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Search ultra-luxury developments
Builders have dramatically expanded luxury home choices, but is this small club getting a little crowded?Â
by Alison Soltau
Finding the ideal home is never easy, but for those shopping in Chicago’s ultra-luxury new-construction market, it’s becoming tougher still. Today, having millions of dollars to spend on a newly built dream residence opens the door (which comes in oak, walnut or teak), to an unprecedented range of choices. High-end pricing pushed to new levels in recent years as Chicago’s upscale developments became ever more lavish, and builders have tested the depth of this exclusive niche by planning and building more ultra-luxury homes than ever before.
Would you like to live in a handsome Mag Mile high-rise, close to retailers like Tiffany’s and Saks? Perhaps you’d prefer a condo in a modern tower overlooking Millennium Park? How about a waterfront manse far from the rat race in Lake Forest?
Figuring out how best to live large was never so hard. The wealthy used to gravitate toward the Gold Coast or Lincoln Park or a North Shore suburb. Easy. But Chicago has become a world-class city, and suburban empty nesters, affluent professionals and out-of-towners have been buying extremely high-end homes – whether primary or secondary – in neighborhoods that once had few homes of any sort, much less those of the ultra-luxury variety.
In addition to a wider choice of locations, ultra-luxury buyers now face a variety of architectural styles at price points that used to be the exclusive domain of classic, vintage-looking buildings. The level of amenities and services at these projects has likewise expanded, influenced by Chicago’s hotel condo developments – yet another new option for well-heeled buyers.
Choices have grown with the amount of product in the pipeline, leading some analysts to wonder if this necessarily small club – the highest of high-end homes – is looking a little crowded. Only time and sales reports will tell. Meanwhile Chicago is taking Burnham’s imperative to make no little plans at face value.
Luxury defined
What constitutes an ultra-luxury home in Chicago? In the downtown high-rise market, ultra-luxury condos are priced upward of $600 a square foot, although some market observers say the yardstick has shifted as high as $700 a foot. Units at developments such as The Ritz-Carlton Residences and Trump International Hotel & Tower average a little over $1,000 a square foot, taking the local market to new heights.
New Homes counted 17 high-rise developments marketing ultra-luxury condos in downtown Chicago in late 2006. In the northern suburbs, condo prices rarely pass $400 a square foot, and only one development is currently in this range, Winthrop Properties’ Winthrop Club Condominiums, in Evanston.
A quick survey of new low-rise housing in the city revealed at least eight multi-unit developments with single-family homes or townhouses priced at $3 million or higher, and more individual spec houses in this range also are for sale. At press time, New Homes counted more than three-dozen new single-family homes listed for $3 million or more on the North Shore, and fueled by the growth of teardowns, other new homes at this price point are on the market in suburbs ranging from Hinsdale to Morton Grove.
Volume increase
Some real estate experts have long argued that Chicago’s high-end developments never reached high enough. There were plenty of buyers willing to purchase new multi-million dollar units in Chicago, these observers said, but because the offerings here were limited, buyers purchased less elaborate homes in the city and splurged on showpieces in Arizona, Florida or California.
But more and more, the Chicago home is the showpiece, a trend reflected in the city’s volume of high-end sales. In downtown Chicago during the first nine months of 2006, buyers with mega-bucks purchased at least 122 homes priced at $2 million or more, according to Multiple Listing Service of Northern Illinois figures compiled by Rubloff Residential Properties. That’s up more than 300 percent from 2003, when 30 transactions in this range were recorded, according to a Chicago Association of Realtors analysis of MLSNI figures. MLSNI records both resales and new-home sales but doesn’t reflect all transactions.
Market times generally have grown as the superheated real estate market of recent years has cooled, but they’ve increased most noticeably at the highest price points. The average time it took to sell city homes priced at $2 million or more during the first nine months of 2006 was 212 days, compared to 87 days in 2003, according to MLSNI.
In the northern suburbs, high-end homes sit on the market like beautiful wallflowers. In upscale Winnetka, 25 homes priced from $4 million to $10 million were listed during the first nine months of 2006 and only three sold, according to MLS statistics compiled by Coldwell Banker Residential Brokerage Winnetka South. During the same period in 2005, 15 homes were listed and two sold. Market times are always longer for properties at the highest price points, but the current “transitional market” and the gap between ambitious building and slower sales have significantly lengthened the wait.
Koenig & Strey GMAC Real Estate agent Nicole Lindholm has experienced the slow market times firsthand. Her custom-builder husband, Richard Marc, built a 6,000-square-foot home near the lakefront in Lake Forest. The couple decided to move to Florida, and listed the property for $8.9 million six months ago. Since then, they’ve dropped the price to $6.9 million. “It’s priced to sell,” Lindholm says.
The departure of empty nesters for high-rise condos in downtown Chicago has left more homes on the market and depleted the pool of buyers, according to Coldwell Banker agent Eve Bremen.
Suburbanites downsizing to a lower maintenance lifestyle make up 44 percent of buyers at Waterview Tower, 111 W. Wacker Drive, says sales director Dorrie Freiman, adding that the average buyer at the development is about 51 years old. About 75 percent of Waterview Tower buyers come from Illinois, and the rest have business or family ties to Chicago.
“We see a lot of hedge-fund traders and people in the financial market who have done very well,” says James Kinney, president of Rubloff Residential Properties, which is marketing The Ritz-Carlton Residences. And they aren’t just empty nesters. “A lot of these buyers tend to be younger than you think – in their 40s, doing well with inherited money,” Kinney says.
Lakefront living
High-rises, of course, aren’t the only option for new ultra-luxury homes in Chicago. In Lincoln Park and the Gold Coast, custom builders such as BGD&C create mega mansions for captains of industry and high-flying commodities traders. The commanding masonry homes often feature classical European architecture and range from about 4,000 to 9,000 square feet.
Swimming pools and private theaters are popular. Projects of two or more high-end single-family homes are rare in the city, but developer Stuart Rose’s Geneva Terrace Estates in Lincoln Park is an exception. The 22 houses, priced from $2.3 million to $3.7 million, have 5,200 to 7,800 square feet of living space and include radiant heat, custom millwork and high-end fixtures and appliances.
For a cool $1.5 million to $2.5 million you can find that rare commodity – a townhome by the lake in the heart of downtown. Magellan Development Group is marketing three-bedroom townhomes and townhouse-style condos at the Parkhomes at Lakeshore East, a mixed-use community nestled between Wacker Drive and Randolph Street on the New East Side.
For those who fancy living on the lake but would prefer to have a private beach, there are a variety of homes in the same league as that $6.9 million Lake Forest home mentioned above. The five-bedroom house is set on 1.5 acres and has a home theater, a wine cellar and seven fireplaces. If your budget isn’t quite that high, Red Seal Homes is selling 15 single-family houses priced from $1.5 million to more than $2.3 million at The Enclave at Sheridan Pointe. The two-story homes, which have up to six bedrooms, are located a block from the lake at the border of Wilmette and Evanston.
Starchitects shine
If you equate the high life with high-rise living, units at Winthrop Club in suburban Evanston are priced from $400 to $500 a square foot, and come with stainless GE Profile appliances, granite countertops and Whirlpool tubs. The 15-story tower has a swimming pool, a fitness center, and views of the Chicago skyline and the lake.
In the city, the sky’s the limit for high-rise buyers. Options range from intimate historic buildings such as The Ambassador, a 38-unit former hotel being converted to condos, to commanding glass high-rises such as Trump International Hotel & Tower, which has 472 condos and the amenities of a five-star hotel.
European-influenced architecture has long dominated the luxury high-rise market in Chicago, and Parisian-born architect Lucien Lagrange continues to cater to classical tastes in tony projects. Current high-end developments designed by Lagrange include The Ritz-Carlton Residences, Ten East Delaware, The Elysian Hotel and Private Residences and the upcoming Lincoln Park 2520, which is still on the drawing board.
But the idea that only vintage-looking architecture will sell an ultra-luxury development has disappeared. About half of the ultra-luxury developments on the city market are glassy modern towers.
The expansive glass windows of slender buildings such as Solomon Cordwell Buenz’s The Legacy at Millennium Park and Mandarin Oriental Tower overlook spectacular Millennium Park. Cleverly designed floor plates in the east and west towers of Pappageorge / Haymes’ One Museum Park give homeowners panoramic views that stretch from Soldier Field to Millennium Park in a building that steps down from the top floors with a dramatically unfolding façade.
These and other towers have proved that progressive architecture does have an audience at the uppermost price points. The most cutting-edge design for an ultra-luxury project, however, is still in planning. Irish developer Garrett Kelleher is gearing up to market luxury units at 400 North Lake Shore Drive, the 2,000-foot project conceived as The Fordham Spire.
Kelleher’s Shelbourne Development bought the high-profile Streeterville site from The Fordham Company in July. Spanish architect Santiago Calatrava’s dramatic corkscrew design has won praise from critics in Chicago and attention from watchers around the world. At press time, prices for the 300 residences at the tower, which could be the tallest in North America, were expected to range from the $600s to $5 million.
Refined finishes
If the exteriors of these buildings are designed to make statements, the interiors are at least as showy. Expect marble and limestone tiles; oversized air-jet bathtubs and rain showerheads; and designer kitchen cabinets. The Palmolive Building has cabinets by Poliform, and Mandarin Oriental Tower offers Valcucine. Some homes are designed for high-society entertaining: the dining room walls of homes at Ten East Delaware have pocket doors, so that the hired help can slip in and out unobtrusively.
Eight-foot ceiling heights are passé, by the way – 10 feet is the new standard (all the better for hanging artwork). Ceilings soar to 18 feet in the penthouse at Trump Tower.
Home theaters and media rooms are popular. Flat-screen TVs pop out from faux fireplaces. Ethernet touch-screen technology allows residents to summon the car from the valet, and when they’re not in residence they can draw the blinds and turn on the lights from anywhere in the world via the Internet.
Five-star service
Swimming pools, fitness centers and spas are the norm at many of the new high-rises. To stay competitive, developers are upping the ante, providing the services of five-star hotels. Hotel condo developments such as The Elysian Hotel, Waterview Tower and Trump Tower have been offering maid and other services, and so are their newer competitors. High-rises that don’t have in-house hotels have brokered arrangements with nearby hotels and restaurants to provide top-of-the-line services. Some services are covered by assessments, others are pay-per-use.
Need someone to walk Fido? Too busy to drop off your dry cleaning? Want to return from vacation to find the fridge stocked with Dom Perignon and organic groceries? All this and more can be arranged at many ultra-luxury high-rise developments.
LR Development Company’s planned River North high-rise, Canyon Ranch Living, offers residents on-site access to nutritionists, physical therapists and other health professionals who can design and monitor diets and exercise programs.
Young Lake View couple Rachel and Randy Groleau bought a two-bedroom unit and a penthouse at Waterview Tower partly because they work long hours and hope that the many services available there will make life easier.
“Having a maid service for the cleaning is great and hopefully gives us more time to go to the spa or work out,” Rachel says.
Market forecast
As developers vying for buyers’ pocketbooks continue to one-up each other, the question becomes just how many buyers are out there for new ultra-luxury homes? Are developers overreaching?
At the lower end of a very high-end market, new homes priced between $500 and $699 a square foot recorded strong sales in the second quarter of 2006, according to housing analyst Appraisal Research Counselors. But in the top echelon, where homes are priced at $700 a square foot and up, things are getting a little crowded, Appraisal Research says.
“Demand continues to be very thin for ultra-luxury units, with the market becoming more competitive as new project announcements dilute market share … and people have a lot of new-construction and resale choices,” says Gail Lissner, of Appraisal Research. “But the good news is that it’s a small club.”
Some developers are optimistic about the high-end market. “Eleven thousand Americans turn 50 every day, and that will happen through 2009,” says David Pisor, of Elysian Worldwide, which is marketing The Elysian Hotel. “The luxury end of the market hasn’t even begun to be tapped.”
James Kinney, of Rubloff, says the very high end of the market appears to be “holding up well.”
“You can’t have a very deep market, but there is an elite level of very demanding people looking for these,” he says. “There’s been a natural spiraling up [of prices]. Is it sustainable? I think that’s a question, but people are always looking for something new.”