Sign of the Times: Developers Deconverting Condos Back to Apartments in Chicago
"The condominium deconversion trend is gaining momentum in Chicago, where three more big high-rises are flirting with plans to go rental," reports Alby Gallun.
According to Gallun, the deconversions are reversing the condo conversion trend that transformed the city in the 1970s and 1980s. Times have changed, however:
Today, amid a hot apartment market, developers are willing to take on the often messy task of re-assembling condo buildings, wagering they'll be worth more as apartments. In the most recent big deal, Strategic Properties of North America completed a $51.5 million acquisition of Bel Harbour, a 30-story, 207-unit high-rise overlooking Belmont Harbor in Lakeview.
The article also devotes attention to the process developers use to deconvert condos. An Illinois state law allows developers to "take over all the condos in a building in one deal only if owners of 75 percent of the units in a property approve the sale." Developers often pay a premium to buy that support, offering a financial incentive for condo owners to approve the sale.
Meanwhile, a few fairly large condo deconversions are in the works. Developer Golub has offered $60 million to buy and deconvert Century Tower, a 28-story building in the Loop.