THE MAGNETIC NORTH SIDE: LOGAN SQUARE ON THE UP IN CHICAGO
US Investment Manager,
Say the word hipster and a lot of things come to mind: skinny jeans, fixed-gear bikes and unique grooming habits to name just a few. But, perhaps a little surprisingly, the biggest phenomenon associated with contemporary “hipster culture” is gentrification and rising property values.
Across the world’s major cities, a familiar pattern has emerged as young creative types move into traditionally working class neighborhoods in search of affordable housing without too far removing themselves from the urban centres in which they work. And when they move, lots of things follow them.
From Williamsburg in Brooklyn to the Mission in San Francisco via Shoreditch across the pond in London and increasingly even NoHo in Hong Kong, trendy bars and restaurants, eclectic cafes, co-working spaces and artisan crafters have popped up across neighborhoods once pioneered by the hipster classes.
Such developments are increasing the liveability of these once quiet or even blighted blue-collar enclaves and eventually turning them into some of the hottest neighbourhoods in their respective cities.
If you had told me 15 years ago that there would one day be millions to be made in converting old factories and skid row hotels in the worst parts of New York and San Francisco into luxury residences I’d have thought you were crazy, and yet these are now some of the best property investment opportunities around.
Of course, not many saw the revitalisation of America’s urban centres coming. But with reduced crime, a desire to go carless and the tendency of many of the so-called Millennial generation to put off marriage and family till their mid-30s or later, a greater percentage of Americans are now living in cities than have been since the 1960s.
And with all this new demand for residential accommodation in the hearts of many of America’s most prominent cities, home prices and rents have risen to the extent that many are being pushed into areas once considered dull or even edgy.
While most will agree that opportunities to capitalise on this effect in the major cities on the coasts are increasingly hard to identify, developers and investors alike are turning their heads to Chicago instead, where many of the tell-tale indicators of gentrification once seen in Brooklyn and LA’s Echo Park are now on show in Chicago’s fast-changing Logan Square.
Located on the North Side, directly to the west of Chicago’s posh Lincoln Park neighborhood and only about 15 minutes from the Loop by car, Logan Square is increasingly on the radar of house hunters in Chicago who are feeling priced out of traditionally prime North Side neighborhoods like Lincoln Park, Lake View and Wicker Park.
At first, the vast majority of migrants to Logan Square were young singles from Lake View, the North Side district that includes the neighbourhoods of North Halsted, Wrigleyville and Boystown that have traditionally been the top destinations for young 20-somethings in Chicago.
Increasingly however, lured by the farmer’s markets, cafes, music venues, gastropubs and chic cocktail lounges, we’re seeing older, wealthier and more well-to-do couples and young families from Lincoln Park and Wicker Park eyeing Logan Square as well.
This shouldn’t be too surprising given how important value is to home buyers – the median home price in Logan Square is about half that found in Lincoln Park.
Developers are taking notice of these trends. Spurred on by the demographic changes and a city-sponsored development initiative along Milwaukee Avenue, the main road artery connecting Logan Square to Wicker Park and the Loop, there are now 20 major development initiatives scheduled to complete in the area by 2020. Ranging from residential and retail to mixed-use or purely commercial, these transformative projects promise to change the face of Logan Square and push up property values even further.
With all this action set to improve Logan Square, it’s hard to believe that the median home price is still as low as it is ¬– currently below USD500,000, with prices per square foot at or around USD200.
Many investors have already been sold on the potential of the Chicago market, noting its high yields, low price point and the affordability ratio of the market as a whole, but most have been focused on downtown condos. With all the changes on the cards on the North Side however, they’d be wise to keep their eye out for opportunities in Logan Square as well.
Following on the popularity of our previous Chicago projects at 235 West van Buren and The Legacy we’re expecting to launch a new investment that will be perfectly placed to capture the potential on offer on the city’s North Side very soon. Stay tuned for more details.