Like a phoenix rising from the ashes, new luxury construction is born again and blossoming in Chicago—but it’s different this time around.
A model living room at the luxury high-rise.
Chicago home sales are dramatically slow—a reality reflected in 2014 year-over-year price rises of 1.9 percent for single-family homes and 1.1 percent for condos—but new luxury construction is booming. “The market’s exploding for dazzling new mini mansions,” notes Baird & Warner broker Gabrielle Weisberg. Adds Conlon/Christie’s International Real Estate founder Sean Conlon, “New multi-unit condo developments are just as hot.” Here’s why.
Why is new construction in demand right now? Sean Conlon: Basically, the industry threw the baby out with the bathwater and stopped building after the crash, so right now, new construction is like a new concept. Buyers are rediscovering it. And anyone wealthy enough to buy a property over $1 million wants what they want... and that means customized. Gabrielle Weisberg: People want turnkey properties; they don’t want to have to do any work. That’s especially true in the Gold Coast condo market, where demand is off the charts and supply is short because construction has lagged. I have lots of couples with kids looking for properties they can use as a second home now and primary home in the future.
How do you find new construction properties? GW: It’s easier for high-rises since they get covered in the press, but even when something is announced and the sales office isn’t open yet, it’s likely that some of the prime units are already gone. It’s really about a broker knowing the market and what their buyer wants and needs. I sit on the zoning board of the Gold Coast Neighbors Association, so I know about new developments before the fact. SC: We’ve turned the new home buying process into an ecosystem. Our brokers have a buyer in mind, then find the land and get a builder to develop the deal and handle all the sales issues for the developer and buyer. It’s easy for buyers because it gives them an edge. We’re a one-stop shop and have a stable of 25 to 50 builders we’ve groomed for years. We know their capabilities and the quality of their work.
Sean Conlon and Gabrielle Weisberg.
What do buyers want now? SC: Definitely single-family homes, but a year ago we realized that there’s no inventory for multi-unit luxury condos in family-friendly neighborhoods. Not everyone wants to live in the Gold Coast or in a house. So we’re pioneering a whole new kind of luxury condo with three or four large units in a building and outside space that start a little over a million dollars. They’re especially popular near good schools, like Lincoln Park, Lakeview, and Lincoln Square. GW: Really big room sizes, high ceilings, large kitchens, and en suite bedrooms are always in demand, but right now buyers also want a good separation of public and private areas. A home’s flow has to make sense. And in condos, views, good amenities, and high Walk Scores are critical. People don’t want to drive to everything.
Are there any properties you really admire? SC: We have so many in-progress [homes] with single-families going up at 1243 West Wrightwood Avenue (marketed by Jamie Connor for $3.3 million) in Lincoln Park; 1649 West Grace Street (marketed by Tim Sheahan for $2.8 million) in Lakeview; and two more in the works in Bucktown. GW: For new luxury condos, it’s ironic that the best stock right now was developed in 2012 and is only selling out now—2550 North Lakeview Avenue and the Ritz-Carlton Residences at 118 East Erie Street. Units are going for $1,000 per square foot at both. But hopes are high for 4 East Elm developed by DRW Holdings—the first new construction Gold Coast high-rise in almost a decade—and a just-announced project on the southwest corner of State and Walton being developed by JDL. Gabrielle Weisberg, 312-981-2784; Sean Conlon, 312-558-1082