Sal Becovic is gearing up to convert a North Side condominium tower back into its original state as rental units.
His firm, Becovic Management Group, paid nearly $32 million for the 28-story, 154-unit Granville Tower at 6166 North Sheridan Road in Edgewater, Crain’s reported. The deal comes less than a week after the condo owners voted to approve the sale, and would expand the Becovic portfolio to more than 2,500 apartment units in Chicago. Sal Becovic’s father, Husein, began assembling area rentals 50 years ago.
Chicago brokerage Kiser Group arranged the transaction. Becovic paid about $8 million less than the brokerage estimated the property might fetch when it hit the market in February. The sale was passed with 86 percent of owners approving it, squeaking past the 85 percent threshold required for an entire condo building to trade hands in a bulk deal.
The buyer plans to spend $4.6 million on capital improvements, including new amenities and hallway renovations. Becovic hopes to secure a loan to cover 75 percent of its costs. The deal is expected to close in September, but it’s possible that it gets pushed back or falls through if Becovic fails to secure adequate funds.
If the deal goes through, some owners will move out, while others will continue to live there as renters. For residents who don’t wish to move out right away, Becovic has offered 12 months of below market rents. He’s offering seniors a discount of another 15 percent from those rates.
Becovic’s plan to return the site back to apartments — the tower was originally built as rentals and was converted into condos — extends the condo deconversion craze in Chicago. Such conversions became popular last decade following the condo crash, and they’ve picked up even more steam in recent years as the city’s multifamily sector started to boom.
Clarification: This story was updated to state that the Granville Tower was shopped by Kiser Group without a specific asking price, and to clarify the terms of rent discounts offered to sellers who remain in units after the condo deconversion.
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However, condo deconversions are difficult to pull off, especially with high interest rates and a tight lending climate. Aside from getting a supermajority of condo owners to agree to a sale, expensive repairs are often needed, and such transactions are inherently complicated.
In June, Strategic Properties’ $190 million deal to convert the Ontario Place condos into apartments fell apart after years of attempts to close the deal.
—Quinn Donoghue