CHICAGO | General Discussions

[rivernorthlurker]

Originally Posted by marothisu

Why would it not exist here? People need to stop acting as if Chicago is magically devoid of money now. This place is about equal to a monthly payment on an $8M or so property. I know it's hard to believe but there's actually a fair number (relatively) of people in the region who could afford this.

Because in 2020 Chicago's most expensive residential sale was on par with this at $8.4 million in Park Tower. https://www.chicagotribune.com/real-...f5q-story.html

In 2019 the top 2 condo sales were both in No. Walton at $8.2 and $11.2 million. https://www.chicagonow.com/getting-r...sales-of-2019/

Meanshile NYC has several in the $60m range with the top being $167 million, so like a 6-7x multiple on Chicago's top range. https://therealdeal.com/2021/12/21/i...s-led-the-way/

So if this were to be listed/sold converting the rental price to $8 million then it's in the ultra top tier in Chicago, in a much 'lower tier' building so I am a little surprised that it would compete with other higher end buildings at a similar price. Though I suppose those are sales so maybe there is a niche for people who what to rent in that tier without committing to a $10 million pad. I mean its a good thing for us SSP heads that shows the strength of the market - but that's why I was suprised.

[marothisu]

Originally Posted by rivernorthlurker

Because in 2020 Chicago's most expensive residential sale was on par with this at $8.4 million in Park Tower. https://www.chicagotribune.com/real-...f5q-story.html

In 2019 the top 2 condo sales were both in No. Walton at $8.2 and $11.2 million. https://www.chicagonow.com/getting-r...sales-of-2019/

Meanshile NYC has several in the $60m range with the top being $167 million, so like a 6-7x multiple on Chicago's top range. https://therealdeal.com/2021/12/21/i...s-led-the-way/

So if this were to be listed/sold converting the rental price to $8 million then it's in the ultra top tier in Chicago, in a much 'lower tier' building so I am a little surprised that it would compete with other higher end buildings at a similar price. Though I suppose those are sales so maybe there is a niche for people who what to rent in that tier without committing to a $10 million pad. I mean its a good thing for us SSP heads that shows the strength of the market - but that's why I was suprised.

2020? We are in 2022 dude. There were over 100 sales of over $4M in the area in 2021 and there were a large handful above $8M. Comparing to NYC is completely pointless in this - and as someone who just moved back from NYC not long ago I'll tell you this 100%. We just went under contract on a condo that's ~$1M in Chicago and looking at comparables in Manhattan would put the same unit at somewhere between $5M and $7.5M there. In gentrified Brooklyn, we're talking about $3M+. Completely pointless to compare the 2 places for numerous reasons.

If you want to actually look at reasons why, you look at how much money it would cost to actually rent a place like this first and then you look at the money situation in Chicago and the area. Some banks will go up to somewhere around 43% DTI if we were talking about a condo costing this much per month. Meaning if you are paying for this and then have debts of $17K on top of that per month, minimum income per year they'll accept is $1.7M/yr. If you had only $3K/mo debt then some banks would probably approve you on a $1.35M yearly income most likely. Sounds like a lot but you have households of top lawyers and MANY business people from Fortune 500 companies to private ones you and I have never heard of. Some doctors as well.

Do you know who bought a $8.2M condo at St. Regis recently? A doctor from Hinsdale we've probably never heard of. A $7.1M condo in St. Regis? A board member of GreatAmerica Financial. A $6.3M condo in St. Regis? The former CEO of Evans Food Group. That company is centered not downtown but in Back of the Yards in an industrial area and yet the former CEO lives in a $6M+ condo in Vista. One of my friends is friends with the former owners of one of Hinsdale's most expensive properties (I think around $10M) and trust me - you've never heard of them and would probably never expect even looking them up they have that much money.

I don't know why people forget these facts:
1) Chicago area has a GDP of $715B in 2021 (by one measure - waiting for BEA to come out with the data though). Not PPP adjusted, that is the 7th highest GDP of any metro area in the entire world. That is higher than Shanghai, Beijing, Moscow, Toronto, Taipei, Singapore, Hong Kong, Mumbai, Delhi, Sao Paolo, Mexico City, Istanbul, etc.

Let's take that a step further. The Chicago MSA's GDP is more than the entire country of Poland's GDP. It's more than Sweden's, Thailand's, Ireland's, Malaysia's, etc. In fact, it's not that far behind the entire country of Turkey's.

2) Chicago area has the 2nd most number of Fortune 500 HQ in the entire US. Only NYC has more.

3) Chicago area has the 2nd most number of the largest financial companies in the entire US. Only NYC has more.

4) The CBOE, which I believe is technically the most active financial market in the US by volume, is in Chicago. There are employees of companies like Jump, Citadel, etc living in $5M+ mansions in Lincoln Park we've never heard of.


People need to stop selling the region short. There's more than enough people that can afford that penthouse believe it or not.

[tjp]

^^


Also - some retail leasing developments on State Street. Five Below is opening in the spot that Blick vacated, and JD Sports (British parent of Finish Line) is going into the old Forever 21.

https://www.chicagobusiness.com/comm...s-state-street

[rivernorthlurker]

Originally Posted by marothisu

2020? We are in 2022 dude. There were over 100 sales of over $4M in the area in 2021 and there were a large handful above $8M.

Appreciate the all the figures/research in the response. I agree that there are some super wealthy discreet people living in Chicago that you wouldn't know. I saw the pad of some spine surgeon awhile ago and it was pretty wild.

My initial comment was more to the point that this exists in 369 W Grand which is not a top end building and so was surprised. It's a strange juxtaposition for me. As you mentioned there were only a 'large handful' sold in 2021 (less than 5?) in this price range so to have one of the top 5 (or 10 or 20) rentals in all of Chicago - a city of 3 million and metro of 10 million to exist in 369 W Grand is a bit weird to me. Sure it exists here but it's in the outer limits. But I guess I won't be surprised anymore.

The point about New York was just to highlight that fact that Chicago's high end is so much lower than New York (and 'other' places), hence the surprise. I guess New York is so high high high end that even Chicago's top sales which are like 15% of NYC's prices still reach this echelon.

Also interesting you moved back to Chicago (maybe time to change profile location?). Curious if you're willing to briefly share reasons without getting too off topic.

[thegoatman]

Originally Posted by marothisu

2020? We are in 2022 dude. There were over 100 sales of over $4M in the area in 2021 and there were a large handful above $8M. Comparing to NYC is completely pointless in this - and as someone who just moved back from NYC not long ago I'll tell you this 100%. We just went under contract on a condo that's ~$1M in Chicago and looking at comparables in Manhattan would put the same unit at somewhere between $5M and $7.5M there. In gentrified Brooklyn, we're talking about $3M+. Completely pointless to compare the 2 places for numerous reasons.

If you want to actually look at reasons why, you look at how much money it would cost to actually rent a place like this first and then you look at the money situation in Chicago and the area. Some banks will go up to somewhere around 43% DTI if we were talking about a condo costing this much per month. Meaning if you are paying for this and then have debts of $17K on top of that per month, minimum income per year they'll accept is $1.7M/yr. If you had only $3K/mo debt then some banks would probably approve you on a $1.35M yearly income most likely. Sounds like a lot but you have households of top lawyers and MANY business people from Fortune 500 companies to private ones you and I have never heard of. Some doctors as well.

Do you know who bought a $8.2M condo at St. Regis recently? A doctor from Hinsdale we've probably never heard of. A $7.1M condo in St. Regis? A board member of GreatAmerica Financial. A $6.3M condo in St. Regis? The former CEO of Evans Food Group. That company is centered not downtown but in Back of the Yards in an industrial area and yet the former CEO lives in a $6M+ condo in Vista. One of my friends is friends with the former owners of one of Hinsdale's most expensive properties (I think around $10M) and trust me - you've never heard of them and would probably never expect even looking them up they have that much money.

I don't know why people forget these facts:
1) Chicago area has a GDP of $715B in 2021 (by one measure - waiting for BEA to come out with the data though). Not PPP adjusted, that is the 7th highest GDP of any metro area in the entire world. That is higher than Shanghai, Beijing, Moscow, Toronto, Taipei, Singapore, Hong Kong, Mumbai, Delhi, Sao Paolo, Mexico City, Istanbul, etc.

Let's take that a step further. The Chicago MSA's GDP is more than the entire country of Poland's GDP. It's more than Sweden's, Thailand's, Ireland's, Malaysia's, etc. In fact, it's not that far behind the entire country of Turkey's.

2) Chicago area has the 2nd most number of Fortune 500 HQ in the entire US. Only NYC has more.

3) Chicago area has the 2nd most number of the largest financial companies in the entire US. Only NYC has more.

4) The CBOE, which I believe is technically the most active financial market in the US by volume, is in Chicago. There are employees of companies like Jump, Citadel, etc living in $5M+ mansions in Lincoln Park we've never heard of.


People need to stop selling the region short. There's more than enough people that can afford that penthouse believe it or not.

Agree heavily with all this. People really think Chicago is some rust belt blue collar city on par with Detroit, Pittsburgh, or Baltimore (nothing wrong with those cities, but you get my point). Chicagoland is an economic giant. The state of Illinois is going to approach $1 trillion in GDP next year, becoming #5 in the trillion club after NY, Cali, Texas, and Florida. It's currently at $957 billion (2021), when it was $884 billion in 2020. So it's pretty much a guarantee Illinois will become a trillion dollar state in 2022, which like 95% of that being Chicagoland lol.

But yeah, 7th richest city in the world. Chicago being wealthier than Moscow or Hong Kong is crazy. And they're tons of headquarters here. I didn't even realize Walgreens was headquartered here.

[rivernorthlurker]

Originally Posted by thegoatman

Agree heavily with all this. People really think Chicago is some rust belt blue collar city on par with Detroit, Pittsburgh, or Baltimore (nothing wrong with those cities, but you get my point). Chicagoland is an economic giant. The state of Illinois is going to approach $1 trillion in GDP next year, becoming #5 in the trillion club after NY, Cali, Texas, and Florida. It's currently at $957 billion (2021), when it was $884 billion in 2020. So it's pretty much a guarantee Illinois will become a trillion dollar state in 2022, which like 95% of that being Chicagoland lol.

But yeah, 7th richest city in the world. Chicago being wealthier than Moscow or Hong Kong is crazy. And they're tons of headquarters here. I didn't even realize Walgreens was headquartered here.

Have been waiting for a good place to make this comparison with Hong Kong. Chicago has quietly become 'taller' than Hong Kong in the last few years which I think would shock many people.

For comparison Chicago's 25th tallest is 732 ft while Hong Kong's is 719 ft. This still holds pretty well at 50th with Hong Kong at 646 ft and Chicago at 626. Hong Kong of course dominates for 500ft and less.

But given all the stuff that's happening with HK/Taiwan/China, the HK boom seems over and there isn't really anything massive in the pipeline there and Chicago will continue to take the lead.

I think this also speaks to the fact of Chicago's quiet downtown 'explosion' in the last 15 years that was mentioned that regular people don't really intuit - yet. But at some point it will be unavoidable.

I think the airport expansion plus the next 5 years of development really gives Chicago the ability breakout in the 2020s as more of an 'it' city nation and worldwide, and maybe finally some actual robust population increase at which the skyscraper machine will really go into overdrive.

[chicubs111]

^ I still feel Chicago has underperformed with regards to quality architecture and height overall. Yes we do have some highlights but we had so many downsizing and canceled projects that didn't live up to expectations. I know many hate comparing to NYC but it really is a good benchmark because Chicago used to pretty much do half or a third of what NYC was doing relative to buildings over 500ft. I feel like the city needs to have an architectural renaissance because the idea that high-end groundbreaking architecture the city was known for in the early 20th century really no longer resonates. I understand the big corporations are all about efficient building costs and residential developers are all about bottom line obviously but seems like just so many designs are overall so safe and redundant without any outside the box thinking. I mean how many version of a blue glass box can we have. I find it hard to believe that NYC is pretty much only city in the country that can have such variation and use quality materials and we cant make the economics works in any possibly way.

[rivernorthlurker]

Originally Posted by chicubs111

^ I still feel Chicago has underperformed with regards to quality architecture and height overall. Yes we do have some highlights but we had so many downsizing and canceled projects that didn't live up to expectations. I know many hate comparing to NYC but it really is a good benchmark because Chicago used to pretty much do half or a third of what NYC was doing relative to buildings over 500ft. I feel like the city needs to have an architectural renaissance because the idea that high-end groundbreaking architecture the city was known for in the early 20th century really no longer resonates. I understand the big corporations are all about efficient building costs and residential developers are all about bottom line obviously but seems like just so many designs are overall so safe and redundant without any outside the box thinking. I mean how many version of a blue glass box can we have. I find it hard to believe that NYC is pretty much only city in the country that can have such variation and use quality materials and we cant make the economics works in any possibly way.

IMO I think Chicago's real contemporary in the US is now Miami - whose boom is almost entirely residential. Miami's new residential towers are without a doubt more architecturally innovative than Chicago. I'm not sure what the 'difference' is since Miami's price point is pretty similar to Chicago's. I do think it sometimes just comes down to ambition/attitude/culture. Or maybe it's just the aldermen.

[chicubs111]

Originally Posted by rivernorthlurker

IMO I think Chicago's real contemporary in the US is now Miami - whose boom is almost entirely residential. Miami's new residential towers are without a doubt more architecturally innovative than Chicago. I'm not sure what the 'difference' is since Miami's price point is pretty similar to Chicago's. I do think it sometimes just comes down to ambition/attitude/culture. Or maybe it's just the aldermen.

Absolutely agree about the "ambition/attitude/culture" ... and also your correct if the alderman\mayor created this type of standard\ambition it would spark a bit more innovation than we have been getting for sure.

[thegoatman]

Originally Posted by chicubs111

^ I still feel Chicago has underperformed with regards to quality architecture and height overall. Yes we do have some highlights but we had so many downsizing and canceled projects that didn't live up to expectations. I know many hate comparing to NYC but it really is a good benchmark because Chicago used to pretty much do half or a third of what NYC was doing relative to buildings over 500ft. I feel like the city needs to have an architectural renaissance because the idea that high-end groundbreaking architecture the city was known for in the early 20th century really no longer resonates. I understand the big corporations are all about efficient building costs and residential developers are all about bottom line obviously but seems like just so many designs are overall so safe and redundant without any outside the box thinking. I mean how many version of a blue glass box can we have. I find it hard to believe that NYC is pretty much only city in the country that can have such variation and use quality materials and we cant make the economics works in any possibly way.

100% agree. New York is our only peer skyline wise so the comparisons make sense. We were actually keeping up with New York in the 2000s. Then the 2010s decade came in and New York just exploded with construction and left us in the dust. I check Newyorkyimby.com and that city is just insane. We think the construction in the West Loop is impressive, the city has been building like that times 3 all over the city.

The 6 tallest buildings in New York were all built in the past decade. Meanwhile we're still languishing off the clout from the Sears Tower that was built in the 70s...

But it isn't all doom and gloom. New York and Chicago are totally different cities and really aren't that comparable outside of skyscrapers. For a city that was losing population for decades, we got some nice projects through the pipeline. One Chicago is great, lots of nice infill projects all over the city. Really just dissapointed with all the downsizing of the projects.

Tribune East should become the tallest building in the city, it's about time Chicago has a new tallest. Those twin towers proposed on Lake Shore Drive should be a supertall.

I don't know about comparing us to Miami tho. Miami is booming and might surpass us for having the most high rises, but its skyline is pretty boring. All the buildings look the same. Much prefer the brick infill of Chicago.

[west-town-brad]

a data source in support of the wealth in Chicago discussion... you can look at IRS data by zip code to see what people are making annually. the 60614 zip code that covers Lincoln Park and some other adjacent areas regularly has over 1,000 households reporting $1 Million or more in annual income

in NYC there would be way more zip codes like that given the economics of the city and overall cost of living, plus NYC is a magnet for much more international cash that Chicago which helps support those crazy pricey condo buildings

[marothisu]

Originally Posted by west-town-brad

a data source in support of the wealth in Chicago discussion... you can look at IRS data by zip code to see what people are making annually. the 60614 zip code that covers Lincoln Park and some other adjacent areas regularly has over 1,000 households reporting $1 Million or more in annual income

in NYC there would be way more zip codes like that given the economics of the city and overall cost of living, plus NYC is a magnet for much more international cash that Chicago which helps support those crazy pricey condo buildings

Comparing to other cities at the end of the day is pointless. People either have the money or they don't. It doesn't matter what other cities have.

Where do you see $1M+ in the IRS data? I only see $200K+

[the urban politician]

Originally Posted by west-town-brad

a data source in support of the wealth in Chicago discussion... you can look at IRS data by zip code to see what people are making annually. the 60614 zip code that covers Lincoln Park and some other adjacent areas regularly has over 1,000 households reporting $1 Million or more in annual income

in NYC there would be way more zip codes like that given the economics of the city and overall cost of living, plus NYC is a magnet for much more international cash that Chicago which helps support those crazy pricey condo buildings

Exactly.

Problem is, this has always been the case--yet Chicago was still keeping up with NYC in building bold skyscrapers up until 10-ish years ago.

Chicago has lost its height mojo, but I think it is made up for by the fact that SO MUCH infill is happening, particularly with underutilized sites in and around downtown. Many may not like to hear this, but we need to fill in the gaps before we can really start building upward to a substantial degree.

Manhattan just has no land. It has to go up. Chicago is in a different position in so many ways.