It’s Not Just Ken Griffin. Rich Chicago Residents Losing Their Shirts on Real Estate
For years, Chicago’s wealthy elite have been hooked on real estate, buying up luxury condos in high-rises and opulent single-family homes in sought-after neighborhoods. But like the city’s beleaguered mayor, Rahm Emanuel, many of these high-end property owners are waking up to a harsh reality: they’re losing their shirts.
Ken Griffin, the billionaire CEO of Citadel, made international headlines last year when he complained about his struggles to resell his $58 million penthouse condo at the One Miami project in Florida. But Griffin is not alone in his struggles to offload his luxury properties.
Take pension-fund manager, Joseph Paul, who invested $2.5 million in a five-bedroom, six-bath estate in the trendy Kenwood neighborhood, hoping to flip it for a profit. Instead, he’s been stuck with the property for nearly four years, and it’s now worth less than half of what he paid for it.
Another example is real estate developer, Brian Gordon, who spent $1.2 million on a lakefront condominium at the upscale Breakwater development in Streeterville. While it was once considered a prize property, the condo is now valued at around $800,000, with no takers in sight.
Even the city’s greener-than-green mayors are feeling the pain. Rahm Emanuel, who made his fortune in real estate, sold his Hinsdale home earlier this year for $1.7 million, slashing its original list price by half.
The explanation lies in a perfect storm of market changes, oversupply, and loan issues affecting the local real estate market. The rise of online real estate platforms like Zillow and Trulia has made it easier for buyers to shop and negotiate, leading to increased competition and downward pressure on prices. Add to that the flooding of the market with new constructions and redevelopments, and it’s proving tough for property owners to recoup their investments.
As the once-red-hot Chicago real estate market starts to cool, it’s clear that even the city’s most affluent residents are no longer bulletproof. Unlike the sun-kissed shores of Miami Beach, the Windy City is facing a harsh winter of sticker shock and uncertainty, and even the rich and powerful are feeling the chill.