It would be hard to find a better location in Chicago than 850 Lake Shore Drive, nestled between the Streeterville and Gold Coast neighborhoods with pristine lake views and easy walks to some of the city’s best dining and entertainment.
But this apartment-to-condo conversion project from Crescent Heights has something else besides location working in its favor: Timing.
Buyers have been on the sidelines, either reluctant to move out of homes with low-interest-rate mortgages or waiting for escalating rates to retreat before they buy. Values have been compressed because the rates have been high, and, as the rates come down, property values will increase, said David Wolf, who is handling sales and marketing at 850 Lake Shore Drive.
“This is the best opportunity in a couple decades to buy real estate,” said Wolf, CEO of Wolf Development Strategies. “This is the moment and time, a six-month window, for people to really take advantage and understand that as these rates continue to decrease, prices are going to go up. It’s going to be more competitive, and people who are buying right now are the smart ones.”
The 850 Lake Shore Drive developer, Crescent Heights, was founded 35 years ago and originally built its reputation by mostly selling conversions aimed at the middle market in major cities across the country. The company ultimately diversified toward development of luxury rental high-rises.
The opportunity at 850 Lake Shore Drive popped up, and Crescent Heights chose to go against the grain, seeking a condo conversion while so many other developers are focused on apartment rentals.
“We’re at the point where the market is now saying it can tolerate a conversion,” said Crescent Heights Partner Jason Buchberg. “There is no condo supply pipeline, and, at our price points, I think it makes a lot of sense. It’s definitely contrarian, but we’ve always been contrarian.”
The building opened in 1927 and retained its historical features after a full renovation in 2014, with additional upgrades in progress blending modern comfort with historical elegance. Available units include studios from $250,000; one bedrooms from $279,000; two bedrooms from $534,000; and three-bedroom duplexes from $1.17 million.
Building amenities include a Grand Lounge with 25-foot ceilings, a rooftop skydeck with grilling stations and lounge area with TV; rooftop dog run; rooftop coffee lounge; a fitness center with pool, thermal bath and locker rooms; co-working spaces; valet garage parking; 24-hour door staff; plus bike storage, dry cleaning, guest parking and more.
Chicago needs a project like 850 Lake Shore Drive, and the timing is right for it to hit the market now, Buchberg and Wolf agreed.
“The Chicago condo market is very deep and very large. It’s got to be one of the tops in the country,” Buchberg said. “Pricing has been off, but there have been a ton of individually deeded transactions over the last 24 months. The baseline for a market is there.”
Wolf noted that 850 Lake Shore Drive offers a unique opportunity for buyers who want something new but at resale value pricing.
“When you look at 850, it gives you all the benefits of new construction but with such a value on pricing,” Wolf said. “As rates come down, people who are able to capture that now are going to be really happy with their decision a year from now or two years from now.
“We’re at a very, very unique time in the market and the economy. This is an opportunity that hasn’t been seen in a couple decades.”