High society: fresh designs, buyer perks prevail in market for new condo towers

1720 S Michigan

Riding a construction elevator up the side of an unfinished high-rise is not for the faint of heart. Only a rattling wire cage separates you from the vastness below – the shrinking cars and pedestrians, the blue haze of the lake. The ride to the top of 600 North Fairbanks, the 41-story tower designed by German starchitect Helmut Jahn, offers a panorama of the condo towers underway in Streeterville: Cityfront Plaza, across the street, at 240 E. Illinois St.; Parkview, at 445 E. Illinois St.; and 550 St. Clair, among others.

If that elevator could somehow take you past the roof, into the downtown sky, you’d get a bird’s eye view of a city peppered with construction cranes. New Homes in mid-July counted at least 54 residential high-rise developments of 15 or more stories on the market. A dozen new-construction high-rises of 10 to 14 stories also are planned or under construction, and nearly 20 high-rise buildings are being converted from rental or other uses into condominiums.

Given this bumper crop of high-rises, the cooling market for residential real estate might seem troubling. In the first quarter of 2007, the pace of sales at downtown condo developments receded to levels of a few years earlier, according to Gail Lissner, of housing analyst Appraisal Research Counselors. Around 22 percent of downtown units in newly announced projects were placed under contract or reserved in the first three months of ’07, down from 44 percent in the first quarter of 2006.

But fears of a market meltdown are likely exaggerated, at least so far, since developers have been rolling out fewer new projects downtown. The slower pace of development means that the number of unsold units didn’t change substantially despite slower sales, according to Lissner. Relatively few completed condos were sitting empty downtown during the first quarter – just 3 percent of the total unsold inventory, she says.

Buyers’ market
The market slowdown has prompted some developers to proceed with caution. Sutherland Pearsall Development Corp. has stopped actively marketing 535 St. Clair while the builder reconfigures plans for the 38-story tower designed by Brininstool & Lynch. “It’s a buyer’s market, and we’re finding that buyers are looking for particular types of units,” says Jerry Houlihan, director of marketing for Sutherland Pearsall. “We’re designing units to meet those needs.”

Others are forging ahead. In mid-July, Related Midwest planned to start marketing in late August for The Peshtigo, a 59-story tower at 515 N. Peshtigo Court, in Streeterville, according to Sales Manager Mike Kelly. Designed by Ralph Johnson, of Perkins & Will, the project will have about 300 units with one to three bedrooms and one to four bathrooms. Parking will fill the first eight floors, and the ninth floor will be devoted to amenities, including a pool, a deck, a spa and a gym. Prices will range from the $480s to $4 million, Kelly says. Construction is scheduled to start after the first of the year – around the same time that another Related Midwest project, Canyon Ranch Living – Chicago, is slated to break ground.

Another Perkins & Will building will start marketing in the fall when CMK Companies launches a 48-story condo tower at 235 W. Van Buren St., according to Scott Hoskins, managing broker of CMK Realty.

With so many high-rise developments to choose from, sales agents and developers report that buyers are in no hurry.
“I have noticed that buyers are really taking their time,” says Karen Howard, sales manager for Frankel & Giles Real Estate, which is marketing Michigan Avenue Tower II, 1400 S. Michigan Ave. David Wiencek, of At Properties, which is marketing Lexington Park Condominiums, 2138 S. Indiana Ave., says, “People have done their research, and they’re really doing their homework.”

There’s plenty of homework to do, since the current batch of high-rise developments presents buyers with a broad range of options. Prices per square foot in the first quarter of this year ranged from $202 to $1,353, with an average of $450, according to Appraisal Research. Whole prices in downtown developments ranged from the $220s to $21 million in mid-July, though most were between $250,000 and $2 million.

Buyers can save, though, as developers roll out incentives to stoke sales. In June, Provence Development Group began offering free upgrades worth $7,500 at Aristocrat Tower. Both Library Tower and Trio began offering $10,000 price discounts in May, and in mid-July, Marquee was offering a $10,000 “buyer incentive” on the project’s first 10 contracts.

Progressive design
Most of the new condos include finishes such as hardwood floors, stainless steel appliances and stone countertops, but they offer widely varying aesthetic experiences.

CMK Companies’ 33-story condo tower underway at 1720 S. Michigan Ave., in the South Loop, will be spare and streamlined, with homes where Scandinavian furniture would not be out of place. Walk up Michigan Avenue to Legacy at Millennium Park, Mesa Development’s wedge-thin, 72-story high-rise at 60 E. Monroe St., and you’ll find the future home of another modern tower with clean lines and floor-to-ceiling glass.

Other high-rise developments, including Burnham Pointe, Museum Park Place, Mandarin Oriental Tower, Superior 110 and R+D659, also are heavy on glass, with concrete or metallic accents. New developments Vetro (Italian for “glass”) and Glashaus highlight the trend in their very names.

There are plenty of vintage-looking towers rising in the city center too. Astoria Tower and The Columbian display art deco influence, and the architects behind high-rises such as The Marquee and Library Tower seem intent on making neighbors think the structures have always been there. At the high end of the market, tony, conservative towers such as Ten East Delaware, The Ritz-Carlton Residences, Elysian Hotel & Private Residences and Lincoln Park 2520 tend toward stone, mansard roofs and frills influenced by vintage European architecture.

But even at the highest price points, modern designs are emerging. Skidmore Owings & Merrill crafted a soaring, segmented, glassy design for the 92-story Trump International Hotel & Tower, where prices ranged from the $580s to $9.6 million in early July.

The highest-profile tower on the drawing board, Shelbourne Development Group’s proposed Chicago Spire, would likely reach a new high for Chicago condo prices – and new heights of architectural daring. Whatever you think of the spiraling design by Spanish architect Santiago Calatrava (the tower is often compared to a corkscrew or drill bit), the 150-story high-rise is placing architecture front and center for Chicago’s well-heeled buyers.

Getting comfortable
To give buyers an inkling of what it will be like to live at 600 North Fairbanks, Schatz Development threw a “topping out” party in June. Guests braved the trip in the construction elevator to the 32nd floor, which had its glass walls in place but was unfinished.

Architect Helmut Jahn’s minimalist design doesn’t aim to cover up the building’s guts, so it seemed somehow appropriate to be munching on hors d’oevres and listening to jazz standards among copper pipes and heating ducts. Those will eventually be hidden, but the concrete ceilings and columns won’t, said Noah Schatz, president and CEO of Schatz Development.

Standing on the balcony, Schatz pointed out that Jahn’s devotion to minimalism is evident in the smallest details. For example, there are no mullions filling in the spaces between the glass panes on the building’s exterior – just empty grooves. The balcony itself is a paean to minimalism, with a glass barrier topped by a steel rail. Again, not for the faint of heart.

A big-name architect and a solid location have boosted sales at 600 North Fairbanks. In July the project was nearing a sellout, with just 11 of the 227 one-, two- and three-bedroom condos remaining for sale, priced from the $430s to $1.5 million, according to Andrena Rodgers, vice president of sales and marketing for Schatz.

The fact that modern architecture not only sells, but is perhaps the chief selling point, at a project like 600 North Fairbanks, represents a sea change in residential development in Chicago. Even a decade ago, builders and brokers insisted that most buyers, even high-rise buyers, would not purchase condos in a development with a progressive design.

Surprisingly, one of the harshest critics of modern high-rise designs has several to his credit, and more on the way. Parisian-born architect Lucien Lagrange stands by his design for the ultra-modern X/O, twin towers planned for 1712 S. Prairie Ave. in the South Loop, and he says there’s room for all styles in the city’s architectural landscape. But he makes his preferences clear.

“This modern architecture that everybody talks about doesn’t correspond to the desire of the society we live in,” he says. “A lot of people don’t find that comfortable. They don’t think it’s elegant. It doesn’t really respond to their values.”

Lagrange’s design for Lincoln Park 2520, from Ricker-Murphy Development, LLC, is reminiscent of Chicago architecture of the 1920s, with a granite and limestone base, a grand two-story entrance supported by classical columns and, of course, a mansard roof (a Lagrange trademark). Sales have been strong at the development, designed to be as tony as its prime Lincoln Park location. About a third of the project’s 318 units sold in April, within the first three weeks of marketing.

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