Million-dollar condos on old Skid Row
No sooner did one West Loop developer sell out dozens of condos at $1 million-plus than another announced a plan to build two dozen more.
CRAIN'S CHICAGO BUSINESS
March 11, 2019
This is the West Loop in 2019: Less than a week after the last of one development's two dozen $1 million-and-up condos went under contract to a buyer, another developer unveiled plans for another batch of two dozen, all priced over $1 million.
Last week the last of 28 units at Hayden West Loop, which is under construction on Washington Street, went under contract, according to Heather Gustafson, managing director of Compass Development, which has represented the developer, a venture led by Sulo Development Group. The condos were all priced between $1.58 million and $4 million, but the prices they sold for won't be known until buyers close their purchases after construction is complete.
Then on Monday, Zev Salomon, principal of ZSD, rolled out his proposal to build a six-story condo building on the site of a surface parking lot that extends to Peoria and Green streets. Salomon, who presented the plan at an evening meeting of Neighbors of West Loop's development committee, plans 25 condos, priced from about $1.2 million to $3 million.
Part of the rationale behind prices at the ZSD project is their size, about 2,000 square feet and all at least four bedrooms, Salomon said. But at the same time, "over $1 million is what people are buying" in the West Loop, he said.
In the neighborhood once known as Skid Row, million-dollar homes now sell well.
In the past 12 months, 104 buyers have paid $1 million or more for homes in the West Loop west of the Kennedy Expressway, according to Crain's research in Midwest Real Estate Data's records. That's up from 64 in the previous 12 months, which in turn was up from 34 in the 12 months before that. The majority, but not all, of the sales are new or recent construction, and much of the increase has to do with delivery times, as developers finish projects that were launched in the mid-2010s.
The tally of 104 sales in the last 12 months doesn't include Hayden West Loop's 28 units, which have not yet delivered. They're scheduled to close later this year.
"The West Loop has become the hip, cool, trendy place that everyone wants to be," said Patrick Lynch, an Exp Realty agent who's been based in the neighborhood for 17 years.
Lynch ticks off a list of attributes that contribute to the neighborhood's appeal: Big employers like Google and McDonald's, a dynamic restaurant scene, commutes into the Loop are walking distance and public transportation and expressways are close by, CPS's Skinner West School on Adams Street scores a ten on Great Schools' 10-point scale and green space is ample at Mary Bartelme, Union and Skinner parks.
"There's everything the millennials want," Lynch said. "Other people want those things as well."
Another project that has been succeeding in the $1 million-plus market is the West Loop Collection on Green Street near Jackson Boulevard. Of the 40 units planned in a total of five buildings, half will be priced over $1 million and half just under, at $950,000 or more, according to Mike Battista and Maria Casciaro, the Dream Town Realty agents representing the project. Two buildings are up, with 15 of their 16 units sold, Battista said. Eight of them went for $1 million or more, Casciaro said. Groundbreaking on the third building is imminent, they said.
Lynch and Salomon both said the West Loop's many strong points make it a place where residents want to remain as their families and incomes grow, rather than upsizing into tonier neighborhood or the suburbs. "They put down roots, and when it's time to move up they want to do it within the neighborhood," Salomon said. That's one of the reasons his proposal includes only condos with four bedrooms or more.
At least nine new-construction units in the West Loop have sold for $2 million or more since early 2018. They're at Illume, completed last year on Peoria immediately north of ZSD's site, and in a townhouse development at 20 N. Loomis.
Not all of the people drawn to the West Loop are spending upward of $1 million. In the past 12 months, 300 condos in the West Loop sold for between $500,000 and $1 million, according to MRED, roughly the same number as sold in the previous 12 months.
Developers are rolling out new product for that segment of the market as well. In late February, developers announced a plan to build Eveq, a 32-unit building on Bishop Street with prices starting at $795,000. In early March, JK Equities unveiled a proposal to build a 42-unit project on Monroe Street where prices will start at $600,000.
Both of these are in the western reaches of the West Loop, near Ashland Avenue, where there's less heat from the restaurant scene but still within a few blocks of Skinner school and park, Whitney Young High School.