Cracks in Chicago’s luxury real estate market | Real Estate

Pat Ryan, the billionaire insurance mogul behind Aon and Ryan Specialty Group, is no stranger to bold bets. But his latest move wasn’t about business; it was about real estate, and it came with a steep loss.

Ryan and his wife, Shirley, the namesake of the Shirley Ryan AbilityLab, sold their three-bedroom condo on the 62nd floor of 900 N. Michigan Ave., better known as the Bloomingdale’s building. The deal closed on Aug. 19 for $1.75 million. That’s about 60 percent less than the $4.4 million they paid in 2018, according to Crain’s Chicago Business.

This marks the couple’s second time selling at a steep markdown in the building. Just last December, the couple sold another condo on the same floor for $1.3 million, well under the $1.9 million they paid back in 1989.

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“Many Bloomingdale’s condo owners are long-timers who aren’t interested in doing the updating and rehab that might make their unit sell for a higher price,” said Pamela Miles of Berkshire Hathaway HomeServices Chicago, who represented the Ryans in the sale. Outdated kitchens, older finishes, and the challenges of rehabbing in a high-rise keep many sellers from modernizing their units.

The result is that deals are closing at prices ripped straight from the 1990s. One condo recently sold for $2.62 million, just over half the $5 million the sellers paid in 2009. Ryan’s sale itself went for less than the unit sold for in 1994, about $1.85 million, or roughly $4 million when adjusted for inflation.

For Ryan, whose net worth, according to Forbes, is estimated at nearly $12 billion, the loss hardly puts a dent in his overall wealth. But for Chicago’s luxury condo market, these sales paint a more complicated picture.

Across the country, luxury real estate prices are hitting record highs. In cities like Miami, New York, and Los Angeles, prime properties are commanding bidding wars. Yet in Chicago, particularly at legacy addresses like 900 N. Michigan Ave., a different story is being told: Prestige alone isn’t enough to hold value.

For the Ryans, the sales may not sting financially, but they highlight a reality faced by many longtime condo owners downtown: lifestyles evolve. As they age, some residents spend less time in the city, splitting their lives among multiple homes. For others, the hassle of updating a condo isn’t worth the disruption.

Buyers, meanwhile, are walking into a rare opportunity. For those willing to invest in renovations, Bloomingdale’s condos represent one of the few places where luxury square footage in Chicago can be had for what amounts to clearance pricing.

What feels like a loss for sellers could be a win for buyers. For under $2 million, you can live in a tower once reserved for Chicago’s elite, something unheard of in other global markets. It opens the door to a lifestyle once reserved for the elite.

Maybe that’s less a warning sign and more an invitation: Chicago’s luxury market is recalibrating, and in that reset, opportunity is hiding in plain sight.