Luxury still sells at Lakeshore East
August 18, 2010 | Mark Thomton | Print Article | Email this Article
As condo sales wane in the Chicago market and developers feel the pinch, the Lakeshore East luxury development is bucking trends by posting strong sales and achieving high rents.
It is not uncommon today to see large banners adorn high rise condo buildings in the River North, West Loop, and Lincoln Park neighborhoods, advertising huge price discounts on unsold units. It is a constant reminder in
Joel Carlins stands in his office at the Aqua building
the city of Chicago that the condo glut still exits and that the housing market is a long way from being healthy.
While many of the city’s developers fret losses and watch their projects fall short of financial projections, a different story is being told at Magellan Development’s 28-acre Lakeshore East.
The ambitious project is not a new entity in the Chicago skyline, but what is interesting is how the luxury development has avoided the sluggish market.
The development’s most recent project, Aqua at Lakeshore East, is a testament to its strong place in the market. The mixed-use development is made up of 473 rental units, 263 condos, and a soon-to-be constructed 315-room hotel. The rental units in Aqua will be 100 percent occupied by the end of August and the condo units are on pace to be sold out within months, says Joel Carlins, co-chief executive officer of Magellan.
Carlins admits that it has taken longer to sell the condo units than originally anticipated, but it has not been dramatic enough to affect the project.
“People are buying less and renting more,” says Carlins. “We have seen that pattern. We’ve had fewer sales than we would like, but we still have sales. We average five-to-seven sales a month. At this rate, we will be sold out in six months.”
Yet while some developments are forced to sell at discounted rates—and still struggle to find buyers—Aqua’s clientele have proven to be recession resistant. Not surprisingly, Aqua attracts high-net worth individuals. A good measure of this is how many of its sales are done with no traditional financing. Many developments have languished as buyers have been unable to obtain bank financing. Aqua does not seem to have this problem.
“Fifty percent of our sales are cash buyers,” says Carlins.
The prices for condo units range from $250,000 to more than $1 million.
Geographically, 60-65 percent of buyers come from the Chicago area, 12 percent from out of state, 2-3 percent from outside of the country, with the remainder made up of downstate purchasers, says Carlins.
The development currently supports seven high rise buildings and two town home developments. Magellan owns 16 development plots around the six-acre botanical park that acts as the centerpiece of the planned community. Carlins says that the next high rise will be similar to Aqua in that it will support rental and condo units. It is now in the design phase.
The firm has recently broken ground on the 105,000-square-foot Village Market Center retail development. The Village Market Center will be anchored by a Roundy’s grocery store and will be completed in 2011.
While Carlins still has plans for future residential development at Lakeshore East, the project has created so much buzz internationally that now the firm is seeking similar opportunities overseas.
The firm has recently participated in a bid for work for a multifamily development in Zhengzhou China. Calrins says that the firm will know in the next three months if it has been selected.
Tags | Chicago, Lakeshore East, Magellan Development Group, Multifamily, sales
© 2012 Real Estate Communications Group. Duplication or reproduction of this article not permitted without authorization from the Real Estate Publishing Group. For information on reprint or electronic pdf of this article contact Mark Menzies at 312-644-4610 or menzies@rejournals.com
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This is GREAT news. I’m so happy that LSE is doing well, as it should. One day, I hope to own a unit in this community. On a larger note, it is without a doubt that the reason Aqua is doing so well is that Magellan took a gamble on great design. Some of the other building in LSE are conservative in their design, acceptable, but overall not awe inspiring. Aqua takes the cake. Magellan should do well to remember that it was a combination of great location and utterly stellar design. Kudos to Studio Gang. Lets hope the next building is just as well designed as Aqua. GOOD ARCHITECTURE SELLS! Also, the Architectonica building (the keyhole building) is another GREAT building, love the design. I really hope that one gets built as well. Cheers to LSE.