A slew of River North condo owners are attempting to sell their units after Strategic Properties of North America failed to close a $190 million deal to turn 10 East Ontario Street into rentals, and face the prospect of making much less money than they would have from the bulk deal.
A condo deconversion that had been on the table for years to transition the 51-story, 467-unit Ontario Place building into apartments was killed on June 7, and since then a load of units in the building have come up for sale, several of them owned by investors who thought they’d make well more in a bulk sale to Strategic than they’re seeking for their condos now.
At least 12 units are on the market, with many of the one-bedroom units asking between $309,000 and $320,000. It’s a stark change from a few months ago, when some unit owners felt they were trapped and unable to sell their unit individually while the bulk sale was pending.
Adam Antonucci, a broker with Fulton Grace Realty, is listing one unit in the building. He said part of educating buyers is explaining the condo deconversion process so they understand why so many units are available right now.
Antonucci’s client purchased another investment property, expecting the Ontario Place unit to have been sold to Strategic Properties by now, and listed after the deconversion died.
Strategic also paid a premium for the units it bought in the building prior to making the push to buy the rest of the property, Antonucci said, so he priced his client’s unit at $265,000, which he sees as closer to a fair market value, in hopes it sells quickly.
“I think the deconversion was offering certain owners $300,000, $310,000-plus for their units,” he said. “I see a lot of the other units in the building are marketed at that price, which I don’t particularly think is correct market value. It was a higher market value just to get the deconversion to happen.”
Negotiations for the deal fell apart at the eleventh hour, signaling the end to a three-year saga where the buyer struggled to get financing for the ambitious deconversion.
Strategic, which already owned dozens of apartments in the River North tower, had until 5 p.m. June 6 to put up $700,000 as a show of good faith to the sellers, or the deal was off, people familiar with the deal told The Real Deal at the time.
If executed, the Ontario Place deconversion would have been the priciest condo-to-rentals bulk buyout in the city to date.
Strategic requested multiple extensions and was expected to close back in February. Negotiations for the deconversion began in 2020 and endured many false starts, as the property’s condo association board grew increasingly restless and concerned as to whether the deal would ever materialize.
Since entities with ties to Strategic still own dozens of units within the building, the firm could potentially make another push to convince a critical mass of fellow condo owners to consider a bulk sale in the future, but the firm doesn’t appear to be making any moves on that front currently. A new deconversion deal would require unit owners holding a collective 85 percent of the property’s cumulative value to vote in favor of a bulk sale.
Since the deal fell apart, Strategic has listed the 267-unit K Square apartments in Old Town, a property the firm turned into rentals after a bulk condo buyout it completed in 2018. The listing did not include a price, but the property has an $88 million mortgage with a 2.64 percent interest rate that can be assumed by the buyer.
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