CHICAGOBUSINESS.COM I MAY 27, 2024
CRAIN’S
REDEFINING AFFORDABLE HOUSING Chicago’s real estate community is trying several new approaches in the effort to make homeownership possible for working families | PAGE 11
Sprout Social stock falls hard
Sellers struggling with downtown condo slump
The software company has stumbled in its move to chase bigger customers
Meanwhile, luxury-priced homes are in demand in other neighborhoods and in the suburbs By Dennis Rodkin
The owners of a Pearson Street condo put it on the market in January with an irritating reality baked into the price: They weren’t going to profit on it. The asking price they started with in January, $1.75 million, is the same number they paid five years earlier for the threebedroom, 27th-floor condo a block from Lake Michigan. The unit sold May 9 for $1.55 million, a loss of a little more than 11%.
The Pearson Street sellers are among the latest of many who have “accepted the state of the market downtown,” said Brian Loomis, the Jameson Sotheby’s International Realty agent who represented the condo. “It’s a very frustrating market for sellers.” It’s a long-running frustration at this point, four years into the reversal that COVID sparked and crime fueled, putting a deep chill into a sector that used to be one of the hottest parts of the
Carlos Mejia working on the Kinexx factory floor in Chicago on May 2 | BETH ROONEY
By John Pletz
A penthouse in this building on Delaware Place in the Gold Coast is priced at 5% off what the sellers paid for it nearly a decade ago. | AMERICORP
Chicago-area real estate market. Perhaps most grating is the fact that “anywhere else you go, Wicker, West Town, the suburbs, the luxury market is back and it’s crazy,” said Matt Laricy, an See CONDOS on Page 23
Software maker Sprout Social’s move upmarket to bigger customers is proving to be a much tougher climb than anticipated. Its stock price has fallen below $30 per share for the first time since just after the company went public four years ago. Shares are trading around $28 apiece, down from $48.15 on May 2, before Sprout Social unexpectedly reduced its revenue growth forecast for the year to 22% from 28%. “This is about growth,” says Rob Oliver, an analyst at Robert
W. Baird, who downgraded the stock to neutral. “Small and midcap investors are growth investors. Growth expectations are considerably lower than they were before. When you gear your valuation toward growth and it changes, you see disproportionate changes in the stock. “They’re pivoting to a company serving large companies, which isn’t easy,” he adds. “(Wall) Street had gotten comfortable with that and was taken by surprise things were not going as well as expected.”
VOL. 47, NO. 21 l COPYRIGHT 2024 CRAIN COMMUNICATIONS INC. l ALL RIGHTS RESERVED
TECHNOLOGY U of I tech founder came home from Silicon Valley to build a company in Fulton Market. PAGE 3
POLITICS Bears stadium proposal: Chicago won’t give up money it’s owed. PAGE 4
See SPROUT on Page 23