It’s genuinely fascinating to delve into the complex forces that shape the economic and social fabric of our major cities! We’re about to explore a story that has captured significant attention – the momentous decision by one of the nation’s foremost financial figures, Ken Griffin, to relocate his formidable enterprise, Citadel, from Chicago to the sun-drenched state of Florida.
This wasn’t just a personal move; it represented a shift of significant wealth and business operations, drawing a spotlight onto the factors influencing such decisions in major urban centers today. It’s a narrative filled with fascinating insights into everything from urban economics and real estate trends to perceptions of safety and political leadership.
One of the most tangible aspects of this relocation saga involved Mr. Griffin’s personal real estate holdings in Chicago. He held four luxury apartments atop the No. 9 Walton building in the city’s affluent Gold Coast neighborhood.
Interestingly, he sold two of these units for a total of $19 million recently. Cook County records indicate he acquired these two units in 2017 for approximately $34 million, meaning the sale represented about a 44 percent loss on that specific transaction.
A Citadel spokesperson, Zia Ahmed, put this loss into perspective back in October, noting that “While the value of Ken’s properties in his former hometown may have declined, thankfully it is only a small loss compared to the appreciation he’s enjoyed on his property investments in Florida.”
And indeed, Mr. Griffin has made substantial investments in the Sunshine State. Between 2020 and 2023, he spent around $169 million on properties in Miami Beach’s exclusive Star Island neighborhood.
In 2022, he also acquired two bayfront houses in Coconut Grove, another affluent Miami area, for over $100 million. Furthermore, over a decade, he has amassed 27 acres in Palm Beach, totaling roughly $450 million.
Although a Citadel representative suggested that his real-estate investments in Florida adequately offset the Chicago losses, it’s still quite striking to witness such a substantial decrease in the valuation of Chicago properties.
Real estate agents in Chicago offered some context for the sales price of Griffin’s Chicago property, noting it wasn’t entirely surprising. Michael LaFido, a broker, characterized properties worth $10 million or more as “superprime properties” and a rarity in Chicagoland.
LaFido’s observations highlight a stark contrast: in 2023, a mere four properties in the Chicagoland area fetched prices of $10 million or more, whereas Miami, according to Knight Frank’s report, saw an impressive 55 properties exceeding $10 million sold in just the second quarter of 2024 alone.
Rafael Murillo, a Compass agent based in Chicago, shared a similar perspective, noting that eight-figure properties were not a common sight. He aptly described Chicago as presenting ‘a much more affordable luxury market when compared to Miami or New York.’
Murillo cited another luxury property sale at a loss this year: a 6,100-square-foot condo in the city’s St. Regis tower. This unit was purchased for $8.2 million in 2021 and sold for $7 million in April, illustrating a broader trend.
Even marquee listings in the suburbs have faced price cuts. The context mentions basketball star Michael Jordan’s mansion in Highland Park, which finally sold in September after being on the market since 2012, originally listed for $29 million and most recently priced at $14.9 million.
Local agents indicated that Mr. Griffin’s “highly visible selloff” is likely to further impact the perception of values across the Chicago luxury market. Condos, in particular, appear to have felt the significant impact of buyers’ safety concerns, leading high-end buildings to slash asking prices.
A particularly telling example detailed in the text involves a condo at the prestigious Four Seasons Hotel Chicago, which was sold for $1.025 million in November, a significant 43 percent drop from the $1.8 million the seller had originally paid for it back in the year 2000.
Jim Letchinger, a Chicago developer, spoke about his latest condo project, One Chicago, where roughly 35 percent of the building’s 77 units remained unsold after five years of sales. He recounted the initial excitement: “It started with a bang. We had 19 or 20 sales in the first four or five weeks.”
However, the momentum stalled: “Then, we didn’t see anybody for a year and a half. There was a point in time where we didn’t know if we’d ever sell another condo.”
Prices for some of these units were cut by 20 percent, and some were even rented out to attract occupancy. Letchinger felt that Griffin “overpaid” for his penthouse units initially, and it was “unlikely he would have found anybody to pay him anything close to what he spent.”
Jennifer Ames of Engel & Völkers Chicago concurred with the assessment that Griffin likely overpaid for his Chicago holdings and also provided valuable insights into how Chicago’s luxury market dimensions compare to others.
Ames highlighted that Chicago doesn’t attract the international buyers that have helped build condo markets in cities like New York or Miami. She suggested that Midwest buyers tend to be more conservative with their spending, observing: “Our market is not flashy. It’s not like Beverly Hills.”
Ames speculated that Griffin ‘just wanted to sell,’ adding that ‘quite frankly, if he sold for $5 million or $10 million less or more, it doesn’t make any difference to him,’ suggesting a motive beyond pure financial gain.
It’s worth noting that Griffin isn’t the only affluent individual divesting Chicago properties; other wealthy individuals have also been selling their Chicago real estate holdings, as indicated by a Bloomberg report in March which highlighted similar sales of luxury properties at a loss by other affluent homeowners this year.
This trend is reportedly driven partly by the city’s “hefty taxes” and “high crime rates,” prompting some of Chicago’s richest residents to relocate to other cities, including Miami and New York.
Ken Griffin didn’t mince words about his reasons, stating, ‘The decline in value of Chicago real estate is representative of the failed political leadership in Illinois which is a loss ultimately borne by the people of the state.’
This connects directly to his stated reasons for moving Citadel from Chicago to Miami in 2022. The alarming crime rates were cited as a major factor in this corporate relocation decision.
Griffin further illuminated his concerns with a specific anecdote, recounting how one of his colleagues was tragically robbed at gunpoint while simply getting a coffee, and Citadel’s departure wasn’t an isolated incident, as other major corporations like Boeing, Caterpillar, and Tyson Foods also relocated from Chicago around the same period, according to the WSJ.
