Local developers are having a love affair with lofts.
In the past year, more than a dozen loft condominium buildings have hit the Chicago market and more appear to be in the pipeline.
While lofts themselves are nothing new, this slew of for-sale product is a change of pace. In the past, the preponderance of loft conversions has been for commercial use; those that were residential have been rental buildings.
Driving the current condo loft market is cheaper space. Prices for old warehouses and industrial buildings, which exceeded $40 per square foot in the late 1980s, now have dropped below $20 per square foot, developers said.
That significantly lowers costs for rehabbers, who can pass savings on to consumers.
“There’s value for buyers and a price where the developer still makes money,” said Tem Horwitz, president of Horwitz Matthews Inc., a developer of loft space since the late 1970s.
Horwitz is involved in Plymouth Court Lofts at 523 S. Plymouth Ct. Formerly known as the Pederson Building, the old printing plant will be converted into 50 residential lofts with occupancy slated for early 1995.
Condo lofts make homeownership more affordable for younger buyers, experts said. Many entry-level products are likely to equal what people pay in rent, observed Tracy Cross, head of his own real estate market research firm in Schaumburg.
At Plymouth Courts Lofts, where units range from 951 to 1,327 square feet, prices run about $110 per square foot-from $105,000 to $165,000.
Likewise, at Filmworks Lofts at 1330 S. Wabash Ave., 88 loft units are being developed to sell at about $107 per square foot. Condo lofts range from 821 to 1,610 square feet with an average unit tagged at $130,000, according to Keith Giles, principal with Wolverine Investments, the project’s developer.
Selling prices for townhouses, which have been a popular housing form in the city since the late ’70s, would run an additional $20 per square foot to eke out profits, developers said.
Not only are loft prices enticing, but the product itself has gained in popularity, observers said. One of the biggest problems with loft living-soundproofing-has been addressed in recent projects, developers agreed.
“Our walls are quieter than a brick wall would be,” said Julian Mickelson, who, with his two brothers, Jon and Jerry, are rehabbing a loft building at 601 N. Oakley Boulevard in the Ukrainian Village neighborhood.
The Bodine Building, 48,000 square feet, is one of the smaller projects around, and is being carved into 20 units. But the Mickelsons are touting a broad range of layouts and price tags. Units start at $130,000 and go as high as $300,000 for a 4,000-square-foot duplex. Further diversity is created by a center atrium courtyard, about 1,200 square feet.
The Bodine Building marks the Mickelsons’ third loft project and their first residential building; the first two renovations were commercial.
Mickelson believes that commercial and retail lofts have paved the way to greater acceptance among home buyers. Initially, consumers associated loft living with artist studios, which were too plain for mainstream tastes.
To win over more conventional buyers, today’s lofts have more polish and more private area within interiors, developers said.
Also, geography is less an obstacle, experts agreed. Living in a loft today doesn’t mean trekking to an isolated and sparse industrial zone. The infill of commercial and industrial neighborhoods with townhouse and single-family homes has opened up doors for loft projects.
“A lot of buildings that wouldn’t have made sense a few years ago, now do,” Giles said.
Such is the case with Filmworks Lofts, one block east of the Dearborn Park II residential development and two blocks west of Central Station, a planned mixed-use project which has become Mayor Daley’s new home.
The first loft condo building in the area, Filmworks Lofts should be able to capitalize on the success of the surrounding new townhouse developments, where more than $100 million in sales has occurred during the past three years, according to Giles.
Filmworks Lofts draws its name from local history. During the 1930s, the neighborhood was known as “Film Row” because Warner Bros., MGM, Universal Studios, Paramount Pictures and Twentieth Century Fox had offices in an area bordered by Roosevelt Road, 14th Street, Wabash and Michigan Avenues, Giles said.
Filmworks Lofts is scheduled for occupancy in early 1995 with a model opening in early May.
Giles is upbeat about his project, touting both form and function: views of the city and the lake are unobstructed because there are no high-rises in the area. The project has 121 parking spaces, both indoor and outdoor. “Some owners will be able to have two spaces, which is rare,” he said.
Developers of the latest wave of residential loft condos are taking heart from the report cards being turned in by their predecessors. At Ontario Street Lofts, for instance, more than 141 of the 173 units have sold since sales began in November, even though first occupancy isn’t until September.
“That’s substantially better than expected … although we expected to do well,” said Bruce Abrahms, head of LR Development Co., which is renovating the massive building at 411-451 W. Ontario St.
Condo lofts are also heating up outside Chicago limits. Developer John Stamos is rehabbing the shuttered Minas Department Store in downtown Hammond, converting the abandoned building into 22 condo lofts and 15 spaces for office and retail. The State Street Lofts will feature an interior atrium so residents can have windows on both sides of their units.
And the appeal of lofts has become far-reaching enough that at least one developer is building a new loft condo to mirror the old. Architect Larry Booth has designed Printers Row Plaza, an Ogden Partners development at 636 S. Dearborn St., that will contain 21 loft-style residences, including Booth’s own penthouse.
How long will the loft boomlet last? Much of it depends on inventory, observers said. Future loft projects might end up in more marginal areas, Cross said.
Abrahms is looking at other loft buildings, but may develop them as rentals if there is too much for-sale product on the market.
The Mickelsons would like to do another condo loft project and plan to “start lining up property in another four months,” said Julian Mickelson.
A former commodities trader, Mickelson is bullish on lofts.
“Trading commodities is just money trading hands … there are winners and losers-usually more losers. But when you’re developing loft buildings, you’re taking a rundown building and making something wonderful. The city, the contractors, the buyers-everybody can be winners.”
