Strategic Properties of North America bought a 268-unit tower for $78 million, making it the most expensive condominium deconversion in the city’s history.
New Jersey-based Strategic Properties closed on the Kennelly Square high-rise at 1749 North Wells Street last week, according to Crain’s.
The deal eclipses Golub & Company’s $60 million deconversion earlier this year of the 292-unit Century Tower at 182 West Lake Street.
Marc Realty Capital still could best Strategic Properties if it’s able to execute its planned purchase of the 449-unit River City complex at 800 South Wells Street. It had been offering $100 million for the building but recently dropped its offer to $89 million.
Strategic Properties now plans a $10 million renovation of the 22-story building, principal Yitzy Klor told Crain’s. That’s in a addition to what it will spend to fix a problem with leaks when it rains. The condo board considered a multimillion-dollar special assessment to pay for those repairs, which helped lead to the deconversion.
Following the renovation, Strategic Properties plans to raise rents an average of 18 percent above the amount existing rental residents are paying, Klor said. Several condo owners had rented out their units.
Kennelly Square is the fourth deconversion in the Chicago area for Strategic Properties, which is among a growing number of investors using the tactic to expand their rental portfolios amid a hot Chicago rental market. [Crain’s] — John O’Brien