Dalian Wanda’s joint venture luxury residential project in Chicago has sold US$200m since March
US$1 billion project, jointly developed with Magellan Development Group, is slated for completion in 2020
Dalian Wanda Group’s first joint venture luxury hotel-residential project in Chicago has generated US$200 million in revenue from the sale of 20 per cent of its condominiums since the official launch in March, the co-developer said.
The US$1 billion mixed-use luxury project, Vista Tower, comprises 406 apartments and a five star 191-room hotel, called Wanda Vista Hotel.
The project, jointly developed with Chicago-based Magellan Development Group, is slated for completion in 2020 and is located in the city’s Lakeshore East neighbourhood.
Unit prices start at US$1 million for a 1,000 sq ft, one-bedroom flat, and go up to US$17.1 million for the penthouse on floors 92 and 93.
Sean Linnane, executive vice president of Magellan Development Group, said buyers have so far snapped up about 80 units worth a total of US$200 million. “Most buyers are locals and include some mainland buyers,” he said.
Magellan Development Group has developed more than US$2.5 billion worth of residential, mixed-use, and commercial projects in Chicago and throughout the US since it was founded in 1996.
Linnane said Vista Tower was the firm’s second project jointly developed with a Chinese partner.
The US group won the Chicago site for a total of US$150 million, including infrastructure development. Wanda is responsible for marketing the development in major mainland Chinese cities such as Shanghai and Beijing.
“We will focus on Hong Kong, Singapore and the Middle East,” Linnane said, adding that it was the firm’s first project to be marketed overseas.
Apartments at Vista Tower are selling for an average of US$1,000 per square foot, less than half of New York City’s US$2,000 to US$3,000 per square foot, with some projects in New York even fetching as high as US$5,000 to US$6,000 per square foot.
JLL said Asian institutional investors have shown strong interest in the American city with more than US$2.8 billion invested in Chicago real estate recently.
Notable transactions include Anbang Insurance group’s purchase of the US$497 million Fairmont Hotel and US$569 million InterContinental Hotel. In other Chicago deals, the Korea Teachers Union paid US $344 million for the Three First National office tower and Global Logistic Properties of Singapore bought the LogistiCenter for US$53 million.
Since 2011, a total of 34 per cent of all real estate investments in Chicago have originated from Asia Pacific buyers, the largest source of foreign investment in the city, followed by European buyers who accounted for 33 per cent of deals, according to JLL.
Prices for condominiums with a hotel component in Chicago ranged from US$854 to US$1,091 per sq ft, which exceeds the pre-recession peak of US$800 per square foot, said the property consultant.
JLL, the sole agent in Asia for the Vista Tower project, said home prices in Chicago saw an average 5.5 per cent appreciation per year since 2011, partly due to the shortage of new condominiums.
Of the 860 proposed new condominium units, 283 were still under construction. About 43 per cent of those under construction were already sold under contract, JLL said.