Penthouses aren’t what they used to be – but some are better than ever
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 is setting real estate records and causing jaws to drop citywide.
Chicago’s penthouse landscape has shifted in recent years and the units marketed as penthouses today often are at odds with the classic definition. Instead of naming a solitary unit just under the rooftop the penthouse, developers have expanded the term to include a selection of units that are larger and command better views in the upper echelons of a building (or sometimes, not so upper), and perhaps have more cachet than the regular units below them.
“People use any technique possible to try and achieve their sale,” says Charles Huzenis, of Jameson Realty Group. “A penthouse isn’t what it used to be.” Huzenis doesn’t necessarily think this is a positive or a negative trend. “It’s just a change,” he says.
As everyone knows, the penthouse is the most sought home in any highrise. That wasn’t always the case, however.
Once upon a time, the top floor of a building was actually the least desirable place to be. But in the 1920s, after the advent of the elevator, penthouses gained popularity in cities like New York and Paris. The original penthouse was a sort of mini-building constructed on top of a highrise. It was set back from the edge of the main roofline to allow for a spacious terrace, often around 800 square feet, as opposed to a balcony, says Jim Kinney, of Rubloff Residential Properties.
“It was like the old Superman-Lois Lane-style apartment,” Kinney says. “It had a terrace, a place for Superman to land.”
Unlike New York, Chicago has had few highrises with terraces, partly because so much of the highrise housing stock is composed of rental buildings converted into condos in the 1970s. Locally, the term penthouse has come to mean simply the top floor of a building.
Today’s penthouses
In Chicago today, a penthouse might share a floor with up to three other units, experts say. Prices range from the $600s at 1111 Wabash, in the South Loop, to $10.7 million for a duplex at The Palmolive Building, on the Magnificent Mile.
So what exactly constitutes a penthouse in the Chicago market right now?
“The definition [of a penthouse today] is based on [the unit’s] placement in the building, views, ceiling height, lifestyle, services available and the unlimited ability to customize,” says Laura Molk, of LR Realty, which is selling 17 penthouses on the five top floors at 340 on the Park, a planned 62-story highrise that will overlook Millennium Park at 340 E. Randolph St.
While the number of people who can afford to buy a 10,000-square-foot full-floor unit constitutes a small club, many more have the means and desire for a large unit with fewer neighbors, higher ceilings and killer views. Developers have catered to this group in recent years at a wide range of new highrises, where they have included multiple floors of “penthouse” units.
At Waterview Tower, the 89-story highrise planned for 111 W. Wacker Drive, penthouses are offered on levels 68 to 84. On the lower levels, they start at just under 3,000 square feet, for $2.148 million.
The penthouses are configured with three per floor, then two per floor. The top six stories have just one unit per floor, and the top penthouse, an 8,070-square-foot unit, sells for $7.5 million. Three of the six are sold. Features include 11-foot ceilings, Poliform kitchen cabinetry, Miele appliances, radiant heating, floor-to-ceiling bay windows and computer technology that allows residents to control heating, lighting, butler, maid and other services remotely with a Palm Pilot or a cell phone.
The building has a 60-foot lap pool, a Whirlpool, sauna and steam rooms, an exercise facility, and an 8,000-square-foot landscaped garden with a sundeck and a pet recreation area.
But no matter what the level of luxury, how many penthouses can one building have?
“We use the term ‘penthouse’ to help sell, because people like living in a penthouse,” says Dorrie Freiman, of developer Teng and Associates. “It has the cachet – it’s ego-driven too.” Freiman says the 89-story Waterview Tower will be the third highest residential building in the city, so many of the floors well below its roofline are still much higher than the top floors in shorter buildings, where the penthouse might be on the 69th floor. Waterview Tower has earned the term “penthouse” for its premium units, she says, by virtue of their height, space and privacy.
So, if height is the standard, what differentiates the top floor?
“Our top [floor] is a mega-penthouse,” she says.
But purists, such as one recent browser at Waterview Tower, are not necessarily buying into the redefinition of penthouses. When told the top-floor penthouse was sold, but another full-floor unit was available just below it, his response was simple. “He said, ‘It’s not the same, a true penthouse is [at] the top,'” Freiman says.
Customized luxury
Today’s penthouses frequently offer the same high-quality finishes that are in the luxury units below them, but might also have more customization options. Customization is so expected in the high-end market that many penthouses are sold as raw space that buyers complete themselves, not only choosing finishes, but also moving walls and constructing rooms to fit their needs. This is the case at The MCL Companies’ RiverView II, 415 E. North Water St., where one of two “raw” duplexes, a 9,200-square-foot condo, is on the market for $6 million.
“There’s no way to anticipate what somebody wants in a $6 million building,” says Michael Maier of MCL Companies. “They are going to think, ‘Well gosh, I want what I want.”
If a moment of Zen is what you want, then maybe you can find it. Businessman Jon Butcher is constructing a Japanese Garden in a 13-by-13-foot room in the penthouse he is buying at Waterview Tower, complete with pools, fountain and granite boulders. Planning is underway to realize his dream, says Freiman, of developer Teng and Associates.
In stark contrast to Butcher’s penthouse fantasy is the old-world ambience and dash of history offered at the 7,880-square-foot art deco duplex penthouse going for $10.7 million at The Palmolive Building.
With the building designated a historic landmark, the developers have restored or recreated many of the unit’s vintage details dating from the days it served as office for the chairman of The Palmolive Company. The building was also the headquarters of Hugh Hefner’s Playboy Magazine for a time.
Buyers have the option of purchasing the penthouse raw or having it finished with a range of top-quality fixtures included in the price. It features a magnificent lobby, mahogany walls, a fireplace, media room, library, express elevator and extensive master bathroom and dressing rooms. It also boasts magnificent views of Lake Michigan, the Gold Coast and the city skyline. One of the floors has nearly 630 square feet of terrace space. As with purchasers of all The Palmolive Building’s units, the penthouse owner will have access to a private concierge, 24-hour door staff and valet service. All residents will also enjoy the comforts of the private Beacon Club, which features a wood-paneled lounge, library, caterer’s kitchen and wet bar, along with a state-of-the-art fitness center, whirlpool and steam rooms.
“This is a location thing; it’s a more established location, and Palmolive is an intimate building, with a sense of history,” says Katherine Chez of Coldwell Banker, which is marketing the development.
Trump-style
So what does $28 million get you at Trump Tower?
Ceiling heights that rise 16 feet, a level virtually unheard of in a new Chicago highrise. The height alone adds grandeur, says Trump sales director Tere Proctor, but the sensation is even more pronounced when coupled with floor-to-ceiling glass windows overlooking the beautiful Wrigley Building and the confluence of the Chicago River and Lake Michigan.
Trump is a hotel condo project, so all units have the convenience and luxury of the five-star hotel in the building. That includes a 24-hour doorman and concierge, a 60,000-square-foot health club, a five-star restaurant downstairs, a 1.2-acre river-walk with 500 linear feet along the Chicago River and a dog run.
Luxury finishes inside the units include Brazilian hardwood floors and individually controlled all-season air conditioning. In the kitchens you’ll find Snaidero Italian wood cabinetry, Miele appliances, granite countertops and full-sized backsplashes. Lavish bathroom features include limestone walls and flooring, Dornbracht fixtures and an over-sized bathtub.
Buyers also have the security of knowing that their investment was produced to the highest standards of billionaire Donald Trump himself, Proctor says.
“In a year I think we will look back and think this is a bargain,” she says, noting that other luxury units on the resale market are fetching $1,200 a square foot. The $28 million Trump penthouse comes in around $2,000-a-square-foot, but that’s for brand new construction in the highest profile unit in Chicago’s highest profile project.
What you won’t get in the penthouse is a balcony, because of the high winds on the 89th floor. Parking will cost another $65,000 to $85,000. At press time, Proctor said she was in negotiations regarding the penthouse with an unidentified out-of-state buyer. Trump offers a total of nine penthouses on four floors, and six of them have already been sold, three to Chicagoans. Buyers vary from out-of-state businesspeople to empty nesters, Proctor says.
Empty nesters also are the prime target for Jameson Development’s 50 E. Chestnut project. Here, every floor of the 34-story building, located just off the Magnificent Mile, is a penthouse, says Jameson’s Steve Mandell. With pricing from $2.3 million to $3.1 million, he is confident of luring empty nesters who don’t want to relinquish the generous floor spaces they are accustomed to in their suburban homes.
A growing market
Much has changed in the year since Forbes magazine listed the Four Seasons Residence, a 5,152-square-foot penthouse built in 1989 atop the Four Seasons Hotel, as Chicago’s most expensive penthouse entered in the Multiple Listing Service of Northern Illinois. The residence was listed at $6.695 million, down from the $7.5 million the seller was asking for six months’ prior. Currently, the seller, who had bought the penthouse in 1989 for just under $2 million, has dropped the asking price to $4.99 million.
That price would represent major appreciation – an increase of around 150 percent in 16 years – but the fact that the owner felt comfortable testing a price tag of $7.5 million, then $6.695 million, then dropped it substantially reflects the state of this small niche. Chicago’s market for ultra-luxury homes, including penthouses, has expanded rapidly. Both new construction and resales have hit new highs, going for prices that would have been laughed at a few years ago.
The trend is reflected in the optimism behind the initial asking price for the Four Seasons Residence penthouse, but the price correction reflects growing market times, especially for the highest of high-end product, and a corner of the market that some say is starting to look a little crowded. Superbly located one-of-a-kind homes like the Four Seasons Residence penthouse are facing stiff competition from new construction selling in the $6 million range, says listing agent Pamela Miles of Rubloff Residential Property.
The very top penthouses, however, offer this consolation: no matter what happens in the local housing market, there is not another unit in the city like the $28 million top unit at Trump or the Palmolive’s $10.7 million penthouse. The best penthouses are true originals, and though the pool of potential buyers is small, they’re also better insulated from trends in interest rates, local housing and the overall economy.
Starter penthouses
At a lower echelon, move-up buyers interested in penthouse living should be prepared to step outside the Gold Coast.
Penthouses in the West Loop sell for around $350 per square foot, while luxury product near Michigan Avenue is currently in the $600 to $1,000 a foot range, says Charles Huzenis, of Jameson Realty.
New towers underway or recently completed in the South Loop also offer a wide variety of comparatively affordable penthouses. The 34-story highrise at 1111 S. Wabash St., for instance, has penthouses starting on the 30th floor, with a 2,084-square-foot space priced at $627,010, says Deborah Chiet of developer The Gammonley Group. These penthouses, which fetch more than $1 million at the high end, feature views of the Museum Campus, Soldier Field, Grant Park and Lake Michigan.
“Our buyers are not just empty nesters – we are seeing successful professionals in their 30s and 40s,” Chiet says.