Hidden behind a brick wall 17 miles north of downtown Chicago, the most expensive house in Illinois history is being constructed on an elite stretch of lakefront land in Winnetka.
The home belongs to Justin Ishbia, a private equity executive and co-owner of the NBA’s Phoenix Suns, who’s also in line to become the majority owner of the MLB’s Chicago White Sox. The 68,000-square-foot home is expected to cost $43.7 million to build, on top of the $33.7 million he paid buying three adjacent properties for the compound.
To develop the sprawling estate, Ishbia had to controversially engineer the shoreline. He stripped away greenery and leveled steep bluffs to make for a smooth walk to the Lake Michigan waters.
Ishbia, the billionaire founding principal of Chicago-based Shore Capital Partners, is in a group of extremely high-net-worth Americans whose real estate holdings are changing the tenor of residential real estate across the country. His brother, Mat Ishbia, is head of mortgage giant United Wholesale, majority owner of the Suns, and in 2023 began building Michigan’s largest home of approximately 60,000 square feet outside Detroit.
While this group has already taken root in hubs like Palm Beach and New York City’s Billionaires’ Row, Justin Ishbia’s estate is so far the most visible symbol in the sleepier Chicago area. But he isn’t an outlier. Dozens of new-construction homes have popped up along the North Shore’s exclusive lakefront in the last decade as the ultra wealthy of the Windy City, and some transplants, have looked to build their dream estates.
The North Shore has always been a hot market, but the competition has exploded since the pandemic, as wealthy buyers sought space, and relief from crime concerns, in the suburbs. The two most expensive homes ever sold in Illinois were both in Winnetka and fetched more than $30 million apiece last year, reaching price points rarely seen in the Midwest.
For the market to expand, buyers have to demolish old homes, which are not up to snuff for this tier of buyers, despite prime locations.
“It’s extremely hard to find land to build on,” Dena Fox, a real estate agent with the Rubenstein Fox Team at Baird & Warner, said of the increase in teardowns on the shore. “You’re limited.”
One way to measure the boom is by the level of new construction. In the last decade, at least $200 million has been spent on new lakefront home construction on the North Shore — a desirable stretch that starts just outside Chicago in Evanston and extends to Lake Bluff, about 35 miles from downtown, according to permits obtained by The Real Deal. The true number is likely much higher because records from some northern waterfront suburbs are incomplete.
Assessors’ information in Cook and Lake counties shows a clear increase in new home construction on the shore, with 52 homes on the lakefront built since 2016, compared to 43 in the 10 years before that. That number doesn’t include ongoing projects, like Ishbia’s.
“The towns have been transformed. They were kind of sleepy a while back.”
Along with the soaring market for new builds, average home prices have also risen on the North Shore. They’ve increased by more than 50 percent in Winnetka since 2020, according to Zillow, and other North Shore towns have notched similar growth.
The evolution has brought a new level of luxury to generally quiet and understated towns, said Megan Mawicke, a Winnetka native and head of Jameson Sotheby’s International Realty’s local office. At the Plaza del Lago in Wilmette, high-end brands like Hermès and James Perse have struck retail leases to serve the new clientele with city sensibilities.
“The last seven years, the towns have been transformed,” Mawicke said. “They were kind of sleepy a while back. We used to go downtown a lot, and now you don’t have to as much.”
As wealthier buyers stream into the North Shore, backlash from longtime community members is mounting, with local residents in pricey inland homes airing grievances about pricier ones being built on the lake, as well as a loss of unique historic homes in the region and actual changes to the landscape, like Ishbia’s bluff-leveling.
But expressing an opinion one way or another risks real political and reputational fallout within certain circles running Chicagoland’s ritziest social networks, markets and local governments.
Just ask Vijay Kotte, the CEO of GoHealth who once scolded Winnetka’s Village Board, saying he wouldn’t have spent $12.3 million on his lakefront property if he were aware new limitations on development would soon be imposed in response to Ishbia’s project.
Even without being able to pursue what may have initially been a dream design, Kotte and his wife Shiraz, a pharmaceutical executive, pushed forward with demolition of the iconic Spanish revival home and are making progress on a new $10 million construction in its place.
Designing lakefront luxury
Behind many of the top new developments on the lakefront are a handful of contractors and architects that have the know-how to cater to the top clients. Architecture firms like Northworks, Morgante Wilson and Michael Hershenson have provided the design work for many of the new luxury lakefront homes.
To design a multimillion-dollar waterfront home takes unique knowledge of the environment and the lakefront, said Jena Radnay, an @properties Christie’s International Real Estate agent who brokered the two deals over $30 million and was involved in nearly every top-end lakefront home sale in Winnetka last year.
Outdoor spaces usually include lush landscaping and gardens, glass-paned sliding doors to transition from indoors to large outdoor patios, pools and staircases to the beach. The outdoor design is one of the most important aspects of new lakefront homes, Radnay said.
“If you don’t pick the right architect, one who doesn’t know how to work with environmental factors like winds, rains, salt, you can design something that doesn’t fit the climate,” she said.
Across the varied designs, some features are consistent, agents said. Clients want soaring bay windows, high ceilings and wide-open floor plans with large family rooms and kitchens.
Buyers generally want to make a deal to be on board early enough to design their own homes with personal characters, Fox said, though developers occasionally build on spec.
“People are trying to find ways to distinguish, so there’s not this development, subdivision type of feel,” Fox said. “They don’t actually necessarily want it to look brand new. They want it to have character.”
Inside the homes, wellness amenities are some of the most sought after and elaborate spaces of new builds. New homes are being built with indoor pools, spas, basketball courts and plunge pools. The most popular amenity? Golf simulators, said Paige Dooley, another Compass agent in Winnetka who sells luxury homes on the lakefront.
“The whole idea of wellness right now is also permeating the luxury market,” Dooley said. “To be near water has a certain magnetism. But also to be able to have a serene spa or a workout room, or a yoga studio.”
Lakefront homeowners in Winnetka and Wilmette are the clear leaders in construction costs for their custom homes in recent years.
In addition to Ishbia’s mansion, Winnetka is the site of the Kottes’ $10 million construction at 445 Sheridan Road. Still under construction, the home is planned at 28,000 square feet, according to permit documents. The home at 657 Sheridan, approved in 2016, cost more than $7 million. Details about the owner aren’t publicly available.
And in Wilmette, Chicago Cubs Chairman Tom Ricketts, whose family owns the team, spent more than $11 million to build his home on Michigan Avenue, which the Cook County Assessor’s website estimates to be more than 10,000 square feet. At 500 Sheridan, intellectual property lawyer Frank Nicholas undertook a $9 million construction project on a new home in 2015. The house is estimated to be around 13,400 square feet.
Like Ishbia, it’s also become more common for people to assemble multiple lakefront lots for their new homes, giving them more breathing room from setback requirements and additional privacy from neighbors. Eric Lefkofsky, co-founder of Groupon, bought the lakefront home on the lot next to his for $8.3 million last year.
“It’s their opportunity to create their personal style and their personal monument to themselves,” said Nancy Nugent, a Jameson Sotheby’s agent.
Clashing with historic preservation
The desires of luxury homeowners — for bigger, newer and better homes — often clash with the goals of preservationists and environmentalists who see the demolition of old houses as a threat to the region’s historic charm.
Ishbia’s project to dig out the steep bluffs on his property sparked a backlash in Winnetka, prompting the village government to set strict limits on what type of work homeowners can do on the bluffs. To build the new mansion at 445 Sheridan, the Kottes tore down the 1912-built Clement Stone mansion after a contentious preservation battle.
Although there’s energy among some community members to keep historic homes, Winnetka’s ordinance is not set up to stop teardowns and can only delay them, said Laura Good, a real estate agent with @properties who specializes in historic homes and served on the Winnetka Historic Preservation Commission until last year, when she resigned after the commission failed to stop the teardown of 445 Sheridan.
“Our ordinance has no teeth in it and many people know that,” Good said. “And that’s why in this community you see so many teardowns going on.”
But the buyers often say older homes can’t accommodate the amenities and lifestyle preferences they can achieve with newer homes, making preservation a difficult sell for the ultra-wealthy buyers shopping for lakefront real estate.
A 1959 mid-century modern home designed by architecture firm Keck & Keck sold for $6.4 million last year in Kenilworth. The seller’s agent said there were people interested in preserving the house, but it would likely end up as a teardown because of its poor structural condition.
There are buyers, Good said, who have the means and passion to preserve lakefront homes, but they’re often bought up before historic homebuyers know they’re on the market.
One example is former Motorola CEO Ron Garriques and his wife, Karena, who restored their 1914-built Italianate villa in Lake Forest in 2016. Village records show the construction cost an estimated $2 million. That included completely rebuilding an original wing of the house that was previously demolished, including sourcing furniture and artwork that was owned by the home’s original owners, Crain’s Chicago Business reported. The home was listed for sale in March 2024 privately for just under $13 million.
The renovation also added some modern conveniences: The homeowners lowered the basement in order to fit a basketball court and ice rink, Crain’s reported.
Looking ahead, agents said they expect the luxury premium on the lakefront to have staying power. Among the new lakefront constructions, there are several homes that would easily fetch $20 million or more in a sale, Radnay said.
“There’s nowhere else in the U.S. you can get so much,” Radnay said. “To be 18 miles from the city, to be two hours down to Florida in a flight from O’Hare. It’s got everything. So I think people have really started to value Midwestern living, and more importantly, the value of the North Shore.”