The newest trend in the luxury market? Smaller buildings with just the right bells and whistles.
A unit from CA Condos on Adams showing the kitchen and living area.
Gone are the soaring luxury condominium skyscrapers of the oughties that sported dozens of units in multiple sizes. Instead, Chicago developers are building boutique properties with fewer units and outstanding—yet very specifc—amenities. Brian Goldberg of LG Construction + Development (773- 227-2850) and Alan Lev of Belgravia Group (312-751-2777) define the shift and explain why it’s dominating the Chicago market.
Why are we seeing this spate of smaller big-ticket buildings? Alan Lev: It’s a shift in living patterns. Millennials want more fexibility and are delaying homeownership and marriage. Rather than buying in their mid- to late 20s, they’re renting. So when they’re ready to buy at 35 to 40, they need bigger first homes because they’re starting families immediately. This translates into bigger units with more bedrooms and bathrooms. But it’s also economics, thanks to the times. Risk is a big issue. Land and construction costs have increased enormously, so fewer units coupled with the higher demand we’re seeing now means buildings sell out. Brian Goldberg: Yes, banks don’t want to take chances, so they’re requiring 30 percent presale rates before you can break ground. So to build something, developers are going smaller, asking buyers to put at least 10 percent down, and making [the deposit] nonrefundable to lower their risk. Also, land in the most desirable locations is really expensive, so we’re getting smaller lots, which means smaller buildings.
What about the amenities? AL: Most of these units have large foor plates, luxury fnishes, three bedrooms and bathrooms, a balcony, and at least one parking space. There’s usually a party room, exercise facility, and an outdoor roof deck, but no pool or doorman. BG: Residents want more control, and in big buildings everything is done by committee. That’s not typically an effcient process. No doormen and edited amenities keep assessments down.
What are you building that proves this premise? AL: We’ve done three—CA23, CA3, and now CA4 at 1130 West Adams Street, with 50 units that are all three-bed, three-bath, and 2,000 square feet with one or two parking spaces. It sold out before construction started in 2014 and is 75 percent closed now. We’re breaking ground on 367 West Locust Street in the fall with 45 units, and 10 of them are two-bedrooms because of the size of the site. We’re marketing them now, and prices start at $450,000 for the smaller units and $685,000 and up for the larger ones, with parking at $35,000 a spot. And our next project will be a 42-unit, 13-story high-rise at 403 North Wabash Avenue, just north of Trump Tower, also selling this fall. Units will range from 1,800 to 2,600 square feet, have unobstructed river views, and cost about $700 per square foot. BG: We broke ground on The Ronsley at 676 North Kingsbury Street in April with 15 of its 41 units sold. Units range from 1,600-square-foot two-bedrooms starting at $950,000 and go to a fve-bedroom penthouse for $5.2 million, but many are three-bedrooms. Parking is $50,000 a spot or $72,000 for a tandem.