Gold Coast foreclosure sale highlights condo deconversion woes

An apartment building in Chicago’s Gold Coast is on the market after condo deconversion and foreclosure.

Lender CoreVest Finance, a subsidiary of Redwood Trust, is selling The Archer, at 1211 North LaSalle Street, after foreclosing on the Skokie-based landlord, Crain’s reported.

The building is owned by LaSalle Towers Property, and court documents have linked that entity to the prolific condo deconversion firm Strategic Properties of North America.

The 68-unit building, constructed in 1929 and converted from condos to apartments in 2022, was secured by a $26.4 million mortgage during the same period. The mortgage amounted to $388,000 per unit. CoreVest filed for foreclosure in February. The asking price wasn’t listed.

Condo deconversions gained popularity in Chicago as demand for condos dropped off and rents are on the upswing. But it can be a difficult and expensive play.

The situation reflects broader stress in the commercial real estate market, which has hit the office sector hard but is affecting apartment buildings as well. For example, Russland Capital handed back the keys in April to the 188-unit apartment building it developed at 1411 South Michigan Avenue, and CA Ventures was hit with a foreclosure suit in May on an apartment building at 2247 West Lawrence and it’s late paying off a loan for 1900 West Lawrence Avenue in Ravenswood.

Colliers brokers Tyler Hague, Ryan Roegner and Lauren Stoilar are marketing the Archer building as a value-add opportunity, with 65 percent of units partially renovated and 10 percent featuring luxury finishes. Average rents are $2,376 for partially renovated units and $3,229 for fully renovated ones. The property manager is offering concessions of one month free rent, according to the building’s website.

Redwood Trust and the registered agent for LaSalle Towers Property didn’t respond to the outlet’s request for comment. Colliers representatives declined to comment.

The rental market in downtown Chicago has been strong, with Class A apartment rents increasing nearly 2 percent in the first quarter compared to the same period last year, according to appraisal and consulting firm Integra Realty Resources.

— Andrew Terrell

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