Edgewater condo owners seek $40M deconversion

Condo owners in an Edgewater tower positioned their property as a target for Chicago’s next big condo deconversion.

The condo board of Granville Tower, the 28-story high-rise tower at 6166 North Sheridan Road, agreed to put the 154-unit property up for sale, Crain’s reported. Chicago brokerage Kiser Group was hired to procure a buyer for the property, which is expected to fetch about $40 million, Kiser’s Andy Friedman said.

Condo deconversions became popular a few years ago as apartment values started to rise, while the condo market softened. Deconversions occur when an investor buys all units in a condo building in a bulk sale and turns it into a rental property.

Condo owners who don’t want to sell can become a problem for developers wanting to transform the property into apartments. A bulk sale often nets condo owners more money for their units than they would get in a traditional single-unit sale, making some people more willing to part ways with their homes.

A Chicago city ordinance passed in 2019 requires owners of at least 85 percent of the condo building’s value to agree to a bulk sale before a deconversion can happen. The rule upped the bar from state law, which requires 75 percent.

About half of Granville Tower’s owners live in the condo units and the other half are investors who rent the units out. Investors often support deconversion plans even more than individual owners since they don’t have to move, don’t have as much of an emotional attachment to the units and are only looking at the financial gains and losses of the deal.

Granville Tower’s condo board won’t vote on a sale until Kiser brings it an offer.

Friedman said the tower is an ideal candidate for a condo deconversion because it has such high assessments to fund the property’s association for repairs and other services, which lower resale values of units. They range from $700 to $800 a month for a one-bedroom unit and $1,200 to $1,350 for a two-bedroom.

The assessments are “obnoxiously big,” he told the outlet. “It doesn’t leave much room for a mortgage payment.”