The best way to determine whether prices are reasonable for new construction is to determine the cost per square foot of the unit and then compare it to the buildings in the Chicago area. In addition, as you may suspect, views are very important for future resale in determining the relative square foot price. The per square foot cost for 2520 currently is approximately $800 to $1,200 depending on the location, the floor plan and size of the unit.
Please note, the $1,200 is at the high end of the market and is similiar to Trump Tower, The Spire and the Ritz-Carlton. The unique thing about 2520 will be the concierge service, the private contained park only available to owners and the unique Lincoln Park location that will never be able to be duplicated in the city. In addition the ceiling heights in units will vary from 9.6 feet to 11.6 feet.
If you have been to New York ,consider this location similiar to living across the street from Central Park with its mesmerizing views. The views out of 2520 will be fantastic and panoramic. In addition, you will be able to sit out on a balcony which the other exclusive buildings in the city, the Spire, Trump Tower and the Ritz Carlton will not have.
It is my understanding that the building is already 50% sold. Should you want additional information as to which are the best tiers and specific floor plans in the building I can send them to you. I currently live in a Mies van der Rohe building just near this new construction project. In addition, if you want to understand the nuances of what to look for when purchasing luxury new construction such as the 2520 building, you may want to check out my website at http://www.SheldonChicago.com.
Note, it is highly unlikely that your investment will be cash flow positive and that in three or four years the initial assessments will be the same as quoted. Also, keep in mind that you should anticipate 2% of the purchase price for real estate taxes. And do not forget, some newer buildings in the city have instituted rules that allow only a certain number of tenants. There are risks but if you want to live in the building, I believe this building will ultimately be a winner.
General Electirc, one of the premier United States conglomerates is providing financing for this building so you know there has been some real thought about developing and construction.
This property is in a good location but other opportunities exist throughout the city. The property is being heavily marketed in Europe particularly England and Ireland due to the strength of the Euro and Sterling versus the dollar. A number of these buyers will not be owner-occupiers which should be of concern to unit owners. If you plan on living in the unit and are relocating to Chicago it may be the right place for you to live. However, as an investor the expenses associated with owning the unit versus your rental income make it hard to consider this a good opportunity. Yes there's capital appreciation but when you factor in what's available in other buildings and areas you may find theres better opportunities and upside potential elsewhere such as the gold coast and streeterville right in the heart of the city or a 3 flat specifically geared to investors in Lincoln Park/Lakeview/Wicker Park/Bucktown to name a few.
Best of luck, Ken.