Freddie Mac Announces Two Chicago Area Foreclosure Help Centers

Today, Freddie Mac, the giant government sponsored 9now owned) enterprise that underwrote billions in residential mortgages, announced that is is opening two Chicago help center to assist local homeowners facing foreclosure.  The centers will assist homeowners with the often frustrating process of loan modification.  The two groups involved with the Freddie Mac effort are Latin American Community Housing Association located at 1152 N Christiana Avenue and Neighborhood Housing Services of Chicago Inc. located at 1279 N Milwaukee Avenue.  The hope of both groups is that their intervention on behalf of homeowners will result in more modifications and allow many more homeowners to survive foreclosure.

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And You Thought Your Mortgage Was Under Water!!! Check Out This Loss - $3.5 Billion!

Three years ago when the real estate market was at its peak, TIshman Speyer and BlackRock Realty put together the nation's largest real estate deal when they packaged a deal to buy Manhattan's largest apartment complex: Stuyvesant Town and Peter Cooper Village.  The price tag: $5,400,000,000.00!!!!  Another $900,000,000 was required for reserves bringing the total investment to $6.3 billion.  Like many who speculated in real estate at the peak, the investor's plans did not turn out as they had planned.

Today, Tishman and BlackRock confirmed that they are handing over the keys to their lenders and walking away.  How much did they lose?  The property today is valued at $1.9 billion, resulting in a loss in value of $3.5 billion.  So, in perspective, the Chicago real estate market isn't so bad after all.

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Tweet in Peace. Court Throws Out Lawsuit Against Tenant for Mold Complaint

The Tweet that was heard round the world will not result in a judgment against the tenant that complained of a moldy apartment.  You may recall that the tenant was sued by her landlord after she "tweeted" that her apartment was moldy.  Offended, the landlord sued for libel.  Today, Cook County Circuit Court Judge Diane J. Larsen dismissed the case with prejudice.  The judge decided that the tweet was not libelous because it was too vague.


Tweet in peace.

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A Word of Caution to Our Landlords

In 2009, for the first time, the interest rate prescribed by the City of Chicago for security deposits for leases subject to the Residential Landlord Tenant Ordinance ("RLTO") is less than the rate specified by the Illinois Security Deposit Interest Act ("SDIA").  The SDIA rate is .25% for 2009 leases while the Chicago rate for 2009 leases is only .12%.  Why is this important? An argument can be made that the SDIA rate must be paid on all Chicago leases for 2009 for buildings with 25 or more units. Failure to do say may expose the landlord to liability under SDIA.  This situation has not been decided by a court as of yet, but is sure to catch some landlords off guard.  Consult an attorney experienced in these matters to learn how your particular situation may be affected.

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New Interest Rates for Chicago - Time to Update Your Lease

On December 31, 2009, the City of Chicago announced the security deposit nterest rate for all 2010 leases subject to the Residential Landlord Tenant Ordinance ("RLTO").  The new rate is .073%.  It is important that landlords update their lease forms to reflect proper disclosure of the new rate to be in full compliance with RLTO.  Failure to comply can expose a landlord to significant liability.

Consult with your own legal counsel to learn more or contact a Rent Smart agent for a reference to an attorney familiar with these matters.

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Eviction suit hits Sudler Sotheby's

By Andrew Schroedter, Oct. 28, 2009

In the latest controversy to befall Sudler Sotheby’s International Realty, a landlord has sued to evict the residential brokerage from its offices in the historic Palmolive Building, saying the firm owes nearly $371,000 in rent.  A venture owned by Beverly Hills, Calif., investor Ross Hilton Kemper filed a complaint Monday in Cook County Circuit Court, asking a judge to order Sudler’s parent company, Chicago-based McNair Inc., to surrender its third-floor office in the Art Deco tower, 919 N. Michigan Ave., and pay the past-due rent.

The lawsuit is the latest setback for Sudler, which acquired rival Century 21 Sussex & Reilly in February. The deal boosted Sudler’s marketshare but resulted in broker defections, a lawsuit by a top-ranking Sudler executive and a rent dispute over the former Sussex office in the Roscoe Village neighborhood.

Sudler CEO Sergio Martinucci expressed surprise at the lawsuit, saying the firm pays rent every month.

But he acknowledges that the company has been withholding a portion of its rent each month because he says the landlord, Michigan Avenue Retail LLC, has failed to live up to a promise to increase the size of the Sudler sign on the building, where Sudler leases 9,938 square feet.

“They won’t give us what they promised,” Mr. Martinucci says. Therefore, “we’ve been paying what we feel is our proportionate share of the rent.”

The eviction complaint was filed by Michigan Avenue Retail, which Mr. Kemper owns. A spokesman for venture had no comment. The venture’s attorney, David Saltiel, a partner in the Chicago office of law firm K&L Gates LLP, also declined to comment.

Under a 10-year lease that began in September 2006, the firm’s annual rent is $332,426, or $33.45 per square foot. Sudler has closed offices this year in Hyde Park and Bucktown. The company has four North Side offices, including the one in the Palmolive Building.

While Sudler is seemingly going through a particularly tough amid time the sharp slowdown in residential sales, they are not alone, says Jim Kinney, vice-president of luxury home sales at Chicago-based Baird & Warner Inc.

"Everyone is being affected by the downturn in the market," he says.

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Rubloff Is Acquired by Prudential Preferred

One by one the giants of Chicago's real estate industry are disappearing.  Today, Prudential Preferred Real Estate acquired  Rubloff Residential combining the two companies to form Prudential Rubloff.  What's driving all the consolidation?   The economy and the real estate slump have forced the companies to trim costs by combining forces and expanding the volume of transactions processed.  This makes the third large acquisition in the last year.  First Sussex and Reily was sold and then just last week Koenig & Strey was purchased.  Stay tuned.  More sales, consolidations and liquidations are likely.

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Koenig & Strey Is Sold!!!

Chicago real estate firm Koenig & Strey has been sold to a firm controlled by Warren Buffett's Bershire Hathaway.  Here is a link to the story at Crain's Chicago.  This comes after Koenig recently closed numerous Chicago offices after encountering a huge drop in it's sales volume.

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Chicago Tribune Declares It's a "Renter's Market"

Today's business section of the Chicago Tribune declared its a "Renter's Market" in Chicago.  Here's a link to the story in case you missed it.   "Landlords are lowering rents as they try to fill vacancies and cover their costs."  In short, citing research from DePaul University's Institute for Housing Studies, the paper announced that vacancy rates have increased significantly throughout the city putting pressure on the smaller landlord.  Rising unemployment is cited as the biggest reason, although the DePaul study also says that  the best renters are being lured into the sales market by historically low prices and the government's $8,000 tax credit.

What's a landlord to do?  Hire Rent Smart , of course.  Our company can make sure that you are on the right side of the statistic's cited by the Tribune.  What could be worse than holding a vacant apartment going into the winter months?  A single month vacancy let alone several months can wipe out a year's return on a building.  Avoid that drastic result by consulting the experts.  Rent Smart will give you an honest evaluation of the rental market for your property and will set a price that will bring you the tenant.  Results.  Nothing else matters and Rent Smart is equipped to deliver.  We have five offices staffed with 125+ agents ready to start working for you today.  Call us and we will get started.

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Get Paid for Your Trash - Chicago Launches New Recycling Program. Will It Work This Time???

Chicago has struggled in recent years to launch a sustainable recycling program.  We can all recall the 'blue bag" program that required residents to buy their own bags in order to recycle.  That went nowhere and was then replaced with the "blue bins" that also seem to be largely ignored if they can be found at all.  Thus, it's not surprising that the city is making another attempt.  This time is just might work.  Why?  Chicago is going to try a new tactic  - paying you by the pound for your recyclables.  Yes, that's right,  the city proposes paying you for your trash!

Chicago has contracted with RecycleBank to test a recycling program with 10,000 south side households.  The program will work like this:  for every pound  of trash recycled, a household will receive points from RecycleBank which can then be redeemed on the company's web site for gift cards and discount cards at participating retailers.  RecycleBank estimates that the value of the points offered to the local community could exceed $500,000 for new business injected back into the local economy from trash.  The program launched August 1, 2009 and covers the 5th, 8th and 19th Wards of Chicago which include the Beverly, Beverly West and Mt. Greenwood neighborhoods.

Let's hope this third attempt at recycling in Chicago actually works.  The initial prospects look good.  If the City can save money by recycling and its residents see a direct benefit too, then the program stands a good chance.  For more information about the program, contact RecycleBank or Rent Smart .

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