CHICAGO'S  RAVENSWOOD TRANSPORTATION CORRIDOR:                                                                           ADAPTIVE RE-USE KEY TO LONG TERM VALUE     The Ravenswood Transportation Corridor (from 3600 to 5600 north,) is located  two blocks west of Ashland. It is characterized by two Ravenswood Avenues, the mostly broader street to the east, (which has the odd numbered buildings,) and the western street, which is narrower, and more industrial. As gentrification on the Chicago north side has moved north, the Ravenswood transportation corridor now connects the booming Lake View area to the south, with the gentrifying Brown Line neighborhoods of Lincoln Square and Ravenswood to the north.      Because of its superior location, and due to its eclectic mix of both older and low rise industrial buildings, the Ravenswood corridor should be known city-wide for its adaptive re-use projects. In addition, there are three Brown Line stops in the corridor, as well as a Metra stop at Lawrence. In several respects, the Ravenswood corridor is similar to the River North gallery district and the West Loop Gate area.  However, because of current City policy, currently enforced by at least one of the local aldermen, most of the Ravenswood corridor has been restricted to existing industrial and office purposes. As a result, building values have been negatively affected by their industrial zoning status.      But more than anything, the long term value of any commercial or residential property in this unique sub-market will be determined by its re-use potential. North of Foster Avenue, there has been a substantial amount of residential redevelopment and razing of industrial buildings, because that area is in a different ward. In the southern portion of the corridor however, there have been only a few major housing projects.    EXAMPLES OF RECENT SALES AND CERTAIN HIGH VALUE RE-USE:                          1801-13 W. Irving Park: This parcel is located on the southwest corner of Ravenswood and Irving Park. It has nearly as much frontage on Ravenswood, but it is considered to be an Irving Park parcel. As such, the parcel is exempt from re-zoning restrictions.          This 20,400 sq.ft. parcel sold in 2004 for $2.15 million, or $105,000 a square foot. We were told by a local investor that the site will be used for a 45-unit condo project, which has just gone under construction. The per unit cost of the tiny units would be approximately $48,000. Prices are advertised in the $300,000 range.       4853 N. Ravenswood: This is an estimated 24,000 sq ft three-story brick building that is currently being used by an Ad agency. This is a high quality building that is beautifully designed and well-maintained.  There is a garden parcel adjacent to the property that contains a landscaped playground. The building was sold by a local realty company in the summer of 2004, for $2.4 million.  This comes to $98 a square foot.       4325 and 4343 N. Ravenswood: These two loft  buildings were purchased by the same owner back in 2001 and 2002. There has been some substantial interior improvement made. We do have not sales records on them, but they are mortgaged together for about $34 a square foot. The buildings are used for a high end antique warehouse, and someone at the business indicated that he thought the buildings were easily worth twice as much as their mortgage amount.       Note: there is another high end interior design business in a one story building at 4555 N. Ravenswood.       5223 N. Ravenswood: This is a three story loft building which is located north of Foster Avenue, and as such, it could be converted to residential units. It contains approximately 30,000 sq.ft. and sold in 2002 for $50/sq.ft. The sales ad described the property as a “prime Ravenswood corridor timber loft building.”  This is a River North quality building.      4355 N. Ravenswood: This is an industrial two story loft building that sold for approximately $36/sq ft in 2001. It is on the corner of Montrose and Ravenswood, and it could conceivably be converted to residential use, since it has good Montrose frontage. The price is probably reflecting the south of Foster use restriction.       4147 N. Ravenswood: This is an older, narrow four story brick industrial building. It has 43,000 sq.ft  and the property sold in March of this year for $35/sf. This building has small floors, but it is adjacent to a parking lot that the owner controls.       4745 N. Ravenswood: This is a condo project that was completed before the corridor became politically ‘sensitive’ to residential re-use. The project is called Ravenswood Station, and it contains 55 units. It is a five-story loft building for which there is no public record of the price paid for the conversion. The property is across the street from the local Metra station.  The density is similar that for the project under development on Irving Park, which is also near a train station.      (Note: in many suburbs, the new thinking about residential redevelopment is that density bonuses are given for housing that is within   walking distance of public transportation.)  In the past year, the City of Chicago has revised its planning concerning high density redevelopment near transportation nodes. It has not, however, changed the land use designation for most of the Ravenswood corridor.            CURRENT TALK ABOUT LEASING VALUES:     After having spoken with several building owners and professional managers in the corridor, here are their impressions of where this sub-market currently is:       The larger, higher quality office buildings are mostly all full, with leases in the $15-20 sq ft range. Most of larger, improved buildings are leased.       Some owners have made substantial or major improvements to their properties, converting them from industrial to smaller, and    higher quality office spaces. Some improvements have been as expensive as $50 sq.ft.       Industrial space has a wide range of values, with some of the older, under-utilized buildings (on western Ravenswood) leasing for as little as $5-6 /sq.ft.       The very worse buildings, that are smaller, with no recent improvements, are selling for as little as $10/sq ft, due to the current zoning restrictions.       SINGLE-FAMLY PRICES:      The Ravenswood transportation corridor was traditionally a working class district. As a result the oldest single-family homes in the area  are modest frame and bungalow properties. The current prices for these units range between $300,000 and $400,000. However, on good residential streets east of the corridor, single-family prices, especially for new units are over $500,000.      SUMMARY:     The long trend in the Ravenswood corridor is very positive, even though the political sentiment is currently against residential         redevelopment. With newly  constructed homes in the North Andersonville, Ravenswood, and Sheridan Park neighborhoods, selling for $500,000, the demand for smaller, affordable housing units will remain strong. The value of any particular building in the corridor will be determined by its location, its quality, its current condition, and the potential it has for higher value owners, such as business, corporate, and niche purposes.    There is also strong investor interest in larger buildings, with or without the prospect for residential re-use.  Professional investor interest in available properties is probably the best indicator of how desirable the Ravenswood corridor actually is.   PJFugiel, January 2,  ©  2005