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Living
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Essential
guide to
Life
at the top Do
it your way Hotel
condos all the rage Conversions
add charm to high-end market North
Shore's CA
offers luxury for less at Edgewater Glen
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And never has such
a large pool of well-heeled buyers circled the offerings, judging the
merits of one fabulous view over another, scrutinizing one luxury finish
after the next, struggling to make distinctions among the best of the
best. During the first nine
months of 2005, buyers with Benjamins to burn purchased 93 properties
priced at $2 million or more in Chicago, according to the Multiple
Listing Service of Northern Illinois. That’s more than triple
the number of homes that sold in this range just three years ago, when
MLSNI recorded 30 transactions of $2 million or more. Those figures were
compiled by the Chicago
Association of Realtors from MLSNI data and don’t necessarily
reflect all sales in this range. While this small club
has indisputably grown larger, there also are signs that this end of the
market may be growing a little crowded. The average time these plush residences
spent on the market rose at about the same rate as their number –
to 224 days in 2005 from 87 days in 2003, according to CAR. The rise of the ultra-luxury
market in Chicago has been well documented. Suburban baby boomers whose
college-aged kids have flown the nest are the biggest buyers. As they
browse for city condos, many are trading on the significant equity they’ve
built in massive suburban homes during the ‘90s real estate boom.
Others are looking
for second homes or in-town residences. They want to enjoy the expanded
cultural amenities, restaurants and buzz of a city that’s cleaner,
safer and more polished than it’s been in decades. They want commutes
they can walk and a life without lawnmowers. Out-of-state buyers
from Indiana, Michigan and elsewhere also want a piece of the action,
along with homeowners in older downtown towers who have decided it’s
time to trade-up. Defining
luxury The gauge for ultra-luxury
housing has probably moved from $500 a square foot to $600 per square
foot, and experts say that yardstick will likely shift upward again in
the near future. Yet some longtime
observers, such as Parisian-born architect Lucien
Lagrange, the designer behind some of Chicago’s top luxury developments,
including 65 E. Goethe and The
Elysian, say that a number of current developments that meet the lofty
price criteria don’t qualify as ultra-luxury. “They are not
luxury, they are just expensive,” Lagrange says disdainfully. In
his view, luxury is derived from things such as the quality of building
materials, stone for one. The concrete favored by some developers is not
a luxury material, he says. At press time, New
Homes counted 16 new-construction highrises offering luxury and ultra-luxury
condos and penthouses. What does that kind
of money buy? The
Legacy at Millennium Park is one of several new kids on the block,
a slender 73-story tower planned for 60 E. Monroe St. The team behind
this development, Mesa and Equity Marketing Services, is the same one
that built the successful Heritage at Millennium Park, and again they’re
using architects Solomon Cordwell Buenz
& Associates. At press time, condos
in the development had tentative pre-construction prices ranging from
the mid-$300s for a one-bedroom to around $4 million for a penthouse.
If you are more apt
to shop ‘til you drop, the location of The
Residences at 900 might be more your speed. This unusual conversion
was born when JMB Realty Corp. lost a major tenant at what’s commonly
known as The Bloomingdale’s
Building, 900 N. Michigan Ave. What to do with eight vacant floors
in a sluggish office market? Go condo, of course. The developer is converting
floors 21 through 28 of the 66-story building, which includes a vertical
shopping mall and The
Four Seasons Hotel as well as original condominium units. The 48 new
condos range from $1.2 million to $4.6 million and will have their own
association. Delivery is planned for 2007 at what is now the second conversion
of office space to condos on coveted North Michigan Avenue (The
Palmolive Building, at Walton and Michigan, is nearing a sellout). If you would prefer
to gaze on a vista of Lake Michigan and the South Loop’s Museum Campus,
then The
Enterprise Companies’ One Museum Park, underway at 1215 S. Prairie
Ave., may be more your style. This showboat of a building has some units
priced under $380 a square foot, but with others at the $600 per-foot
mark, this Museum Park tower is bringing a new level of luxury to the
South Loop. Other ultra-luxury
developments, including The Elysian, at 11 E. Walton St.; Trump
International Hotel and Tower, at 401 N. Wabash Ave.; and Waterview
Tower, 111 W. Wacker Drive, have pushed luxury to new heights by incorporating
five-star hotels and services ranging from health clubs and room service,
to 24-hour concierges and on-site housekeeping. Designs range from
the ultra-modern 30 W. Oak,
reminiscent of Mies van der Rohe, to iconic Chicago buildings, which once
housed offices and hotels but have been lovingly converted to residential
buildings steeped in fascinating history. In that category is The Palmolive
Building, at 159 E. Walton St., and The
Ambassador, formerly The Ambassador West Hotel, at 1300 N. State Parkway. Each project claims
to be unique, and in a sense, each one is. “Everyone has
to do something a little different to move their product off the shelf,”
says Peter Birmingham, of Schillaci
Birmingham Development, developer of 30
W. Erie. The boutique design of 30 W. Erie means just two units per
floor in a more intimate setting. LR
Development Company is promoting eco-friendly high-design at 340
on the Park, 340 E. Randolph St., complete with bamboo flooring. For
beachgoers, 600 N. Lake Shore Drive
represents a rare chance to buy new construction on the lakefront. Beyond
the Gold Coast
The luxury residential
market also has pushed south to the Loop / New East Side, and even into
the up-and-coming South Loop. The unveiling of the long-anticipated Millennium
Park created a seismic mini-boom in the market. A number of high-end
highrises are reaping the benefits of proximity to Chicago’s newest
civic jewel, and a couple have even worked the park into their names. The eco-friendly 340
on the Park development, the fast-selling The Heritage at Millennium Park
and now, The Legacy at Millennium Park, are all poised to benefit from
a prime location that was once a lonely, isolated and industrial corner
of the city. “[Millennium
Park] has become to Chicago what Central Park is to New York,” says
Kathryn Chez of Coldwell
Banker. Andy Warner, of Equity
Marketing Services, saw the potential of the park when he was selling
The Heritage, but even he sounds surprised by the impact it and surrounding
development have had practically overnight. “When we first
opened The Heritage, that area was deserted,” says Warner, who is
now marketing The Legacy. “On Saturday, I went around the corner
to the Starbucks on Madison. It used to be closed on Saturdays. This Saturday
I went and I couldn’t wait; there were too many people in line. We’re
creating a 24-7 environment, which is what the mayor has pushed.” Market
predictions
The $500-a-square-foot
measure has become commonplace due to a growth in construction costs and
land values, says Jim Letchinger of JDL
Development. While prices are pushing
the $500 to $700 range, an abundant housing stock and a competitive market
will likely keep prices at that point for some time, he believes.
The answer, of course,
depends on who you ask. Gail Lissner, of housing
analyst Appraisal Research
Counselors, says that in the second quarter of 2005 around 2,700 new
ultra-luxury units were being marketed. That’s a historically high
number, but about 2,100 of those are under contract, and only about 600
remain unsold. These homes are projected for delivery through the year
2008. “That’s
not an alarming number of units,” Lissner says of the 600 unsold
units, noting that more projects are in the pipeline. But, she says, not
every project on the drawing board will reach fruition as developers compete
for the same pool of investors. And though talk of
a housing bubble abounds, Charles Huzenis, of Jameson
Realty Group, points out that many high-end buyers are insulated from
rising interest rates. These are buyers who often pay in cash and have
second homes in places like Florida, Huzenis says. They are the types
of buyers Huzenis hopes to attract to his 50
E. Chestnut project, a 34-story development of full-floor units priced
from $2.3 million to $3.1 million. Prominent architect
Larry Booth, who has designed several top-drawer projects, such as the
current conversions of both The Residences at 900 and The Palmolive Building,
believes Chicago bypassed the sorts of manic real estate bubbles that
have consumed the coasts. In Chicago, he says, prices will hold up. David
Pisor, developer of The Elysian, agrees, and cites strong performance
at his project as evidence. But others see signs
of a potential slowdown. Some recent projects
saw early, healthy absorption of buyers, but have been slow to close out
sales, says Jim Kinney, of Rubloff Residential
Properties. He says if that trend continues, developers will slow
down the currently brisk rate of development. But Kinney also noted that
Trump and The Palmolive Building are enjoying steady, consistent success,
while 840 N. Lake Shore Drive is seeing good returns on the resale market.
MCL
Companies’ Michael Maier, developer of Riverview II, which is
about 80 percent sold, says there seems to be a slight slowdown in buyers
from the North Shore and a leveling off of prices. Future
projects
“There has been interest internationally, from Europe, South America, a law firm in London,” Carley says. “We are Midwestern, so it’s exciting.”
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For
the true high-flyer nothing tops buying a penthouse, but buying the biggest
pad in town right now, at Trump International Hotel & Tower, will
set you back a cool $28 million. The 14,000-square-foot abode, which comes
finished on the 89th floor of the River North development, fits the jaw-dropping
ideal of a penthouse, but units marketed as penthouses today often are
at odds with the classic definition.
Now
that corporate lawyer Jim Jacobson and his wife Mindy, a nurse, have purchased
a luxury condo at the Elysian, they can finally pull out their bulging
folder of Architectural Digest clippings and get to work.
A
few years ago, almost no one in Chicago had heard of hotel condominiums.
The concept, which mixes a traditional condo with a luxury hotel, was
well known in Florida and New York, but even with its booming downtown,
Chicago did not have the same level of appeal for upscale part0time residents.
How times have changes. The rapid expansion of a local market for hotel
condominiums is a sign, experts say, confirming Chicago's status as a
world-class city.
The
ultra-luxury market is dominated by new construction, but some of Chicago's
top developments fit into the "adaptive reuse" category, a slot
more commonly associated with affordable West Loop lofts than Mag Mile
condos. When it comes to location and charm, however, older is better
in the eyes of some buyers.
It
has been more than 15 years since the principals behind CBI Custom Homes
started their business by purchasing a vacant lot at a tax sale with a
credit card. Today, the Marlowe family, Jim and his sons, Brett and Todd,
have molded the company into a premier design-build firm that rests on
a philosophy of architectural purity and reverence for craft as they cater
to buyers of high-end custom homes.
There's
luxury pricing and then there's luxury living. According to Paul Bertsche,
of CA Development, one does not have to follow the other.
If
it is ever possible to pity buyers of new ultra-luxury condos in downtown
Chicago, now is the time. Never has there been more Grade A buildings
to choose from in a broader range of locations and architectural styles.
As
competition for the empty nester dollar grows, developers and the market
as a whole, are redefining just what constitutes ultra-luxury turf. Trump
International Hotel & Tower set the tone when The Donald decided to
break ground at 401 N. Wabash Ave., the site of the former Sun-Times Building,
on the edge of River North. The high-profile project has commanded record
prices and experienced strong sales. It’s clear that an area more
known for housing billionaires in boardrooms than in bedrooms, is now
considered part of the ultra-luxury market.
Given
the large number of units under construction in what is still a comparatively
small niche of the housing market, will the party soon be over? Is the
market nearing a saturation point? After all, there are only so many millionaires
shopping for new homes in Chicago.
The
Fordham Company made a big splash when it announced