then they picked up and Magellan sold the 50% required to qualify for financing. Within ten months, the project was sold out--eight months before the most optimistic projection.

Why? The market was much broader than expected. Buyers were coming from not only the entire metropolitan area, but from all over the state and the world.

What Magellan hadn’t counted on was the powerful impact of two new factors: the Internet, which allowed buyers the world over to see the vision outlined in the master plan; and Millennium Park, which opened nearby with great fanfare in July 2004, four months before the first buyers took possession of their units in The Lancaster.

"Our immediate success was pure, dumb, blind luck," David confesses. "We ended up being equal distance from Chicago's two busiest venues: Millennium Park and Navy Pier, with Michigan Avenue, and the Central Business District, within walking distance.

The surprising success of Millennium Park changed everything. From around the world, it brought attention to Chicago, and everyone, it seemed, wanted to live near the park. New condos sprang up and the values of those already near the park increased dramatically. A convenient location that had been underutilized for decades had suddenly become one of the hottest properties in the city.

A second factor contributing to the quick success was consumer value. One of Magellan’s business strategies is to offer more value to buyers than its competitors do, sacrificing some profit margin for higher sales velocity and volume.

Due to the project’s 15-year timeline, Magellan decided to keep prices relatively low so it can sell units faster. The result: Buyers get more value; the developer saves on the enormous costs to carry the undeveloped land.

A third key to sales is Magellan’s marketing program. Today, it is headed by senior vice president of sales, Leila Zammatta, a former flight attendant David put in charge of sales in August 2006. Thanks to her performance at Lakeshore East, in 2007, Leila ranked second among all agents in Chicago condos sold, closing 490 units. (See profile.)

Based on a rule of thumb of allocating 3% of project costs to marketing, David estimates that, to date, Magellan has spent more than $20 million on marketing Lakeshore East. Among its efforts:

* For each building, the company sends an e-mail blast and a mailing to prospects on its mailing list.

* For each building, it creates a Web page and posts videos on YouTube.

* From its network of agents and clients, the sales staff receives, and follows up on, referrals

* Through LM2, the company places ads in local and national media, primarily focusing on online media.

* Through a Magellan Rewards Program, it encourages word-of-mouth by residents, offering them discounts on movies, area restaurants, etc., and free boat tours. Says David: “The happier residents are, the more they talk about us to their friends.”

The results: As of July 1, 2008, 2,338 of the planned 5,000 units in six buildings have been completed. Of the completed units, all but 212 are occupied by owners or renters. Sales goals have been exceeded consistently, with no building taking longer than 36 months to sell out.

In order of construction:

The Lancaster: All 209 units were sold in 10 months, at an average price of $370 per square foot. Sales began Spring 2002; construction began Fall 2002; deliveries began November 2004.

The Shoreham: All but 5% of the 548 apartments were rented in 10 months, at an average of $2.45 per square foot per year. Construction began Spring 2005. Rentals and delivery began Spring 2005. Occupancy is 92%.

The Regatta: All 325 units were sold in 18 months, at an average of $400 psf. Sales began Spring 2004; construction began Fall 2004; deliveries began Winter 2006.

The Chandler: All 304 units were sold in 24 months, at an average of $450 psf. Sales began Spring 2005; construction began Fall 2005; deliveries began Winter 2007.

340 on the Park: In partnership with Related Midwest, all 344 units were sold in 36 months, at an average of $520 psf. Sales began Summer 2004; construction began Spring 2005; deliveries began Winter 2007.

The Tides: 52% of 608 apartments were rented in six months at an average of $2.50 psf per year. Construction began Spring 2006; rentals began February 2008; deliveries began March 2008. Occupancy is 52%.

Those totals put the community’s current population, estimated at 1.5 residents per unit, at about 3,500 residents.

Sales prices for units in the first seven buildings sold ranged from $200,000 for a 600-square-foot studio in The Chandler to $3 million for a 4,000-square-foot, three-bedroom Parkhome.

Village Market Center: Among the retail outlets in this two-story, 140,000-square-foot space on the southwestern edge of the community are Treasure Island Foods and Fifth Third Bank. Located elsewhere are Caffe Rom and a CVS. Several other restaurants, including an outdoor café, are scheduled to open soon.

Under construction and scheduled for completion in 2009:

The Parkhomes: All but 16 of 24 townhomes were sold at an average of $550 psf. Deliveries are scheduled for Fall 2008. Homes still available range in size from a 1,900-square-foot, three-bedroom home to a 3,900-square-foot, three-bedroom unit.

Under construction and scheduled for completion in 2009:

Aqua: All but 7 of 270 units were sold in 18 months, at an average of $520 psf. Sales began Spring 2006; construction began Spring 2007. Deliveries are scheduled to begin in Spring 2009, currently two months ahead of schedule.

Part 3: Coming Thursday, August 7

Part 1

Area Profile: Lakeview, 2nd in Sales, 8th Price

The second in our weekly series of profiles of the 77 census areas that make up Chicago. The statistics come from various sources, including the U.S. Census Bureau and the database of ChicagoCondosOnline.com, where you will find a more-comprehensive profile of every area, with a map showing the neighborhoods within each area.

Lakeview (No. 2 in units sold, No. 8 in median sales price, 2007)

Boundaries: South: Diversey; North: Montrose, Irving Park; East: Lake Michigan; West: Ravenswood

Neighborhoods: Lakeview East, Lakeview, Southeast Ravenswood, Graceland West

Appreciation (2/1/08): 1 yr: 6% (25th of 77 areas); 5 yrs: 19% (60th)

Demographics: College Graduate: 71% (2nd of 77 areas); Professional: 63% (5th); Median Income: $54,000 (8th)

Largest Condos: 655 W. Irving Park (901 units), 3550 N. Lake Shore (728), 3950 N. Lake Shore (660), 2800 N. Lake Shore (655), 3600 N. Lake Shore (640)

Complete Area Profile, with map and schools

All Profiles to Date (Near North)

New-Construction Update: 7/28/08

Residences at Joffrey Tower

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

151 N. State, Residences at Joffrey Tower
NA of 208 units available, 1-2 BR, $315K-$530K, Delivery now
Developed by Smithfield, Marketed by @properties

1725-27 N. Burling, Burling Place
3 of 6 units available, 2-4 BR, $790K-$2.2M, Delivery now
Developed by Spearhead, Marketed by Rubloff

5440 N. Sheridan, Bluewater 5440
NA of 187 available, 0-3 BR, $200K-$510K+, Delivery 12/09
Developed and Marketed by Bluewater Companies

2131 S. Michigan, Lexington Park
200 of 333 available, 1-2 BR, $200-$400K+, Delivery late 2008
Developed and Marketed by Chieftan Group

435 E. Illinois, Lofts at River East Art Center
NA of 150 available, 1-3 BR, $435K-$1M, Delivery summer 2009
Developed and Marketed by MCL

Previous New-Construction Updates

Magellan's Lakeshore East: Halfway Home

First of Three Parts

In the summer of 1996, Joel Carlins took time off from his job as a top-flight attorney to play golf on an unusual course in downtown Chicago.

The nine-hole, par-three course occupied a 28-acre parcel near the confluence of Lake Michigan and the Chicago River, three blocks east of Michigan Avenue. It was bounded on the east by Lake Shore Drive, on the south by Randolph, on the west by Columbus, and on the north by East Wacker.

What made the site all the more unusual was that, because it had served as a freight yard for the Illinois Central Railroad, it sat 52 feet below the elevated streets surrounding it.

As he looked up at the nearby high-rises, Joel, age 60, asked himself what many players on that course also wondered, “Why is this a golf course?”

As he soon discovered, the land remained undeveloped because it was still owned by Illinois Central, in partnership with Pepsico and Met Life, and was part of a Planned Development Community called Illinois Center.

By opening it to the public as a golf course, the land owners saved millions of dollars in taxes each year.

A transshipment port in the mid-19th century, the site was believed to be the largest parcel of undeveloped downtown land in any major U.S. city. It had been considered as a location for a casino or a stadium for the Bears, but no one had been able to surmount the difficulties to get a deal done.

Months after his golf outing, Joel decided to buy the land and create a mixed-use development with condos, apartments, hotels and offices. He did so with longtime partner and fellow developer, Jim Loewenberg, owner of NNP Residential & Development. (In 2006, the two companies would merge to become Magellan Development Group LLC.)

Before persuading the owners to sell, Magellan needed to create a master plan to develop the site. The plan would need to be not only feasible, but acceptable to the neighborhood, the city and the sellers.

The initial plan included building an infrastructure that would raise the land 52 feet. That alone would cost an estimated $80 to $100 million.

Fortunately, a city employee asked Joel and Jim if they had ever talked to Adrian Smith, an architect at Skidmore Owings and Merrill. They said, no, and asked why. The man said that, as a hobby, Adrian had been working for years on a master plan for the site, which dealt with the height and various other problems.

Joel and Jim called Adrian and asked if they could see the plan. When he saw it, a light bulb went on in Joel’s head. Adrian’s plan didn’t require that the land be raised, saving perhaps $100 million and making the project feasible.

Magellan hired Skidmore and, in six months, Adrian and his colleagues completed the plan. Over the next few years, Magellan got it approved by the neighborhood, the city and the owners.

Originally, the Planned Development Community encompassed 14 million square feet, all the way to Michigan Avenue. To limit density, the city negotiated with Magellan to remove five million square feet and to build on only nine million.

In 1998, with help from a Detroit financial group, Magellan bought the 28-acre property at public auction for $70 million, or $2.5 million per acre.

Before it could close on the deal, however, Magellan ran into problems. Delays caused by the first Gulf War and environmental “hiccups” caused the Detroit group to walk away and Magellan lost is financing after 9/11/01.

In early 2001, Magellan recruited another group of lenders. This time, the lead lender was LaSalle (now part of Bank of America). Other lenders included National City and a Korean bank.

The master plan was completed in early 2002, and has not changed significantly. It outlines a village in the heart of downtown. The village incorporates all the elements of a traditional city neighborhood—housing, stores, offices, a park, even a public school. Total projected cost: $4 billion. Total time to complete: 15 years.

Called Lakeshore East, the community is designed to be a model urban village, the largest development in any city in America.

Plans call for construction of up to 4,950 residences (market demand will determine the mix of condos and apartments) in a dozen high-rises, 2.2 million gross square feet of commercial/office space, 1,500 hotel rooms, 400,000 square feet of retail space and a six-acre park.

In the park would be an elementary school, a gated playground and dog park, a meadow, water fountains, ornamental gardens, extensive seating and free wi-fi Internet access. (Magellan and the city are considering locating the school elsewhere.)

In June 2002, after five years of negotiation, with financing finally in place, an important meeting was held by Magellan’s three principals: Joel Carlins, his partner Jim Loewenberg, and David Carlins, his 40-year-old son and vice president. The three had gathered to vote on whether or not to proceed. Two voted yes; one voted no.

To his credit, David, a lawyer, freely admits that he, the young tiger, voted against it. “I just couldn’t imagine enough people would buy a unit in a building that would overlook a construction zone for years,” he recalls.

David credits his father’s tenacity for making the deal happen. Joel sat in many meetings with Pepsico officials as they were being distracted by consolidation. The triumph, David believes, is a tribute to his dad’s tenacity.

In June 2002, it was David, the doubter, who signed the papers to borrow the $70 million to buy and improve the property.

What David recalls most vividly about the closing is that Bernie Levitt, the representative for one of the sellers (Met Life), insisted that the legal documents be signed on a golf course. Why? Because, Bernie explained, at his advanced age, getting in another round of golf on a beautiful day was far more important than selling another piece of property!

Ironically, a land purchase conceived on a golf course closed on a golf course. Now that it possessed a prized parcel in the heart of downtown Chicago, could Magellan, developer of only eight condos, execute its bold, award-winning plan well enough to recover its investment? Or would the company, like so many developers, find itself facing bankruptcy?

Part 2
Part 3

New-Construction Update: 7/21/08

Metropolitan Tower on the Park

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

310 S. Michigan, Metropolitan Tower on the Park
24 of 242 units available, 1-4 BR, $500K+, Delivery now
Developed and Marketed by Metropolitan Properties of Chicago

2301-2390 S. Wabash, The Wabash Club
4 of 62 units available, 2 BR, $390-$420K, Delivery now
Developed by Dubin, Marketed by Bear Kaufman

55 E. Monroe, Park Monroe
38 of 156 units available, 1-3 BR, $450K-$1.7M, Delivery Nov '08
Developed by Park Monroe, Marketed by Equity

3963 W. Belmont, Shoemaker Lofts
6 of 175 units available, 1-2 BR, $230-$390K, Delivery now
Developed by Dubin, Marketed by Bear Kaufman

4 E. Huron, The Huron
NA of 47 units available, 2-5 BR, $992K-$4.8M, Delivery 2010
Developed and Marketed by State and Huron

Previous New-Construction Updates

Area Profile: Near North Side, No. 1 Units Sold

Beginning today, we will publish a weekly series of profiles of the 77 census areas that make up Chicago. The statistics come from various sources, including the U.S. Census Bureau and the database of ChicagoCondosOnline.com, where you will find a more-comprehensive profile of every area, with a map showing the neighborhoods within each area.

Near North Side (No. 1 in units sold, No. 2 in median sales price)

Boundaries: South: Chicago River; East: Lake Michigan; North: North Avenue; West: North Branch of Chicago River

Neighborhoods: River North, Old Town, Cabrini Green, Streeterville, Goose Island, Near North, Gold Coast

Appreciation (2/1/08): 1 yr: 8% (21st of 77 areas); 5 yrs: 38% (28th)

Demographics: College Graduate: 67% (3rd of 77 areas); Professional: 64% (3rd); Median Income: $58,000 (5th)

Largest Condos: 420 E. North Water (1,200 units), 300 N. State (895), 401 N. Wabash (825), 505 N. Lake Shore (720), 175 E. Delaware (705)

Complete Area Profile, with map and schools

New-Construction Update: 7/14/08

Lake Park Crescent

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

4117 S. Lake Park, Lake Park Crescent
50% of units still available, $190K-$700K, Delivery now
Developed by Draper & Kramer

6105-07 S. University
6 of 6 units available, $270K-$420K, Delivery Fall '08

2323 W. Pershing, McKinley Park Lofts
46 of 163 units available, $170K-$330K

3450 S. Halsted, Bridgeport Condominiums
47 of 67 units available, $190K-$330K, Delivery now
Developed & Marketed by The Mega Group

47 W. 35th, Park Boulevard
140 of 211 units available, $190K-$500K, Delivery now
Developed & Marketed by Park Boulevard Partnership

Previous New-Construction Updates

New State Advisory Council Solicits Your Ideas

If you have ideas for state laws that would improve condo living, the new Illinois Condominium Advisory Council wants to hear them.

We trust that each member of the council will listen as intently as Elizabeth Hurley seems to be.

According to the Chicago Tribune, the council was appointed by the governor recently to identify the biggest challenges to condo life in Illinois and make recommendations for legislative change. The council will host public hearings this summer, and report to lawmakers by year's end.

"We will not draft legislation, only address global problems," said council chairman Jordan Shifrin, an attorney with Kovitz Shifrin Nesbit. "After we have feedback, we will vote on recommendations."

Among the suggestions under consideration: licensing property managers, making developers more accountable, strengthening reserve requirements and determining who is responsible for leaks within units.

Top Secrets of City's Top 10 Agent Superstars

Say you're a prospective condo buyer or seller looking for a top-producing agent, or you're an agent looking to become one of Chicago's Top-10-producing condo agents.

What secrets would you guess account for Superstar status of condo agents? (Condo Superstar is what we call the 10 agents who sold the most Chicago condos in 2007.) Decades of experience, to draw upon a huge referral network of clients? The best Web site and Internet strategy?

If you chose either of those answers, the evidence we gathered in writing profiles of these Superstars doesn't support you. The typical Superstar has less than a decade of experience and doesn't even have his own Web site.

The best single indicator of Superstar status: Is he the exclusive listing agent for one or more developers closing on new construction or conversion units?

According to our research, the typical Superstar sold an average of 264 condos (from 126 to 681 "sides," or transactions), for a total sales volume of $110 million (from $42 to $324 million), and generates 80% of his business (from 40% to 100%) from new construction, generally as the exclusive marketing/listing agent for one or more developments.

The composite Superstar is male (8 of 10), is 36 years old (ranging from 32 to 42), has been an agent for 9 years (from 6 to 15), is married (7 of 8 males, 0 of 2 females), works 80 hours a week (from 45 to 100), and graduated from college (6 of 8, 2 unknown).

Ah, yes, and all of them have a support team, ranging from 1 to 16 members, some of them agents whose sales are credited to the team leader.

Not one of the 10 cited the Internet as a major source of business; only two (that we know of) have a blog, and several don't even have a Web site.

The Superstars impressed us with their willingness to share some of the secrets of their success. Among them:

Rubloff's Mario Greco: Work hard, price correctly and spend money to make money. Add Contract Pending to your yard signs and mail Just Listed and Just Sold postcards to everyone within three blocks of the property.

Koenig & Strey's Art Collazo: Treat the buyer of a $100,000 property the same as you do the buyer of a high-end property. If you do, the $100,000 buyer will recommend you to his boss, who may buy a million-dollar property.

Coldwell Banker's Matt Garrison: Follow the market. If residential is slow, try commercial. If Chicago is slow, try elsewhere.

Their key advice to other agents: Work more hours. Their key advice to themselves: Work fewer hours.

For profiles of all of the Top 10 Superstars, click here.

For individual profiles, in descending order by most transactions, click the name: Equity's Michael Holtorf, Magellan's Leila Zammatta, Koenig & Strey's Chris Feurer, Coldwell Banker's Matt Garrison, Koenig & Strey's Art Collazo, @properties' Scott Graden, Rubloff's Mario Greco, C21 Sussex & Reilly's Jeff Lowe, @properties' Joe Zimmerman and Baird & Warner's Dana DiPasquale.

Snapshots of June Sales Over 6 Years ('03-'08)

With statistics generated from the Multiple Listing Service, operated by Midwest Real Estate Data (MRED), we created the following table to show how the Chicago condo market has changed over the past six years, based on a snapshot of sales in June of each year:

Six-Year Comparison of Chicago Condo Sales in June

	'03	'04	'05	'06	'07	'08
Median Price:	$250K	$260K	$279K	$286K	$299K	$325K
Total Volume:	$405M	$607M	$709M	$694M	$710M	$505M
Units Closed:	1441	2037	2207	2050	2037	1365
Avg Mkt Time:	58	106	91	97	114	124

Comparing June 2008 to June 2003:
* Median sales price is up 30%, an average appreciation of 6% a year
* Total volume is up 25%, an average of 5% a year
* Units closed are down 5% (33% lower than in 2007)
* Average market time (days on market) is up 114%, meaning that what took two months to sell in 2003 took four months in 2008.

For reasons we don't understand, if one looks at the snapshots each January over the same six-year period, median sales price is up 40% (compared to 30% in June), an average appreciation of 8% a year. Go figure.

New-Construction Update: 7/7/08

Lofts at 1800 W. Grace

Every Monday, with help from our friends at YoChicago.com, we present vital data on five condos under construction, including conversions of apartments.

To view Building Profile on ChicagoCondosOnline.com, click address. To visit developer’s Web site, click name. To use Chicago's best condo search engine to review in-depth profiles of 900+ new-construction properties and find the unit types that meet any combination of 100 preferences, click here.

1800 W. Grace, Lofts at 1800
81 of 91 units available to buy, $264K-$720K, June '09
Developed & Marketed by Kopley

900 S. Western, Village at Tri-Taylor
8 of 8 units available, 2 BR, $300K-$350K, Now
Developed by Alliant, Marketed by @properties

601-611 S. Wells, Vetro
128 of 232 units available, $200K-$1M
Developed & Marketed by Roszak/ADC

155 N. Aberdeen, 155 N. Aberdeen
6 of 12 units available, $470K-$950K
Developed & Marketed by Utopian Properties

545 N. Dearborn, Grand Plaza
24 of 284 units available, $300K-$1.3M
Developed & Marketed by Jaeger Properties

Previous New-Construction Updates

Give Your Visitors Access to 13,000 Floor Plans

With our new floor-plan widget, brokers, agents and others can give visitors to their Web sites or blogs free access to Chicago's largest online collection of condo floor plans--13,000 in all.



To request the code by e-mail, click here. Once you copy and paste the code onto your site, the widget will display on your site.

A visitor enters the address or name of a building for which he wants a floor plan or a tier-location guide, and clicks Find.

That takes your visitor to our companion Web site, ChicagoCondosOnline.com, where he will see a list of unit types in that building for which we have floor plans. (On our site, your visitor will see no mention of your competitors and no ads.)

Visitors can e-mail the images or print them, enabling you to provide better service with less effort and at no cost.

Other available widgets: Interactive City Maps, Market Report

Milestone: Celebrating Our 10,000th Visit

Frankly, we have no idea how accurate the free counter on our blog is, but it just recorded the 10,000th visit since we launched on January 28. So, to those of you who visit what aspires to be "Chicago's Best Condo Blog," we'll take this opportunity to thank you for your interest.

We also have no idea who visits our blog, so if you'd like to identify yourself and suggest how we can serve you better, please do so by clicking Comments below.

We hope you don't mind our having invited Amanda Tapping to join our celebration. Given the July 4 holiday, we thought she was dressed appropriately, even if she is an English-born Canadian actress.

Breaking News: Dollar Volume Down 15% YTD

Year to date, through June 30, dollar volume of Chicago condos is down 15% and units closed are down 26%. But median sales price is up 10% and average days on market is up only 4%.

That's the picture from figures generated on the Multiple Listing Service, operated by Midwest Real Estate Data.

By comparison, at the end of May, year-to-date volume was down 12%, transactions down 25% and median price up 11%.

For the raw numbers on which the above percentages are based, see the Condo Market widget on this blog. For more details, go to Market Overview on ChicagoCondosOnline.com. Receive these monthly reports by e-mail.

EXPERT ANALYSES: Has City's Condo Market Bottomed?

Asked to comment on the above report, Jim Merrion, Regional Director of RE/MAX Northern Illinois, offered this analysis:

"My personal opinion is that we have not hit bottom yet, and the news is continuing to worsen every day in the financial mar- kets. (Note stock market plunge, unemployment increases, pension cuts, layoffs, 600 Starbucks closing, anticipated impact of obscene Cook County tax increases, SB 1167’s forthcoming effect, Merrill Lynch situation, the Spire as a rental building, etc.)

"Prices are still too high! They should not be increasing at this time, and by doing so, the backlog and average days on market continue to increase, which will force buyer price disintermediation and an ever-looming inventory buildup, which, combined with the new projects that were too late to stop, are destined to cause a severe market correction in average sales price, and until that happens, slipping sales numbers.

"Indeterminable at this point is the long-term effect of a Federal bailout of sorts, which I believe would be beneficial short-term (two years maximum) but detrimental to the market in the long-run, because it is unsustainable.

"The key to agents being successful, at this point," adds Jim, "is for them to do their market research thoroughly, and to fully educate their sellers about how to properly price, stage and market their property to effect a sale.

"We have found that our access to the foreclosure, short-sale, and REO data on our illinoisproperty.com Web site has helped us to do that. Remember, there has never been a property that has failed to sell if the price is low enough, and every market has opportunity available."

Rubloff's President Jim Kinney agrees about the bottom:

"We have not hit bottom yet. You need some blood in the street to see bottom. The city resale market has been a lot stronger than many other markets and indeed some buildings are still commanding record and near-record prices. New construction is close to dead and at a standstill in many projects. I think we will have to see a failure of an already started project (out of the ground) to see a fishing of the bottom.

"Hints of inflation are actually good for real estate except that it will be alongside increasing interest rates--2009."

Rubloff's Mario Greco, one of Chicago's Top Ten condo agents, adds his perspective:

"Based on what I'm seeing in the market, I'm not sure there is a true bottom. I am continuing to see well-priced (not firesale, but fairly priced) and well-located properties marketed correctly are selling for 96 to 98% of list price and are doing so in 60 days or less.

"The 'bottom' that people are fishing for seems to be codespeak for 'When are the majority of sellers going to actually price their properties fairly and not shoot for the moon?' My sales volume is up almost 30% from last year and my number of units sold has increased by 22%."

Receive these monthly reports by e-mail

Saluting: Baird & Warner's Dana DiPasquale

Tenth in a series of profiles saluting Condo Superstars, agents who ranked in the Top 10 for selling the most Chicago condos in 2007.

Top Producer, 7 Years Running, Takes a Breather

Name: Dana DiPasquale. Brokerage: Baird & Warner. Age: 35. Years as Agent: 7. Transaction Rank: 10 (126 units). Dollar Rank: 9 ($49 million). Resale Volume: $3 million. Condos (of all business): 85%. Source of Statistics: Midwest Real Estate Data (MRED), Chicago condos closed in 2007.

Ranking No. 10 on our Top 10 list of Condo Superstars is Dana DiPasquale, a sales associate in the Lincoln Park office of Baird & Warner, the largest independent brokerage in Illinois and, based on dollar volume, the No. 4-ranked condo brokerage in Chicago.

For 2007, Dana ranked 10th in transactions, with 126, and 9th in dollar volume, with $49 million. She is one of two females in the Top 10. At 35, she is one of the youngest agents, and the youngest woman, on our list.

Of her $49 million in sales (not counting another $5 million not reported on the MLS), all but $3.3 million was for new construction, primarily conversions. Her listing-to-sold ratio was roughly 3 to 1.

Those figures show that Dana, like several other Top 10 agents, generates most of her revenue by convincing developers to hire her to help them plan and market conversions of apartments to condos, and then deliver on her promise.

What distinguishes her from others who do this, says Dana, is that she does it alone, without other agents to support her. Unlike several Top 10 condo agents who lead a team of agents, Dana is, with help from one assistant, Amber Wilson, a one-(wo)man show. "Not only do I work with buyers, I conduct my own open houses and pick up trash in the yard," she says.

In 2007, Dana's main source of sales was Crilly Court Condominium, a one-square-block condo conversion in historic Old Town with four addresses: 1701-17 N. Crilly, 206-10 W. Eugenie, 1702-16 N. Wells and 207-11 W. Paul. The 90 units at Crilly Court accounted for 81% (102) of her 126 transactions.

Entrance to Crilly Court, 1701-03 N. Crilly

Model bedroom & Model living room

In years past, her sales were spread out over several developments in many neighborhoods: Lincoln Park, Lakeview, Wrigleyville, Wicker Park, Bucktown, Ukrainian Village, Gold Coast, Old Town, Streeterville, West Loop and South Loop.

Dana traces her success in 2007 to an event in 2004. She had invited her mother to fly, from Buffalo, N.Y., to Chicago to attend a dinner at which Dana would be honored as a top-producing agent.

Standing in line, Dana's mother started speaking enthusiastically about her daughter's success to a man who turned out to be a writer for Metro Chicago Real Estate, which later profiled Dana and featured her photo on the magazine's cover.

A few months later, a developer who had been impressed by that article showed up at Dana's office and, without having met her before, asked her to help him convert, from apartment to condo, Crilly Court, a vintage complex built in 1895.

Dana and her developer began the planning in July 2006 and the sales in July 2007. She helped him on all of the phases of his project: reconfiguring floor plans, picking out finishes, designing models, layout of marketing, creating logos, pricing, open houses, negotiations, selection of finishes for each homeowner, and facilitating all phases of contract to close.

In 3rd quarter of 2007, Dana had surpassed $50M in sales and closed 140+ units.

In an interview in Baird & Warner's Lincoln Park office at 2762 N. Lincoln, Dana freely shared with us the story behind her success:

Born and raised in Buffalo, N.Y., Dana graduated from the University of Buffalo's School of Architecture in 1996. She moved to Chicago, where her father and brother lived and where great architecture is appreciated.

Disappointed that she couldn't find "the perfect job" with any architects with whom she interviewed, Dana took a $25,000-a-year job with a small-time developer. As project coordinator, she worked with contractors, "from foundation to completion--reading blueprints, ordering windows, choosing brick and paint colors."

Soon, Dana realized that she wanted to make the executive decisions. In 2001, she got her license and joined Baird & Warner as an agent, intending to sell real estate part-time. Within two weeks, she was on a roll and quit her other job to be a full-time agent. "I wanted to make sure I was in charge," she says.

Immediately drawn to new construction and conversion by her interest in design and architecture, Dana turned her expertise into a profitable niche.

By the end of 2001, she had generated $9 million in sales and won Baird & Warner's Rookie of the Year Award, given to the first-year agent who sells the greatest volume and the most units. She was 22 years old! It was a time of mixed emotions for Dana. Sadly, her father had died that year.

Dana was no flash in the pan and suffered no sophomore slump. From 2001 through 2007, she outperformed all 800+ other agents, as the company's top producer in both dollar volume and units. "My income more than doubled every year," she says.

During most of those years, Dana says, she didn't sleep, typically working from 7 a.m. to 11 p.m., 90 hours a week. Because she was rarely home and didn't have time to move, she lived in a 600-square-foot studio. (Today, she lives in a condo in Lincoln Park.)

Why did she work so hard? "To make a mark in my career," she explains.

So far in 2008, Dana has closed only four units valued at $1.7 million. Currently, she has only 10 listings. Why so few? "After selling out Crilly Court last year, I have no new major projects this year and I'm deliberately taking a breather," she explains.

She adds: "I don't say no to any referral business that comes my way. But I'm not out pounding the pavement as I once did, or calling developers. They call me. I don't need to be Number One anymore. I no longer want to be the biggest; I want to be the best."

Making the transition from workaholic to a more balanced life, from Type A to Type A-- (minus minus), is challenging, Dana confesses. "To get to the top, I put my life on hold for a decade. My comfort zone is working all the time."

Sounding philosophical at 35, Dana says her focus today is "living in the moment, appreciating what I have, keeping my life simple."

Now that she has reduced her working hours, Dana spends more time with family and friends, taking cooking classes, learning to play tennis, enjoying her 14-month-old niece, rooting for the Cubs, and walking along the Lake with her dog, Bear, an 11-month-old, 70-pound Great Dane Shepherd, whom she is training to work with kids who have cancer.

She also loves traveling, having just returned from a safari in Africa. An Italian-American, she especially enjoys vacationing in Italy, as well as in the French West Indies.

How does she feel being a Condo Superstar? "I love being busy," she says. "Now that I've reached the top, success is like wearing the same shirt everyday; you get used to it. Sometimes I have to stop myself because I want to continue the same pace, but I know that I want to redirect my energy to what I have committed myself to this year: living the moment and having fun with family and friends."

Where does Dana DiPasquale see herself five or ten years from now? "Still selling real estate in Chicago," she says, "with another business on the side, and, possibly, married with kids."

Next Wednesday: Secrets of Our Top 10 Condo Superstars

Profiles of All Ten Condo Superstars