The Great Recession turned out to be a pretty good thing for Chicago's West Loop. Since 2008, when the housing market collapsed, the neighborhood emerged like a phoenix from the ashes as one of the hottest in the city. These days, the former urban warehouse and manufacturing district is the trendiest place to be.
"Post-recession, the West Loop has come around probably more than any other neighborhood," said Aaron Galvin, president at Luxury Living Chicago rental brokerage. "Even before the recession, it had some decent restaurants and some condos, but not the multifamily boom and not the restaurants and industry and technology coming in droves."
"The neighborhood has the right mix of zoning that allows people to work, live and play within blocks, and it's only getting better," said architect Mike De Rouin, president at FitzGerald Associates Architects.
Depending on who does the mapping, the West Loop is bordered roughly by Ashland Avenue on the west, the Eisenhower Expressway on the south, the Chicago River on the east, and Grand Avenue on the north. Parts of that area also are known as West Town and Fulton Market. West Loop subneighborhoods include Greektown, Randolph Row and the Fulton River District.
The attractions are many: Brand-spanking-new apartments with resortlike amenities, extensive restaurant and bar offerings, chic retail boutiques, easy walking to downtown and a web of major highways and public transportation stops. Novelty leisure activities are afoot, too. Bad Axe Throwing is opening its first Chicago indoor axe-throwing range this month at 165 N. Loomis St.
"A lot of times we see residential development leads the way, and slowly the commercial and retail sectors follow," said Gail Lissner, vice president at Appraisal Research Counselors. "Here we are getting tremendous settlement of all property types at the same time."
Corporate America also is taking note. Google moved its Chicago offices into a former cold-storage building at 1000 W. Fulton Market in December. McDonald's will relocate its headquarters and 2,000 employees from Oak Brook to the site of the former Harpo Studios, 1058 W. Washington St., in 2018. More companies are expected to follow.
"A lot of those employees will stay in the suburbs and commute in, but you'll probably have a ton who move to the neighborhood or close to it," said Redfin real estate agent Alex Haried, who frequently works the area.
"We are going from sweatshirts to suits," said Susan Tjarksen, principal and managing broker at KIG, an institutional multi-family brokerage firm.
The housing stock is an eclectic, uneven mix. Sleek glass-and-steel apartment towers dominate, followed by smaller-scale vintage loft condominiums, a few new condos and a smattering of town homes. Single-family homes are rare and tend to cluster closer to Ashland Avenue.
From 2008 until now, 4,171 rental units were delivered in the West Loop, reports Appraisal Research Counselors. An additional 507 units are planned for 2017, and more are in the pipeline. These include the 350-unit Arkadia Tower apartments at 765 W. Adams St. and the proposed One South Halsted, a 492-unit apartment tower at Halsted and Madison streets; both buildings were designed by FitzGerald Associates Architects. Under construction by Related Midwest is 1035 W. Van Buren St., a 30-story mixed-use tower with 300 luxury apartments and 12,800 square feet of retail space, slated for completion in August or September 2017.
"There is a cool melding of all these different genres of people," said Related President Curt Bailey. "That talks to how immensely strong this market is. We're seeing the West Loop turn into one of Chicago's most mature neighborhoods."
KIG recently brokered a joint venture to renovate and expand the Medical District Apartments and is working on a large mixed-use development; both projects are on Ashland. And the granddaddy of them all, the 2,346-unit Presidential Towers at 555 W. Madison, completed in the late 1980s, recently underwent a massive multiyear renovation.
New apartments are being rented almost as fast as the paint dries.
"During the first half of 2016, we leased 300 apartments in the West Loop," Galvin said. "All the units exclusively listed with us have been absorbed (leased) within one month of delivery. Five years ago, there weren't 300 new apartments available in the whole area."
According to Chicago Apartment Finders, the average rent for a one-bedroom apartment in the West Loop is $2,050. By comparison, the South Loop average is $1,850 and the River North average is $2,075.
Home ownership generally means condominiums, but few have been built in recent years. Lenders, many of who were burned by uncompleted megasize projects during the recession, became leery of financing them again. Savvy developers pivoted and revamped their condo plans into rentals like Marquette Cos. did with Catalyst apartments at 123 N. Des Plaines St. Belgravia Group, though, rescued a 24-unit luxe, feature-packed condo project at 23 N. Aberdeen St. and successfully completed three more.
Prices vary widely due to age and architecture. They range from about $200,000 for a small one-bedroom resale to over $2 million for a spacious new one with high-end trims and finishes. But buying anything is a challenge. Bidding wars are common, and buyers must move quickly. Last month clients of Haried offered $365,000 for a 1,400-square-foot two-bedroom condo listed for $350,000. They lost. A colleague's clients bid $375,000 for the same unit, and they lost too. The sellers received 14 offers.
"For the past two years, it's been a very hard neighborhood to get something under contract," Haried said.
According to Redfin, 320 West Loop homes sold for a median price of $400,000 during the three-month period ending July 31. During the same time period four years ago, the median selling price was $305,000. Of this year's sales, 303 were condos, 14 were town homes, and three were single-family homes. They were on the market for 41 days, and nearly half sold for over the asking price. When considering Chicago as a whole, the median home price was $285,000, and market time was 57 days.
Lynn Osmond and her husband moved to a West Loop loft condo 3-1/2 years ago. She enjoys the quiet street she lives on, walking to her job on Michigan Avenue, the nearby restaurants and the diversity of people and architecture. But as president of the Chicago Architecture Foundation, she has concerns about the rapid development, including the threat of modern construction blotting out local character and an influx of car-owning suburban employees in an already parking-deficient neighborhood. There's also the question of how to strike an appropriate balance of owners and renters, and what types of new businesses will best serve the community. Lack of green space is also an issue.
"I don't think any of it (the new development) is bad necessarily, but all these things are colliding together, and there isn't a comprehensive plan," Osmond said. "Things are happening by block-by-block decisions rather than a master plan of what works for the neighborhood and how to accommodate all the different uses."
Resident Richard Dees, who also advocates for a master plan, is more direct. "The only things being built in the West Loop are luxury condos for $2 million-plus or small rental apartments," he said. "There is no affordable housing for normal people and families."
Dees is a board member at Monroe Manor condo association on the 800 block of Monroe Street, which filed suit against LG Development and the city over an adjacent approved condo project at 111 S. Peoria St. Both projects are low-rises. The group's primary complaints are about safety, health, and air and light quality as well as how new developments are green-lighted.
"The courts will have to decide this one," Dees said.
At present, industry players expect further development of all sectors, and they agree the market is far from peaking. Apartments will remain popular, De Rouin said, pointing to demographics that suggest millennials, compared with previous generations, will live longer in apartments, with some opting for a lifetime of renting rather than owning.
"The bigger question today for developers is how to differentiate their apartment buildings from the competition," De Rouin said.
"I think we'll see more job growth, more bike lanes and another grocery store and more infiltration of street-level pedestrian retail, not big boxes," Tjarksen said. "We'll continue to see people who want to call that neighborhood home."
Pamela Dittmer McKuen is a freelance writer.