If at first you don’t succeed in deconverting a condo building into apartments, try, try again.
After failing to win condo owners’ approval two weeks ago, New York-based ESG Kullen successfully bought the 391-unit tower at 1400 North Lake Shore with an eye toward turning those units into apartments, Crain’s reports.
The deal, at $112 million, will be the biggest condo-to-apartment deconversion in Chicago.
Owners of condos in the Lake Shore Drive building rejected ESG Kullen’s first offer in late July. Under state law, 75 percent of ownership needed to sign off on the sale, but only 74.6 percent did.
The firm secured the deal not by upping its price, but by agreeing to pay some owners a premium for recent renovations to their units.
One condo owner at the Gold Coast tower told Crain’s the deal was a “no-brainer.” That’s because owners will be paid about about $425 per square feet, well above recent sales prices in the building that were closer to $300.
More and more investors have been willing to pay a premium for residential towers in order to take advantage of Chicago’s hot rental market.
Recently, Marc Realty Capital attempted a similar buyout of the 449-unit River City complex, but the deal fell apart after the developer abruptly lowered its offer from $100 million to $89 million. [Crain’s] — Joe Ward