Is Michigan Avenue, the fabled street of world-class shopping, trendy restaurants and office buildings instead becoming Chicago's version of New York's Park Avenue?
One look at the number of vintage office buildings being converted into condominiums and it begins to look that way.
If the landmark Wrigley Building, one of the most famous buildings on what is a world-famous stretch of street, eventually goes condo, it would join stalwarts such as the Palmolive Building and the old Britannica Center that will have replaced office credenzas with two bedrooms, a bathroom and a room with a view.
In all about 5,000 residential units now exist along Boul Mich from Oak Street to Roosevelt Road.
And that number is expected to increase.
"Michigan Avenue has evolved as an absolutely prime residential corridor," declares Gail Lissner, vice president of Appraisal Research Counselors in Chicago. "Even people who don't know Chicago have heard of Michigan Avenue. It has worldwide recognition. The location can't be beat."
Those drawn to the boulevard tend to be a different breed. "These people want to be where it's happening," Lissner said. "They don't want quiet, tree-lined streets."
Consider the Kurdins of Ohio. The couple visited the city 10 or 12 times last year and decided to buy a second home here rather than Florida.
"I grew up in New York, but the shopping is better in Chicago. The Magnificent Mile, Oak Street is so centralized. We have our favorite restaurants," said Jan Kurdin, 42, who with her husband, Howard, 45, bought a two-bedroom condo at Metropolitan Tower, 310 S. Michigan Ave. "We bought a fun place in Chicago to go where we can play."
James Kinney, president of Rubloff Residential Properties in Chicago, estimates that 20 percent to 30 percent of buyers on Michigan Avenue are like the Kurdins, part-time residents.
"There are a lot of empty-nesters selling their suburban houses and coming downtown," Kinney said.
Prices at new developments are pushing up to $1,000 a square foot, Kinney said. As for older condos, he said a two-bedroom apartment at Water Tower Place is $1 million-plus.
A driving force behind Michigan Avenue's rise as a corridor of condos are low interest rates and the willingness of people to plunk down what in another era might be considered huge amounts of money on residences.
Many of the older office buildings, especially those along South Michigan Avenue, also play into the conversions. No longer efficient as office space, they are better suited for conversion into residential units, said Bob Horner of Monroe Building Development Corp.
He and partner Ibrahim Shihadeh plan to convert the office building at 104 S. Michigan Ave. into 96 residential units, at prices from $200,000 to $4 million. Built in 1911, the structure is across the street from the Art Institute of Chicago.
"Millennium Park has accelerated the residential development of Michigan Avenue," Horner added.
Jerry James, principal in Edward R. James Partners LLC, says North Michigan Avenue "is a premier location, but no land is available."
As a result, James has proposed building a 64-story structure with 240 units in back of the Fourth Presbyterian Church, across the street from the John Hancock Center.
"We have filed with the Plan Commission and now are waiting," said James, who noted that the project has been opposed by Ald. Burton Natarus (42nd).
James said his building's smaller units will be around 1,100 square feet, aimed at people who want a place to stay for weekend visits, to larger permanent residences priced at $1 million or more.
Conversions gain cost edge
"As residential prices go higher, it's more economically feasible to convert the old office buildings on Michigan Avenue," said Keith Giles, principal in Frankel & Giles Real Estate, which converted the vintage office building at 888 S. Michigan Ave. into 36 condos.
"Millennium Park has become an international draw, so it's a major advantage being across from it," Giles added.
Louis D. D'Angelo, president of Metropolitan Properties of Chicago, is the developer of Metropolitan Tower, 310 S. Michigan Ave., a building known for its distinctive blue light. Built as the Straus Building in 1924, to many Chicagoans it is the Britannica Center because for years it was the headquarters for Encyclopaedia Britannica.
The 243-unit conversion began sales in 2004 of the one-bedroom to penthouse units with prices ranging from about $300,000 to $2 million. It is about 40 percent sold.
The buyers are largely empty-nesters who like to walk to work and live near the city's cultural opportunities, D'Angelo said. "We are having more out-of-state folks than we thought," he said. Buyers are about evenly split between city and suburban buyers.
The developer also plans to redevelop the former Karpen Building at 318 S. Michigan Ave., which is now vacant. The project will be called the Richelieu.
In 1997, D'Angelo redeveloped the McCormick Building, which includes the Residences of 330 S. Michigan.
"We sold 78 units in 4 1/2 months," he recalls. Those condos are on the top six floors of the building, which still has 14 floors of commercial space.
D'Angelo credits the city's investment in infrastructure--the museum campus, trees and flowers and the success of Millennium Park--as well as escalating congestion and high development costs north of the river for the spurt of condo projects along South Michigan Avenue.
In addition, the stretch designated as Historic Michigan Boulevard in 2002 has forced builders and developers to think about residential rather than commercial uses.
"The challenge for the developers and the city is to be creative with adaptive reuse as the office market moves west and the residential moves east," he said.
Wrigley a famed name
If the Wrigley Building eventually turns condo, it would easily become one of the most famous home addresses in Chicago, real estate executives said.
Rubloff's Kinney said construction of Trump Tower in back of the Wrigley Building will energize everything around it.
"The Wrigley Building could be an exciting place to live, but it might be expensive to maintain its terra cotta facade," Kinney said.
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