When it comes investing into the Luxury South Loop apartment market there are a few key factors that I look at that can ensure a sound investment for today and for the future.
The Roosevelt CTA trainline is located at Roosevelt and Wabash, in which it services the Green, Orange and Red Line. When it comes to walking distance to the El, I try to stay within a .5 mile / 4 city block radius as many people in the South Loop, elect not to have cars.
Proximity To The Lake:
Lake Michigan and the museum campus are some of the biggest draws of living in the South Loop. With direct lake access at both 9th street and 16th, the closer to these access point, within the .5 mile public transportation radius, the better.
Building Rental Cap / Owner Occupancy vs Renters:
Many highrise condomiunium buildings in the downtown Chicago market have building rental caps. As an investor its obviously important to buy in a building that does not currently have a rental cap, but it’s also just as important to understand the building rules and regulations to make sure you are grandfathered into being able to rent out your condo. That would be important to know in the case the association does decide to implement a rental cap in the building and you are an owner.
Amount of Building Reserves:
A “reserve” is the amount of free capital the building has for any seen or unseen expenditures that arise. The higher the reserve amount, the less likely that there will be a special assessment. Special assessments as an investor can kill your return.
Many of the new construction units in the South Loop will have specific features which are becoming more of a baseline expectations for today’s luxury apartment renter. The top tier features include, washer and dryer in unit, upgraded kitchens/bathrooms, and a view. The second tier unit features include balconies and space.