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2005
If you?re going to live downtown, buyers ask,
why not live downtown?
If Rich Schaefer and his wife, Sheila, had any doubts about
moving from their settled Lakeview neighborhood down to a
massive planned development at the river and Lake Shore Drive,
in the heart of downtown, the questions faded after the
couple?s closing. The developer marked that event by throwing
the new condo owners a catered eight-course dinner party with
endless wine, a server, a violinist and other frills. No, this
is not a standard closing gift for Magellan Development Group,
one of the partners behind the 28-acre Lakeshore East
development, which sits west of Lake Shore Drive between
Randolph and Wacker, on the site of a former golf course. But
as the first closing in the first condo building at a
development that eventually will include nearly 5,000 homes,
the occasion demanded a celebration, according to Joel Carlins,
of Magellan. ?We had a tribute, this being the
first closing and a historic event, when you think about it,?
Carlins says. ?When Lakeshore East is done, we?ll have 10,000
to 15,000 people living there.? Carlins has plenty to
celebrate. The 221-unit Lancaster, the new condo building
where the Schaefers closed on their home in December, was
about 95 percent sold at press time, and the Regatta, a newer
condo tower underway at Lakeshore East, was 83 percent sold,
according to Carlins. The dinner that marked the
start of residential growth at Lakeshore East ? billed as a
?village within the city,? with its own park, school, stores
and roads ? marks a larger trend as well. Buyers of new homes,
who have been flocking downtown for more than a decade,
increasingly want to live not just downtown, but in the very
heart of it.
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New developments proliferate
Lakeshore East is not alone.
Other new developments in the Loop and the area just east
of it, a stretch between Roosevelt and the Chicago River that
some are calling the ?New East Side,? include: Metropolitan
Tower, the conversion of the Britannica Center office
building, at 310 S. Michigan, into 245 luxury condominiums
overlooking Grant Park; Metropolis, the 169-unit condo
conversion of a 1913 Holabird & Roche office building at 8 W.
Monroe; the Columbian, a 220-unit new-construction highrise
underway at 1160 S. Michigan; Waterview Tower, a 236-unit
luxury highrise planned for 111 W. Wacker, on the south bank
of the Chicago River; and the Heritage at Millennium Park, a
new 356-unit tower at 130 N. Garland Court, where Mayor
Richard Daley has purchased a unit. Sales at most of these new
central developments have been swift. The Heritage at
Millennium Park, one of the early entries in the current
residential wave, had sold 80 percent of its units by
mid-2003, two years before the first units would be complete.
The Columbian, a newer project, started sales in July and drew
more than 500 potential buyers to its grand opening weekend. The
Columbian, located just south of the Loop, has some of the
most competitive preconstruction pricing in the area, ranging
from the mid-$200s to $1.5 million. At LR Development?s 340 on
the Park, one-bedrooms start in the $320s, two-bedrooms are
priced from the $510s, and penthouses start around $3.3
million. People have been willing to pay a premium to live in
the heart of downtown, and evidence suggests they?re choosing
the area at the expense of other neighborhoods.
Downtown grows market share
The Loop-New East Side had a market share of 23 percent during
the second quarter of 2004 and of 18 percent during the third
quarter, according to housing analyst Appraisal Research
Counselors. By comparison River North, which has been a hotbed
of residential development in recent years, had 18 percent of
the pie during the second quarter and 13 percent during the
third. Areas north of the Chicago River, such as River North,
the Gold Coast, Streeterville and River East, have long been
booming residential locations, with new condominiums, retail
and services drawing a steady stream of homeowners and
renters. And south of Roosevelt, the giant Central Station
community and various in-fill projects have been adding new
townhouses and condos for years. The blocks in
between Roosevelt and the River, however, used to be the
purlieu of offices and institutions. Streets here empty out
after 6 p.m., which is also when many of the shops and
restaurants serving Loop workers close.
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It?s a natural progression
So why is residential development moving into the dead center
of downtown? To some extent, it?s a natural progression.
New-home construction has boomed all around the Loop, and
downtown condominium prices have skyrocketed. Converting aging
Loop office buildings that are growing obsolete as commercial
space into residential use can make a highly profitable exit
for owners. And on the scarce land available for development
downtown, homes are safer than offices in the current market,
with premium condominiums in the best locations selling for
more than $500 per square foot. For buyers,
locations between Roosevelt and the Chicago River enjoy some
of the best lake, park and skyline views in the city, and
unless you work at home, the commute times to Loop offices are
hard to beat. The city?s best cultural institutions ? the Art
Institute, Symphony Center, the museum campus, the Harold
Washington Library and the theater district ? sit within
walking distance.
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Millennium Park a strong factor
Another factor has been surprisingly strong in spurring
residential growth in the area. Millennium Park, the brightest
(and perhaps priciest) gem in Mayor Richard Daley?s civic
crown, is not just an added perk for buyers or a benefit that
could tip the scales, all things being equal. For a number of
people interviewed for this story, Millennium Park has become
a major or even deciding factor in where they buy. ?To me,
Randolph is where everything is moving to,? says Tom Panoplos,
who was one of the first buyers to reserve a unit at 340 on
the Park, a condo tower at 340 E. Randolph by LR Development
that will be a part of Lakeshore East. Panoplos, a 35-year-old
investment manager for Mesirow Financial, currently lives at
the Pearson, a new LR building in Streeterville, a mile north
of the 340 on the Park site. He has barely had
time to hang photos in his current condo, so why buy another
place so soon? The answer has everything to do with location
in general and Millennium Park in particular. ?Right now, I
have a lake view, and I?m on Lake Shore Park, and even with
that small park, you appreciate what it means to have open
space and light in front of you,? Panoplos says. ?I have
friends who live along Randolph, and the view is unparalleled.
The big draw is clearly the park.? Panoplos, who
is single, bought a three-bedroom condo with a southwest view
overlooking the lake, the stunning new Jay Pritzker Pavilion
by Frank Gehry, the green of Millennium Park and in the
distance, Buckingham Fountain.
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The views are breathtaking
Not only are the views breathtaking, they?re forever in many
of these buildings. No one is going to construct a new
highrise in Millennium or Grant parks, blocking views from
Metropolitan Tower or 340 on the Park. Riverfront projects
like Waterview Tower, also have built-in view protection. But
views aside, Panoplos is leaving a downtown neighborhood with
an established residential base to move to a spot known more
for offices than for homes. The land beneath Lakeshore East is
part of the sprawling Illinois Center office complex, and the
blocks to the west are dominated by offices and institutions.
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Residential amenities still needed
Panoplos acknowledges that the Loop and the New East Side
don?t feel especially residential. Convenient shops, services
and amenities ? other than the grand, obvious ones like
Millennium Park, the Chicago Cultural Center and the Art
Institute ? are rare, but, he points out, no rarer than in
Streeterville. ?I?m three blocks east of Michigan Avenue, but
it?s still four blocks for me to get to a Starbucks ? there?s
not a whole lot of commercial east of the Water Tower,?
Panoplos says. ?But you see that Millennium Park
infrastructure as well as the development that I?m in, and
it?s a safe assumption that there will be more retail there to
support it.? And Michigan Avenue will be just far
enough for Panoplos once he moves into his new home. ?I think
I will have more convenience,? Panoplos says. ?I work in the
Loop, so it will be an easier walk there and to the museums
and theaters and parks and things. When I do go to Michigan
Avenue now, it?s almost an inconvenience. There are so many
shoppers, it?s hard to get over to Pearson. I?m looking
forward to selectively coming up to North Michigan Avenue.?
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Walk to work, lakefront
Cathy Bremer, who bought a two-bedroom two-bath condo at
Metropolitan Tower, at 310 S. Michigan, agrees that the Loop
needs more restaurants, shops and services. ?I would say that
the restaurant scene hasn?t quite arrived,? Bremer says. ?The
West Loop, on Randolph, has some great restaurants, and River
North does. There are some around here, but there?s not as
much variety as you would like.? But Bremer, an
attorney whose office is in the West Loop, will have a
five-minute drive or a 30-minute walk to get to work, and
she?ll have immediate access to the lakefront, which is key
for her and her husband, whose hobbies include running and
biking along the lake and attending outdoor festivals in Grant
and Millennium parks. Her husband?s commute will be farther ?
he?s a physician with offices in the southwest suburbs ? but
he doesn?t mind trading that drive for the excitement of
living downtown. The Bremers are ?empty nesters? who raised
their children in suburban Oak Park and decided after the kids
had flown the coop, to test out city living. They bought an
?in-town? unit at 330 S. Michigan for weekends and liked the
lifestyle so much they sold their large single-family home in
Oak Park. Developers say that people like the Bremers,
downscaling from large suburban homes to condos in the city,
where they can take advantage of cultural and social events,
have been driving much of the downtown market. In
the Loop-New East Side area some buildings report that empty
nesters account for more than 50 percent of sales. |
The goal: a 24-hour downtown
At the other end of the spectrum, college students have been
another important component in achieving the Daley
administration?s stated goal of a ?24-hour downtown.? New
downtown dorms and facilities for schools including Columbia,
DePaul, Roosevelt and the Art Institute have boosted
population and added street life. ?The streets do empty out
somewhat after 6, but with the new dorm on Congress and all
those students living here?there are always a lot of students
around,? Bremer says. ?And there are always people on Michigan
Avenue too. Wabash and streets to the west do empty out.? Rich
Schaefer and his wife, Sheila, who were the first buyers to
close at the Lancaster, in Lakeshore East, are happy with
their one-bedroom condo. It has a great view, Schaefer says,
even though it?s only on the fourth floor, because it
overlooks the central park in Lakeshore East. They miss some
of the street life and neighborhood amenities they had when
they lived in Lakeview, but they?re also discovering that
there?s more to downtown than meets the eye.
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?We lived near Southport, and there were a lot of things going
on there; there?s nothing wrong with that neighborhood,? Rich
Schaefer says. ?But we?re still discovering things around the
new place. We just found out there?s a restaurant in the
highrise next to us on the 7th floor. We have discovered the
under-Wacker network, which is a whole other world, and the
pedways. On a day like today when it?s 10 degrees, and no
one?s out, that?s when you start to learn all those lower
Randolph shortcuts into buildings.? Schaefer is a
self-employed computer consultant whose office is at home and
whose clients are downtown, so those shortcuts and quick
commute times have made his life much easier. Rather than
traveling all the way back to Lakeview after a morning
appointment downtown, only to learn later that he must return
to the Loop, he?s usually home in 10 minutes these days.
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Downtown?s hidden gems
A smoother schedule gives him more time to walk B.J., the
family dog, and to explore the hidden gems of downtown
Chicago. There is a shortage of restaurants in the Loop, but
some of the best are simply invisible to those who aren?t in
the know. Everest, located on the 40th floor of the Board of
Trade building, is widely considered one of the finest
restaurants in the city, but you?d never stumble upon its
four-star Alsatian cuisine walking down LaSalle the way you
might in a traditional neighborhood. The original Heaven on
Seven, which has maybe the best Cajun fare in Chicago, is
likewise tucked away on the 7th floor of an office building at
111 N. Wabash. The Alumni Club, at 150 N. Michigan is accessed
by taking an escalator to a lower level in the Smurfit-Stone
Building or through the pedway network that connects downtown
buildings under street level. Other Loop restaurants and bars
are located in hotels ranging from the Palmer House to the
Chicago Hilton and Towers, and they?re not always noticeable
from street level. One advantage to hotel bars and restaurants
is that they keep late hours. Some of the Loop treasures
hidden in office buildings, including Heaven on Seven, still
close when workers leave for the day, though the city is
encouraging downtown businesses to keep later hours. The
lack of grocery stores used to be a major complaint for
downtown residents, especially in the Loop, but a number of
new supermarkets, including Jewel Food Stores at 1224 S.
Wabash and at 550 N. State, have alleviated that problem.
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Amenities will follow population
No doubt, as the downtown population continues to grow, so
will the amenities. At press time, Joel Carlins, of Magellan,
said he was working on final plans for the retail component at
Lakeshore East. A 90,000-square-foot retail center at the
community will have 400 deeded parking spots and if all goes
according to plan, a full-service grocery. Retail or
restaurant uses are planned for the bases of several Lakeshore
East highrises and the developer is discussing another retail
center that would be located near Columbus with a large anchor
store occupying a two-story space of 240,000 square
feet. Other new highrises are adding restaurants or shops at
ground level, and Riverside Park, a 62-acre development at
Roosevelt and Clark, just southwest of the Loop, will include
670,000 square feet of retail space, according to Rezmar
Development Group, the developer. That mixed-use project,
which also includes plans for more than 4,000 residential
units, is slated to begin in 2005. Schaefer, who
still hasn?t completely finished moving into his new condo,
says he already likes living in the Loop, though there is a
bit of a learning curve. ?We were the first ones in,? Schaefer
says, ?so we?re asking all the questions, where?s this and
how?s that work. Right now we get most of our information from
the doormen.? |
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