Mansions are selling for $100 million and up in markets around the country, thanks to a surging stock market and wealth created from booms such as cryptocurrency and the frenzy over artificial intelligence.
In June, a mansion in Malibu, California, sold to an unidentified buyer for $210 million, a record for that state. Last year, music power couple Jay-Z and Beyonce paid $190 million for a house that is also in Malibu. And billionaire and former Chicago resident Ken Griffin in 2019 paid a U.S. record $239.96 million for a triplex penthouse atop a building on Central Park South in New York City. Griffin has also paid $250 million for various properties in Palm Beach, Florida, in recent years.
Deals in the $50 million to $100 million range have become almost commonplace in southern California, New York City and south Florida.
And yet, in one of the stranger conundrums of the local market, the Chicago area has yet to see a single megasale — a residence that sells for $100 million or more — or even a quasi-megasale. The Chicago area has never even seen a $25 million sale of a single residential property.
The dearth of megasales in the Chicago area is probably linked to the fact that local listings tend to be less pricey than in other cities, families here tend to assemble large homesteads rather than buy them, and buyers bring good old-fashioned Midwestern sensibility to the process, agents said.
A good value
Agents specializing in high-end properties agree that the relative value of homes in the Chicago area compared with the country’s coasts has helped keep a lid on megasales.
“Chicago always has been undervalued as a major metropolitan city because it’s such a great place to live,” Nancy Tassone of Jameson Sotheby’s International Realty said. “It offers so much.”
While places like New York, Los Angeles and other areas in California attract celebrity buyers, just like Chicago does, the residential market in the Windy City tends to be more local and not as transient, Tassone said. That means Chicago doesn’t go through the highs and lows that some other markets experience.
“We have only so many people here who can afford or are willing to spend that much,” Tassone said.
Jennifer Ames of Engel & Völkers Chicago said Chicagoans should “stand on top of the mountain” and celebrate local real estate values.
“There’s a lot of people who don’t understand Chicago and don’t realize that we have all the culture and world-class museums and all the other things,” she said. “It’s sort of sad, but we are a flyover and yet, there’s so many features — we’ve got water, we’re centrally accessible.”
Although the real estate taxes in Chicago are high relative to many other places in the country, they’re also high in places like Manhattan and San Francisco, Ames said.
“Also, there’s obviously old money here, but a lot of the newer money is concentrated in the financial sector and they’re savvy people not making emotional decisions. Those decisions are grounded in other sales, so nobody’s really going to jump and pay double what somebody else paid just because they like something,” Ames said. “To some degree, to get us up into that high-priced (sale) range, it would be a gradual process. Some sale would ratchet it up, and then another one would ratchet it up. Nobody’s going to be the sucker who’s going to pay double what somebody else paid.”
Record sales in the Chicago area
For now, the Chicago area’s three highest recorded residential trades are the $21.17 million that Griffin paid a developer for one of his full-floor spaces in the building at 9 W. Walton; the $20.56 million that Mexican billionaire German Larrea paid in 2022 for a 71st-floor condo in the St. Regis; and the $20 million that private equity executive Bryan Cressey paid in 2022 for the penthouse in the Trump International Hotel & Tower. The high-water mark in nearby Lake Geneva, Wisconsin, is the $36 million that billionaire J. Christopher Reyes paid in 2022 for the late Richard Driehaus’ mansion.
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While some Chicago-area billionaires have paid more than $30 million to create their own properties, they have done so by purchasing several properties and combining them, often with significant construction costs, rather than paying a single, up-front sum for them.
For instance, Griffin famously paid a combined $58.75 million in 2017 in four separate transactions to buy the top four floors of the building at 9 W. Walton Street on the Gold Coast. He never combined them or built them out, and with his move to Florida, he sold two of the units on Nov. 12 for a combined $19 million. One of the remaining two units is on the market for $8.5 million.
Justin Ishbia has paid a combined $39.9 million since 2020 for four separate lakefront homes in Winnetka — three of which are contiguous and had a combined $33.7 million cost — to assemble a homesite on which he’s building a mansion that will have a $44 million construction cost, according to the building permit. The $77.7 million that Ishbia apparently will spend on his new mansion and land likely will be the most money anyone in the Chicago area ever has put into a home.
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And filmmaker George Lucas and his wife, Mellody Hobson, paid $11.2 million in 2023 to buy one of Griffin’s full-floor Park Tower penthouses and are in the process of combining it with their existing full-floor penthouse one level below, which they bought in 2015 for $18.75 million. Once the couple spends the $3.5 million that their building permit estimates is the construction cost to combine the two units, the result will be a 16,000-square-foot duplex penthouse condo that will have cost them $33.5 million.
Ames and Ryan Preuett of Jameson Sotheby’s International Realty pointed out that both the city and suburbs have recently built mansions with what they deem to be very high values. However, those mansions still are under the control of their first owners, so there is no recorded sale amount yet.
When those mansions one day are resold, Ames and Preuett separately said, their sale prices could rival some of the national megasales.
Preuett said that since COVID-19, he has observed that “the people with means build a legacy, generational property so it’s like a home base created, where should something similar happen, they could accommodate a large family to kind of hunker down.”
“Certainly people (in Chicago) are making these kinds of investments, but you just don’t see them, because they’re creating them as opposed to buying them from someone else,” he said. “I’d expect that down the road, things will change and people will be open to that.
Privacy is also a consideration, Preuett said.
“Once you get over the $20 million mark, you really start making a splash in the media if you were to list that, and the people I’ve worked with in that arena are cognizant of that, and privacy is important to them,” Preuett said. “So there’s almost an incentive to create what you want instead of buying it from someone else, and you can do it a little more discreetly instead of going in and buying the most expensive sale ever.”
Is a record individual sale price coming?
Given the upward movement nationally in purchase prices, is a record sale price for a single, finished Chicago-area property imminent?
Jena Radnay of @properties Christie’s International Real Estate thinks so. She’s the listing agent for Windsor House — retired investment banker Muneer Satter’s seven-bedroom, 13,894-square-foot mansion on 2.3 acres on Lake Michigan in Winnetka — which is available for $35 million. That’s the Chicago area’s highest asking price for a home. Satter spent years developing the property, which includes 223 feet of private beachfront, along with a double-door boathouse and a commercial-level boardwalk.
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Radnay said Satter spent at least $65 million to develop and improve the estate and the mansion, which was designed by the Mayo & Mayo architectural firm. Satter paid $9.5 million in 2002 for the mansion and paid $4.1 million in 2013 for the property next door, which he then transformed into a commercial-level botanical garden with a Lannon stone custom fountain, an infinity pool and a heated motor court for 10 cars.
Radnay predicted that the mansion will sell for close to its list price.
“He spent in the $65 million to $72 million range (to develop) it and…it can’t be replicated,” Radnay said. “I think everyone is always thinking, what does this mean if I am buying the most expensive property on the lake in Illinois, but then they take a step back and realize that there is nothing that even comes close to this as it’s the best beach and boathouse and boardwalk in Illinois. Not one other lakefront property even starts with that.”
Dramatic Price Cuts
The owners of other Chicago-area properties that have been listed with high asking prices have had to settle for far less to find buyers. For instance, United Automobile Insurance Co. Chairman Richard Parilllo and his wife, Michaela, listed their six-bedroom Lincoln Park mansion in 2016 for $50 million. They claimed to have spent $65 million building the estate, including the $12.5 million they spent on land acquisition. After a series of price cuts, they sold it in August for $15.25 million — still an all-time record sale for a house in Chicago’s city limits, but far less than they originally had sought.
Another vivid example is the Highland Park estate of a man who needs no introduction, Michael Jordan. Listed since 2012, Jordan’s 56,000-square-foot lair on 7 acres first carried a $29 million price tag, but since 2015, the NBA Hall of Famer has not budged from his present $14.855 million price tag. The mansion currently is under contract.
Still another recent sale price that was for far less than an owner once had wanted involves the six-bedroom Grand Reve mansion in Winnetka. After more than 10 years on the market, the mansion sold in 2020 to Stephen Kao for $8.75 million — far less than the $32 million that sellers Sherwin and Deborah Jarol initially had sought.
As for some recent big discounts relative to what sellers originally had asked, Preuett said that a lot of those properties are constructed without any thought of resale on the back end.
“A lot of people say, I’m gonna live here forever, and life happens and things change,” he said. “So some things get built very specifically and they don’t necessarily resonate with a buyer. Typically the ones that have been on the market for a long time and sold finally for a fraction were very specific and were not what the current buyers in the market are looking for.”
Midwestern sensibilities
The Chicago area’s lack of megasales may also have to do with an innate trait of the region, Ames said.
“There’s another element that goes to the heart of who we are as Midwesterners. This is not a town of glitz and pretense. As a culture, we’re more grounded in the Midwest, and we’re not trying to outspend our neighbor and I think in some parts of the country, that is more the case,” Ames said. “So I think when you think of the mindset of Midwesterners, it kind of makes sense that even super-wealthy people are not going to make dumb decisions, or emotional decisions. We’re more practical. If you think about Malibu, or Manhattan, there’s a lot of showing off.”
Bob Goldsborough is a freelance reporter.
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