Chicago’s most complex — and most expensive — condo deconversion deal hits another snag

The $112M planned for the 391-unit building was to be the highest amount for a condo deconversion ever paid in Chicago

August 15, 2019 04:00 PM

1400 North Lake Shore Drive and ESG Kullen’s Eric Granowsky (Credit: Gold Coast Realty and Multifamily Forum)

What would be Chicago’s largest condo deconversion deal ever appears to have hit another roadblock.

After saying in January that it had secured financing for the $112 million acquisition of a 391-unit condominium building in the Gold Coast, ESG Kullen is now telling condo owners a different story, according to Crain’s.

A snag in securing equity partners for the complex at 1400 North Lake Shore Drive has led the New York firm to miss four closing dates, and is likely to miss a fifth later this month, according to the report.

If it did close at that price, the deal would represent the highest amount paid on a condo deconversion. It has become a popular trend in Chicago real estate thanks to a still-hot multifamily rental market and a cooling housing market that has left the condo sector hit particularly hard.

ESG sought to buy the building last summer, but its initial offer was rejected by the unit owners. The firm’s next bid, at $112 million, was accepted last August, but ESG called off the sale in December, saying it had yet to secure a financing package.

A month later, ESG said it has secured the funding and the deal was back on. Now, the firm said in a letter to condo owners that it hasn’t been able to “confirm all details” with its equity partners, according to the Crain’s report. ESG indicated it will likely not meet an Aug. 28 closing date.

Meanwhile, ESG — which has 3,500 rental units — is moving forward with another condo deconversion. The firm has a deal to pay $92 million for another Gold Coast condo high-rise. [Crain’s] — Joe Ward

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