“Step out your door and you’re on vacation,” says Tony Orsini.
The vacation mecca he’s talking about isn’t Miami or Palm Springs. It’s downtown Chicago, where an increasing number of people are buying second homes — just for the fun of it.
Though for at least six months of the year the weather may not be an attraction, Chicago is a magnet for suburbanites and out-of-towners who love what it offers to see and do.
In recent years, while Mayor Richard Daley has been sprucing up boulevards with planters, developers have been planting new condo towers with thousands of units. Second-home buyers represent a growing segment of sales, ranging from 15 percent to 45 percent, depending on the building.
Instead of traveling to Wisconsin or Michigan, these second-home buyers are now heading downtown. They usually opt for small units, not much bigger than hotel rooms. One-bedroom units start below $200,000 in some buildings, but most are pricier.
“Many people don’t think of Chicago as a vacation spot, but it has everything, including world-class theater and miles of bike trails along the lake. The suburbs can’t compete. There’s a real absence of five-star dining in the suburbs,” Orisini says.
He and his wife, Kim, permanent residents of northwest suburban Barrington Hills, bought a two-bedroom unit on the 18th floor of RiverView’s 32-story west tower, set beside the Chicago River in the Streeterville neighborhood between Navy Pier and Michigan Avenue. Orsini and his wife have seven children, five in high school and two in middle school.
“We used to go away on two- or three-day vacations, but today it’s a big production to fly,” Orsini says. “When we take possession Nov. 1, we plan to use it for quick vacations.”
Boating will be one of their modes of transportation at RiverView. “We’ll dock a boat at the nearby yacht harbor,” he said.
Orsini, who grew up on the Northwest Side, believes homes along the river will show substantial appreciation in the future.
“Purchasing second homes downtown is definitely a growing segment of the market,” says Gail Lissner, vice president of Appraisal Research Counselors, a Chicago firm that tracks residential sales.
Lissner warns, though, that “some of the second-home sales numbers are inflated. Speculators often mask what they are really doing by saying they are buying a unit as a second home.”
The trend of suburbanites buying in-town residences is powered in part by demographics — the impact of aging Baby Boomers.
“Members of this group may have moved to the suburbs for high quality education, but once the children are off to college, the parents wonder what to do with their leisure time,” said Leonard Jason, professor of psychology at DePaul University’s Lincoln Park campus.
“They have heard that things are bubbling in the city, which has a density of cultural and other activities.”
Jason noted that those in their 20s and early 30s usually do not have the economic resources to buy a second home, but those in their late 40s and 50s do. “They view a second home as a good investment,” he said.
He expects the impact of Boomers buying second homes to last at least 10 more years.
Real estate analyst Tracy Cross said buying a second home downtown can be a good investment that can be sold, if necessary. “For some, these are pre-retirement homes,” he said.
Cross, president of Schaumburg-based Tracy Cross and Associates, notes that Chicago has been popular with some out-of-state buyers because it is viewed as “the Manhattan of the Plains.”
But how does Chicago stack up against Sun Belt destinations?
Jim and Margaret Tarpo love Palm Springs, Calif., but they opted for a second home in Chicago, mainly because their family is here.
While their principal residence is in Ogden Dunes, Ind., they love the Chicago area so much they have had a condo in Lincoln Park for 20 years.
Now, they have bought a 51st-floor condo in the Heritage at Millennium Park, under construction at Randolph Street behind the Chicago Cultural Center on Michigan Avenue.
“We’re excited about the new place, which will be finished in the summer of 2005. We’ll be there a third to a half of the time as I ease into retirement,” Jim Tarbo says.
They will have views to the south, west and east, including Millennium Park, with the new Frank Gehry bandshell below and Lake Michigan beyond.
Tarpo, CEO of a chemical company in Griffith, Ind., gives high marks to the Heritage because of its location. The trip from Ogden Dunes on the South Shore train takes about an hour. He can drive to his office in about 40 minutes.
Andy Warner, director of sales at the Heritage, said almost 30 percent of clients are buying second homes. “I call them the cultural crowd. They want to be near the Art Institute, the Goodman, the symphony and all the cultural activities at Millennium Park,” he said.
Spectacular views are another draw. Loop skyscrapers and the Chicago River are showcased for Kim and Bob Benziger from their balcony at River Bend, the 37-story condo at the junction of the Chicago River’s Main Channel and North and South Branches.
“We had thought about buying a second home in California, Tucson or Denver, but we decided on River Bend in 1999,” said Kim Benziger. The couple’s principal home is in north suburban Deerfield.
Their one-bedroom unit at River Bend is on the 19th floor. “Chicago is beautiful. The architecture is appealing, and we love to sit on our balcony and watch the river traffic,” she says.
World travelers, the Benzigers appreciate the different culture of Chicago compared to the suburbs. But they plan to keep their Deerfield home. “I’m a gardener and I don’t want to lose the attachment to nature,” she says.
They have averaged about two weekends a month in the city, but now they may go downtown more because Bob Benziger, an attorney, has recently retired. They have two grown sons, one in Aurora, the other in St. Paul.
In-town apartments appeal to those who want to “play a little harder or work a little harder,” according to Rob Pontarelli, vice president of sales and marketing for the Magellan Group, which is developing Lakeshore East, a 26-acre project, with Near North Properties.
He estimates that 25 percent of the buyers at the Lancaster, the first high-rise condo at Lakeshore East, south of the Chicago River and west of Lake Shore Drive, are from the suburbs or out of town.
“Many of those from the suburbs want a place for weekends in town, while many from out of town buy because they come to Chicago frequently on business,” Pontarelli says.
“The trend has picked up in the last four to five years, as people decide they want a place in the heart of everything,” Pontarelli says.
Thirty-three percent are second-home buyers at the Residences at River East, a 58-story condo with 620 units in Streeterville, according to Dan McLean, president of MCL Cos., the developer.
He explained that the building appeals to second-home buyers because of the large number of smaller units — 200 studios and 200 one-bedroom condos.
“We discovered the trend a year ago and now run ads targeting second-home buyers,” McLean says.
Second homes are being purchased in all parts of downtown.
“We bought in the West Loop. It’s not as expensive there as the Lake Shore Drive area,” says David Weisbaum. He and his wife, Sonia, who live in northwest suburban Long Grove, bought a 955-square-foot, one-bedroom unit at 950 W. Monroe St., a midrise under construction.
They take possession in a year. “The kids will be off to school, and we’ll spend maybe three or four days a week downtown. It will offer a change of pace, with a variety of restaurants and shopping.”
The location is convenient because Weisbaum works on the South Side.
New construction isn’t the only housing that’s benefiting from second-home buyers.
Dave and Jennifer Nelson are returning to the Chicago apartment building where they rented 10 years ago when they were newlyweds.
Now their permanent residence is in southwest suburban Frankfort, but they have bought a 29th-floor apartment in the 30 E. Huron building, which is being converted to condos by Crescent Heights.
“When we were renting there, we thought we would buy if it ever went condo,” says Dave Nelson. Their corner unit that faces southwest will be ready in early June. “It has sentimental value since we lived there before. We plan to use it a lot of weekends,” he said. “We miss the energetic lifestyle of the city, its culture and entertainment.”
Even though the first residents of the 90-story Trump Tower Chicago will not be able to move in until the third quarter of 2007, it has proved attractive to second-home buyers.
Planned for 500 units at 401 N. Wabash Ave., it will be built on the riverside site that the Chicago Sun-Times building now occupies.
Tere Proctor, director of sales, said that 30 percent to 45 percent of sales have been to second-home buyers. Some have been from New York, Donald Trump’s hometown, and others from overseas.
Has The Donald’s celebrity on TV’s “The Apprentice” helped sales? “It couldn’t be better PR,” Proctor said. “It’s added to the success of the building.”
