Real estate in Chicago Illinois is heating up, evident in the sale of a downtown 60-story luxury apartment tower. Throughout the recession, Chicago had an extremely tough time. Along with a large number of layoffs, people lost their homes to foreclosure or short-sale and many residential construction jobs completely stopped.
Specific to high-end buyers, Chicago has not traditionally been at the forefront. Usually, high-dollar homes are sold in places like Los Angeles, Miami, and New York City but a growing number of people are recognizing Chicago as being a viable place to own a luxury home, this according to Curt Bailey, president of Related Midwest, developer behind the sale.
111 W. Wacker Drive
In 2011, a 504-unit building was purchased by Related Midwest. Initially, the building was going to be turned into a 90-story building containing both condominiums and a hotel but once the recession started, all work ceased. With a recovering economy, work on the property moved forward, resulting in the tower selling this past week for a whopping $328 million, which equates to $651,000 a unit. While not confirmed, rumors are that units rent from $1,700 to $12,000 a month.
Located at 111 W. Wacker Drive, Bailey stressed this particular luxury tower has a level of service that surpasses any other building in Chicago. For one thing, all amenities are state-of-the-art but there are also movie theaters, communal kitchens, world-class fitness centers, and even full-scale centers designated for business. Already, the tower is almost complete full.
According to Steve Fifield, president and founder of Fifield Cos in Chicago, a developer of high-end office properties and multifamily apartments in the Chicago area, the sale of this tower is a prime example of the confidence that major investors now have in urban markets, thanks to an increasing number of young millennials interested in moving to big city hubs.
Millennials Interest in Luxury Living
Interestingly, instead of millennials going where jobs are, corporations are going where millennials are. Not only is this because there is a large number of millennials but also, these individuals want to be in an area where they can work, live, and socialize without traveling great distances.
While exciting to see an increase in luxury tower rentals in Chicago and other big cities, this also presents some challenges. The luxury market is quickly overheating, which means as the price of rent increases and sales of homes improve, there will probably be a shift to a certain degree of renters becoming homeowners.
For Chicago, huge growth in rent is not expected but in looking at the number of units becoming available, they will easily and quickly be snatched up by the growth in population. Real estate professionals realize there is one market not getting enough attention, which is the market of luxury rentals.
For this reason, Related Midwest is taking on another luxury project that consists of a 67-story hybrid apartment tower that will boast 100 condominiums and 250 apartments. For this building, rent will likely reach upwards to $15,000 per month.