Senco Takes on Distressed Office-to-Resi River North Conversion

Bill Senne has already gotten started reimagining LaSalle Street in River North.

Senne, a broker and longtime Chicago developer, plans to transform an office building bought out of distress along LaSalle into residences through his firm Senco Properties.

The company bought the mostly-vacant commercial property at 153-157 West Ohio Street, which is on a corner with LaSalle, from court-appointed receiver Matt Tarshis of Highland Park-based Frontline Realty for $5.25 million in an August sale recorded, property records show.

The five-story, 40,000-square-foot structure was the subject of a foreclosure lawsuit brought by lender Wells Fargo in July 2021 against the building’s previous owner, an affiliate of New Jersey-based Reisman Property Interests, Cook County court records show. The firm’s president, Paul Reisman, was unavailable for comment Monday, a receptionist said.

The property was built in 1906 and renovated in 2005. Reisman bought it for $8.2 million when a $6 million loan was issued in November 2014, according to public records. The loan was scheduled to reach maturity in December 2024, according to credit rating agency DBRS Morningstar.

Now, Senco is proposing to turn the building into 35 residential units with FitzGerald as the architect, according to plans filed with the city and publicized by Alderman Brendan Reilly of the 42nd Ward. The plans already comply with the district’s mixed-use zoning since the developer does not plan to expand the building, though the firm must obtain a special use permit from the Zoning Board of Appeals to allow for residential use on the ground floor, Reilly’s constituent newsletter said. Senco didn’t return a request for comment.

Converting empty office properties into housing has been a hot topic for the pandemic-battered sector, and discounts on distressed properties like this one could provide opportunities for developers. There were 206 office conversions across the nation wrapped up between 2016 and 2021, an average of 34 annually, and such development activity ramped up in 2022, CBRE analysis said. Developers completed about 60 last year, and some 76 are slated for 2023.

That acceleration is happening as downtown Chicago’s office market continues to struggle – vacancy reached a new all-time high of 21.4 percent last quarter, according to a report from CBRE. Even worse is LaSalle Street specifically through the Central Loop, just south of the corner office building at Ohio and LaSalle that Senne’s company plans to reposition as apartments.

The 36 percent vacancy rate for Loop buildings on LaSalle — long considered the city’s financial corridor and a beacon of the Midwest’s economy — pushed Mayor Lori Lightfoot this fall to launch a new real estate development program dubbed “LaSalle Street Reimagined.” She invited proposals from developers to turn struggling office towers into apartments containing affordable housing in exchange for financial incentives from the city to help fund the expensive and difficult projects, and so far has received $1.2 billion-worth of work across multiple high-profile properties, such as AmTrust Real Estate’s 135 South LaSalle.