Canyon Ranch to Build Spa Condo/Hotel Tower in Chicago

Would you like a shiatsu massage with your new condo? How about a bone-density test?

Arizona's Canyon Ranch, regarded as the most glittering brand in the $10 billion spa industry, has branched into real estate, and on Wednesday will roll out a marketing campaign for the 67-story condo-hotel at Huron and Rush Streets that will bear its name.

Joining an increasingly crowded field in the city's luxury high-rise market, Canyon Ranch Living-Chicago is a $650 million bet that well-heeled condo buyers will be drawn to an unusual rendition of that eternal real estate promise, "lifestyle."

Specifically, it's the "wellness lifestyle" on which Canyon Ranch has made its name, and when the first occupants move into the Chicago outpost in 2011, they'll not only have access to such typical spa amenities as a fitness center, massages and yoga, but also to medical care.

"We will have a physician on site," said company President Kevin Kelly. The doctor -- perhaps two, depending on demand -- will be joined by nurses, nutritionists and exercise physiologists on the staff, he said.

Though not intended as primary-care providers for the building's residents, the medical staff will offer physical exams and coordinate exercise and other health-related programs, Kelly said.

They will mirror the medical services available at the 18-year-old, privately held spa in Tucson, Ariz. The company has a combined staff of 21 physicians and PhDs in health-related fields there and at a sister facility in Lennox, Mass. It also collaborates on some programs with the Cleveland Clinic.

Canyon Ranch is hardly alone in believing that spa visitors want to take home that lifestyle. Miraval, Life in Balance, is a Canyon Ranch competitor in Tucson that's undertaking a 365-unit condo conversion on the Upper East Side of Manhattan.

Called Miraval Living, the condos' spa-wellness services will include a "personal adviser" to coordinate residents' appointments for more than 100 wellness-oriented amenities from golf conditioning to sexuality seminars, said spokeswoman Amanda Miller. And it's scouting other cities, including Chicago.

The International Spa Association, a trade group in Lexington, Ky., said a "spa-residential real estate boom" took off early last year, with at least a dozen projects in the works around the country.

There's even one in Wisconsin Dells, Wis. -- Sundara Inn & Spa opened last year, offering 12 condos and a spa that provides "purifying bath rituals" and organic spa cuisine, among other services.

The trade group doesn't track residential spa growth separately, but soon will, according to an association spokesman. It estimates that revenue for the approximately 14,000 spas of all types -- day spas, vacation resorts, mineral springs, etc. -- is growing 18 percent a year. Revenue for medical spas, the smallest niche in the industry, has grown from $134 million in 2004 to $469 million in 2006.

In Chicago, wellness care will be at the fingertips of the purchasers of Canyon Ranch's 257 condos and the 126 hotel suites. Condo prices range from $810,000 to $4 million and beyond; hotel suites range from $725,000 to $950,000, according to the company. Various health services are extra.

The building's owner and developer, Related Midwest, said 10 percent of the units were sold in the last two weeks, before active marketing began.

Kelly doesn't expect Chicagoans to blink at the costs because the promise of "wellness" is included. "We will work as a team and help people tailor a different life," he said.

Wellness, Kelly said, has emerged "as a new value system in the United States."

Trends forecaster Gerald Celente agrees, saying health awareness is poised to become the new "green."

"The market for 'wellness' is huge," said Celente, who heads the Trends Research Institute in Rhinebeck, N.Y. Led by aging Baby Boomers armed with cash, a large segment of the population is ready at least to pay lip service to living more healthfully, he said.

"The Boomers are previewing what's going to happen to them," he said. "They're previewing their mortality in the illness and death of their parents."

This isn't Canyon Ranch's first foray into residential real estate: For about 10 years, it has been selling homes adjoining its Arizona and Massachusetts spas. And a Canyon Ranch high-rise comparable to Chicago's is under construction in Miami, with the first occupancies expected this fall, Kelly said.

All this, of course, arrives just as the general real estate market is sagging. Plans for a third Canyon Ranch high-rise fell apart last year, when the market slowed in Washington, D.C. At the same time, ultra-luxe high-rises have begun to proliferate in downtown Chicago.

"It's a crowded market," said Gail Lissner, vice president of Appraisal Research Counselors in Chicago, which tracks city condos. "There are many choices for these buyers."

She said about 1,700 units priced from $700 a square foot are under development in downtown Chicago, compared with the $375 to $400 a square foot average there, she said. A Canyon Ranch spokesman said its condos will average $900 to $1,100 a square foot.

Lissner said the sales pace in that upper bracket has been surprisingly steady.

"About 1,000 of those are under contract, and that leaves 700 units available," she said. "Of course, this doesn't include the Spire, which, when it begins marketing, would add more than 1,200 units."

Marketing is expected to begin in September.

Chicago is the No. 2 source of the 35,000 individuals who visit the Tucson Canyon Ranch each year, giving its brand an advantage.

"They definitely will have name recognition here," Lissner said.

Rubloff Residential Properties President James Kinney, whose firm is marketing a competing building, the Residences at the Ritz-Carlton, agreed that health benefits could be the difference.

However, he noted, the timing, especially in waiting for a "wellness lifestyle" that won't be accessible for four years, is difficult.

"I think if you're 60 years old, you'd want that spa right now."\

By Mary Umberger, Chicago Tribune, June 27, 2007