Market Conditions: As Prices Soar, is the West Loop in Another Bubble?
We’ve chattered about the incredible asking prices on some condos in the red hot West Loop this year.
Now, Crain’s is reporting that a new construction penthouse condo listed at $5.6 million has gone under contract in 900 W. Washington.
It would be the most expensive condo ever sold in the neighborhood. By far.
The record purchase price for a West Loop condo is set to more than quadruple, with a buyer agreeing to pay more than $5 million for a not-yet-built penthouse on Washington Street.
The asking price is about $5.6 million for the home, which is under contract. The listing agents declined to provide any details on the buyer, whom they referred to only as “he.”
“We’re getting a younger generation, the tech crowd, in the West Loop,” said Shannon Kelly, one of two Jameson Sotheby’s International Realty agents representing the building, 900 W. Washington. Kelly and Melanie Giglio, the other listing agent, declined to say whether the buyer is part of that tech crowd. But he is paying close to the list price, Giglio said.
Of the 22 units planned for the building, five are under contract, including the penthouse, Giglio said.
Construction is scheduled to start next month, with the building ready for occupancy by summer 2018.
This year, the most expensive condo sale in the West Loop was a $1.2 million sale in the loft building at 1000 W. Washington. That condo was 2400 square feet.
That’s just $500 per square foot.
“It seems like they’re reaching for the sky,” said Colagiovanni, who’s been selling property in the West Loop since the late 1990s and lived there until a few years ago. “The West Loop isn’t Silicon Valley.”
The penthouse prices at 900 W. Washington are over $1,100 a square foot. Existing condos in the West Loop are selling in the range of $475 to $525 a square foot, up from $350 to $375 about two years ago, Colagiovanni said. For new construction at the Hayden West Loop, asking prices are below $800 a foot.
“That’s a big difference” from what the 900 W. Washington units are asking, Colagiovanni said.
The argument I keep hearing for rising West Loop and Fulton Market prices are that all those jobs, including McDonald’s, are coming there.
But prices didn’t skyrocket in the Loop when Boeing moved 500 top executives from Seattle to Chicago nor near the offices of Grubhub, after they went public.
This argument assumes that every McDonald’s employee will move from their suburban homes AND will want to live within a mile of their offices.
But if it’s not McDonald’s, what is causing the soaring prices in the West Loop?
Is it the neighborhood of choice for Millennials now? And aren’t they all renting anyway?
Who’s buying all the condos?
Someone just put a West Loop condo under contract at over $5 million [Crain’s Chicago Business, by Dennis Rodkin, May 5, 2017]
Who’s funding the construction loan with (approx) 20% “sold”?
Also looking at the developers website leaves me shaking my head. Guessing that if/once this gets built, the penthouse comes back on the market w/in a year
To the person who paid $1100 a sqft to live in the west loop…
you are a retard!
“To the person who paid $1100 a sqft to live in the west loop…”
But it’s going to have *really* nice finishes…
Insanity. $1100 a square foot anywhere in Chicago is crazy, but in the west loop? Come on.
Selfishly, I hope they get it. In University Village, we are seeing people priced out of the west loop moving in. I welcome these newcomers.
I laughed out loud at this today…
This has to be a rich transplant from nyc, right? Nobody actually from Chicago would pay this, athletes and trust fund kids included.
“This has to be a rich transplant from nyc, right? Nobody actually from Chicago would pay this, athletes and trust fund kids included.”
or a rich transplant from SF bay area (think a Google exec).
We’ve opined how Chicago is under valued compared to other major cities. I wonder if the continued influx of transplants from higher cost of living cities is going to push prices up. Even our over priced stuff still seems like a bargain compared NYC, SF, Boston, LA, etc.
I remember hearing that after the early 2000s tech bubble, the single most common item the repo-man found in repo-ed cars was lottery tickets. For some people, raging success early in life imbues a kind of game mentality – – like it could easily happen again by buying a lottery ticket.
Anyhow, easy come, easy go. That is why someONE would pay this price, but perhaps it isn’t a someONE. Perhaps it is going to be owned by a tech company? Someplace to impress clients / woo talent? There has to be more to an $1100 PSF buyer. People who actually have this kind of money are not typically complete fools….there is more to this story.
Why would a company overpay so much for a property when if it was a large company they could easily develop their own property for far less cost and even turn a profit
I’ll go there: MONEY LAUNDERING
😉
I’ve never understood the strong appeal for the West Loop in the late 90s/early ’00s.
And now with the exploding values in Fulton Market, it makes even less sense to me. Yeah, I get that Google and McDonald’s HQ will anchor this hood. But what then?
No lake access and public transit access is not amazing.
AC, it is close/convenient to the loop and if you wanted loft living, it was one of the only neighborhoods with decent lofts back then. I think that is what attracted early residents to the area. Not everyone cares about easy Lake access (hence Bucktown).
Personally, I find the area dead boring as there is very little foot traffic so it lacks the neighborhood feel you get in other areas. Of course, this could change.
Different strokes for different folks.
heh you should see the neighborhood now it has completely changed just in the last year
I’ve always seen the west loop as a working professional’s kind of neighborhood. not unsurprisingly, I’ve known a good number of recent divorcees, particularly men, who ended up moving to the west loop for easy access to the highway and easy access to downtown. I take the Madison bus from the train station and there’s a lot of younger professional women and couples coming from that direction too. These people are working long hours and making a lot of money. They’re not really interested in shops, family friendly venues or the bar scene. They get a reasonably sized place, with parking, close to downtown and walking distance from any # of restaurants and bars off Randolph. No tourists either. That’s the appeal. I totally get it.
Sonies was right that it has changed a lot in the last year. But Russ summed it up perfectly with the different strokes comment.
We found it to be an amazing neighborhood in the early 2000’s. It did not have all the amenities of my former hood Bucktown, was not as crowded or trendy as LP, but it had many benefits. We liked it’s charm, a bit of grit, the ease of parking, and tremendous access to the city. There were seldom break ins or bums looking for handouts. And the five or six times per year that we wanted to get to the lake we believed it to be very reasonable access.
And BTW just because someone suggests that the unit is “under contract” at 5MM means nothing. Call me if/when it closes at that price point.
Likely the developer blowing smoke hoping to get a legit buyer for the other unit.
“No tourists either. That’s the appeal. I totally get it.”
That has likely changed and will continue to change.
Once Soho House opened, that opened the floodgates. Several other hotels have announced plans to go into Fulton Market, including one co-owned by Robert DeNiro. It’s going to be a BIG tourist draw (if it’s not already.)
If you’re over on Madison heading towards the United Center, you might not see as many, however.
“or a rich transplant from SF bay area (think a Google exec).”
Why would a Google exec be here? (unless he/she left the company) The head honchos aren’t here in Chicago. From what I understand, it’s mostly sales guys in the Chicago office.
We have plenty of companies actually headquartered here where there are highly paid CEOs, including Grubhub, CME, Boeing, Groupon and others. The CME guys are WAY richer than anyone even realizes, especially since their very successful IPO.
Why does everyone think that only the Google people are rich?
Don’t see a CME exec picking the west loop for a $5MM abode.
It makes sense that someone from out of town would be willing to pay the ask to live here Vs a local
The type of people who stay at the Soho House are the type of tourists I tend to like, not the annoying, slow walking, American-girl carrying type.
Sabrina
You are correct. There are plenty of very wealthy people that live in Chicago. But at 5M+ you are truly appealing to a small slice of buyers. They are already extremely wealthy and often quite picky. Many likely have a large ego that needs to be fed with views or high tech finishes. But most want to believe that the property they purchase is truly something unique, special, rare, or exclusive.
Unfortunately for the developer it appears on the surface that said property and unit is not that rare or exclusive. And in my opinion not worthy of a $5MM+ price point. No doorman building in an ok stretch of the west loop with a decent but not exclusive or totally protected view.
It will stand out to a Google exec, CME trader that made money on the IPO, or a person being transferred in from another higher cost city. But it might not be perceived as a value at that price point.
For that money the ego buyer who likes views might prefer a penthouse with awesome views.
https://www.redfin.com/IL/Chicago/60-E-Monroe-St-60603/unit-7201/home/45475172
https://www.redfin.com/IL/Chicago/225-N-Columbus-Dr-60601/unit-8004/home/40380530
The buyer that still insists on the West Loop vibe could save some major cash and buy one of these giant hip west loop pads.
https://www.redfin.com/IL/Chicago/1217-W-Monroe-St-60607/unit-2/home/77481007
https://www.redfin.com/IL/Chicago/111-S-Peoria-St-60607/unit-02/home/107605616
And the cool part is that they would still have enough pocket change to purchase an awesome house on Lake Geneva, make it more hip, and impress their friends with an annual 4th of July party.
https://www.redfin.com/WI/Lake-Geneva/1420-W-Main-St-53147/home/57673465
Now that is a better way to spend 5MM.