Chicago’s Trump Tower has an unusually large number of condominiums for sale and for rent, and real estate agents predict that a glut of available units in the building may pressure owners to drop their prices.
Already renters in Trump Tower say they have been able to get sizable discounts.
Bearing the president’s name in massive letters, one of the most exclusive buildings downtown has taken on political overtones since Donald Trump’s presidential campaign. About 10.7 percent of the building’s 486 residential units are currently for sale — a far higher percentage than comparable downtown condo buildings.
“I’ve never seen such a glut” of condos for sale, said real estate agent Carla Walker of KoenigRubloff Berkshire Hathaway. “When people live where they’ve paid $1.5 million and up, they don’t want to see people hanging out and demonstrating. And there’s still a stigma there for some people.”
While it’s not clear just how many of the sales in the building are being driven by politics, it is evident that far more units are up for sale than in other large luxury buildings in the downtown area.
The number for sale “is amazing,” said Gail Lissner, vice president of Appraisal Research Counselors. “I’ve never seen that number for sale since they opened, and there have been very few transactions.”
Only four units sold this year, and there was a decline in the number sold last year compared with the previous year, she said. There are about 52 residential units for sale now. With the addition of the hotel condos also on the market in the building, the number of units for sale jumps to about 70. Hotel condos are units that are privately owned but rented to paying hotel guests.
Based on the residential units alone, the number of available condos in Trump Tower is almost three times higher than other large condo buildings downtown, according to Lissner’s data. No comparison is perfect, because the very high-end Elysian and Waldorf buildings are small with little turnover in units. But Lissner said that while Trump Tower has 52 of its 486 units on the market, the John Hancock building has 26 out of 703 for sale; Water Tower Place has 9 out of 260 for sale; Aqua has 12 out of 262 for sale; 340 on the Park has 11 out of 343; 600 N. Lake Shore Drive has 20 out of 395; and The Heritage has 5 out of 358.
Next to the Trump Tower, Renelle on the River — a building still awaiting groundbreaking — has sold 17 of 51 units, according to developer Belgravia Group. The units start at $1.3 million.
In a troubling sign for people wishing to sell units in Trump Tower, units for sale in the building have been on the market for increasingly lengthy periods of time, Walker said. Those currently listed for sale have been sitting on the market for an average of 205 days, significantly longer than the 152 days during the previous six-month period that preceded the election, said Walker.
Whether the glut is related to controversy over Donald Trump is difficult to ascertain. While the average home for sale in Chicago has been on the market for less than three months, Walker notes that the luxury market has been slower to move.
John Robert Wiltgen, of John Robert Wiltgen Design, has done interior design work for several units in the building and said the chatter he’s heard in the building is mixed.
“If they voted for Trump the name is a positive; if not, it’s a negative,” he said.
Entrepreneur Jack Thompson purchased his unit in the Trump building prior to the election without considering politics. He lives in Dallas but was coming to Chicago frequently for business and staying in the Trump hotel. As he shopped for a condo in the building, he was drawn to one unit because of its Beatle decor in one room. He’s now adding to that design.
“It spoke to me so much and I said I have to have this,” he said. Trump’s politics wasn’t the driver behind his decision to buy in the building, but Thompson figures his investment could be valuable in the future because of the president. “If all the dude does is make China free up their currency, he will go down in history as an important president,” Thompson said.
Ajay Goel, on the other hand, is an entrepreneur at a marketing firm and a renter in the Trump building. He was tempted to leave Trump tower when his lease recently came up for renewal because of the controversy. But he said there were 36 units up for rent — “the highest ever in the building” — giving him the ability to negotiate a steep 7.5 percent decrease for his two-bedroom 2,700-square foot condo. The deal was so good, he decided to stay.
“My landlord knows that the value of the Trump brand has eroded,” he said.
Walker has a client who purchased a two-bedroom unit soon after the opening of Trump tower in 2009 “because she loved Trump,” but she’s never lived there and has been renting it out. After raising the rent continually over the years to $8,000 a month, she recently decided to reduce the rent to $7,500 because of the supply of rentals in the building and downtown, said Walker.
The average price of condos for sale in the building, however, does not reflect competitive pressures. In fact, the average sale price was $1.16 million for the last six months compared with $1.08 million during a comparable time last year, Walker said. And owners during the last six months sold their units for 93.7 percent of their list price. During a comparable time last year, it was 91.8 percent.
Lissner said the average sales price per square foot during the last quarter of 2016 was $861, an increase over the $840 during the first two quarters of the year.
Walker said she thinks owners of condos in Trump Tower often do not feel the urgency to sell because they own the units as part-time residences or investments. Yet Wiltgen wonders if some units already are coming onto the market because owners want to sell before the price drops as people move into the newest luxury building, the Wanda Vista tower, which is scheduled to open 2020. For clients seeking luxury, he said, the newest building tends to be the attraction.
gmarksjarvis@chicagotribune.com
Twitter @gailmarksjarvis