Condo deconversion craze continues with 2 new deals in the works in Gold Coast

Developers ESG Kullen and Strategic Properties could spent $150M turning two condo buildings back into apartments
June 26, 2019 09:00AM

From left: 1250 North LaSalle, ESG Kullen President Eric Granowsky and 2 East Oak

From left: 1250 North LaSalle, ESG Kullen President Eric Granowsky and 2 East Oak

The condo deconversion craze continues in Chicago, with developers looking to spend a total of more than $150 million turning two Gold Coast condo buildings into rentals.

New Jersey-based Strategic Properties of North America has a deal to pay $60 million for a 202-unit condo building at 1250 North LaSalle Drive, according to Crain’s. New York-based ESG Kullen, meanwhile, is offering to pay $92 million for 309 condos at 2 East Oak Street.

Illinois law requires at least 75 percent of building ownership to approve a deconversion. Owners at 1250 North LaSalle already approved the sale, and the deal is expected to close next month, according to Crain’s. The results of a vote to sell 2 East Oak will be released this week.

The proposals show the condo deconversion trend is not abating, as the demand for rental units continues to surge alongside climbing rents.

ESG Kullen has been active on the deconversion front, paying $112 million for a 391-unit building on North Lake Shore Drive in what is the priciest such deal in city history. The firm also recently paid $38 million for 250 condo units at 1140 North LaSalle Drive.

Earlier this year, Strategic Properties landed a $33 million refinancing of a former Lincoln Park condo building it deconverted in 2016. [Crain’s] — Joe Ward