Amenities come and go. In some places like New York and Miami though they can make or break a condo’s marketability, but in Chicago at least, it’s still a matter of the three cardinal rules of real estate, “location, location, location,” according to Gail Lissner, a vice president of Appraisal Research Counselors in Chicago. Buyers of new condominium units as well as existing residents look toward “location and view as their top amenities followed by in-unit amenities, especially ceiling height, unit condition and then common area amenities.”
Chicago boasts approximately 120,000 housing units in its urban core. Approximately 80,000 of these units are condos including approximately 1,000 co-op units located predominantly in older prewar buildings. The balance of these 120,000 units, approximately 40,000 units, are rentals. Interestingly enough the “amenities war,” as Lissner terms it, is much more prevalent in the rental market than in the ownership market.
According to Chicagobusiness.com, there have been approximately 4,700 new rental units built in 2014-2015 as compared to 381 condo and townhome units for the same period. The market was overwhelmed by approximately 6,000 units backlogged from the boom years before the recession. That margin reduced to approximately 380 by mid-2014. On the bright side developers have announced approximately 1,700 for-sale units to be built this year.
Outdoor Space Most Sought After Amenity
With that said what amenity package are residents seeking? According to Lissner, the packages differ from rental to condo buildings. Luxury rental buildings, which tend to see a younger resident also tend to have smaller units, mostly one bedrooms and studios. These residents, who tend to be single and childless, seek amenities that make the building more of a community, like state-of-the-art gyms with yoga spaces and private training rooms, community club or party rooms and in- building convenience commercial spaces such as food markets and dry cleaners.
In condo buildings, on the other hand, the most sought after amenity is outdoor space. While most condo buildings have fitness centers-if they don’t they generally look to carve out some space for one-pools are high on the list for both residents and buyers. Often the outdoor space, which may include a pool, sits atop the building’s parking facility or on its roof.
It’s Easy Being Green
Interestingly, Chicago, in fact, is one of the leading cities in encouraging green roofs and, it is number one in the country in Leadership in Energy & Environmental Design (LEED) buildings and space, according to a recent U.S. Green Building Council survey. Chicago’s green roof initiative started way back with former Mayor Richard Daley and today the Windy City boasts more green roofs than any other municipality in the country. The roof on city hall that was installed in 2001 actually reduces the surface temperature on the roof by 70 degrees and the air temperature by an average of 15 degrees. Certainly the energy savings generated by a green roof would be welcomed by any condo board.
What Do You Want?
Jim Kinney, vice president of luxury home sales at Baird & Warner, a Chicago brokerage company, concurs as to what buyers and residents are seeking in condo amenity packages. “Outdoor space, an exercise facility and a party room are the three main things most people are looking for,” he says. “Lack of high end amenities such as wine cellars and media rooms,” common in other markets such as New York and Miami, “don’t stop buyers from purchasing.”
“Buyers are seeking a base level of amenities,” says Kinney. “All buildings are upgrading. If there’s no exercise room they are putting one in, especially in mid-century and vintage buildings.” Surprisingly though, he continued, “in many cases they have put them in for marketing purposes but residents still don’t use them.” Yet they are an important marketing tool.
Setting Themselves Apart
In an effort to remain up-to-date if not necessarily a function of competitiveness within the market, some older buildings have dabbled in what might be considered more exotic amenities. The Montgomery, 500 West Superior Street, built in 1972, installed a roof deck and a dog run. Lake Point Tower, completed in 1968, located at 505 North Lake Shore Drive has a raised private 2.5-acre park and a food market. And, 3750 North Lake Shore Drive, built in 1926, recently redecorated its hallways and put in a roof deck.
What seems to be more in the mind of long-term owner/investors is the condition of the building. “Most buildings do periodic common area renovations.” For example, 1000 North Lake Shore Drive is currently redoing its lobby and 1120 North Lake Shore Drive is doing its façade. “While it’s not for marketing purposes,” Kinney said, “these buildings are very serious about regular maintenance.” Maintenance, per se, is an important issue for both condo residents and buyers in the Chicago market.
Like most major cities, Chicago has a landmarks commission—the Commission on Chicago Landmarks—that designates buildings of significant historic or architectural value. Some of these like 860-880 North Lake Shore Drive have landmark status. In some cities like New York, for instance, landmark status can affect everything from exterior repairs to lobby renovations.
In Chicago, only front facades and side facades on corner buildings are affected. These regulations can have an effect on certain planned amenity additions if they involve the exterior of the building such as the addition of outdoor park space or potentially even a roof deck. The rules governing designated landmarks are summarized by the Commission on Chicago Landmarks online as follows:
When a property is proposed for Chicago landmark status, and after its designation, all building permit applications are evaluated to determine whether the work will affect what are called “significant historical and architectural features” of the proposed landmark; work on these features must be approved by the Commission on Chicago Landmarks. For all proposed designations, those significant features are defined at the beginning of the designation process and codified in the designation ordinance adopted by the City Council. For most landmark districts, the significant features typically are the exterior building elevations visible from the public right-of-way except regarding work involving demolition.
One interesting incident involving landmark status occurred at 310 South Michigan Avenue, formerly the home of Encyclopedia Britannica. According to Andy Warner, a senior property supervisor with Community Specialists, a well-known property management firm in Chicago, “when the building was converted to condominiums around ten years ago the Chicago Landmark Commission did require the developers to preserve the lobby as part of the development plan. In many historic and landmark properties, though, it is more often than not the residents, who are sticklers for detail and preservation.”
While condo and co-op markets may have much in common on a general basis they differ substantially from locale to locale in terms of what buyers and residents are looking for. As the current saying goes, “think global, act local.”
In Chicago’s case, the eye popping amenities so often found in luxury buildings in Miami, New York and Los Angeles are not the game changers they might be in these other markets. Chicago condominium owners are looking for ‘quality of life’ add-ons; well-equipped fitness centers, great views, comfortable interiors and most importantly outdoor space. In a city like Chicago what could be better?
A.J. Sidransky is a novelist and a staff writer for The Chicagoland Cooperator and other publications.