Mike Shenouda is picking up the pace of his Chicago loft office revamps, with his eye on more conversions to housing in Lincoln Park.
His Chicago-based firm Honore Properties recently paid just under $7 million total for two mostly vacant North Side loft offices across the street from each other, at 811 West Evergreen Street and 1415 North Dayton Avenue. At about $67 per square foot, the prices marked substantial discounts from their previous values.
The transactions accent the dropoff in demand for mid-market loft offices, as commercial real estate tenants pull back on their need for space and consolidate into higher-end properties offering high-end amenities, as physical gathering space is used more frequently amid remote and hybrid work trends.
“It’s a healthy correction for the office market to remove these buildings from the supply pool,” said Mike Cordaro, whose local firm Peerless Development partnered with Honore on the Dayton Street purchase.
Honore — which has entered several office-to-residential conversion projects, including a 72,000-square-foot building at 118 South Clinton Avenue that it bought for $4.8 million earlier this year — is moving forward most immediately at Evergreen Street, Shenouda said.
Honore purchased it for $3.2 million, about $70 per square foot, and plans to turn it into 47 apartments. Transwestern was the seller and took a loss after paying $8 million to buy it in 2016 and taking out a $5 million mortgage for the acquisition. Transwestern didn’t return a request for comment.
On Dayton Avenue, Honore and Peerless paid about $3.5 million for the 60,000-square-foot building on Dayton, forcing seller Greg Sammich to take far less than the eight-figure valuation he once thought the building commanded, according to market sources. A previous mortgage on the property totaled $4.4 million in 2015, Cook County records show. Sammich, who had long owned the property, declined to comment.
Honore and Peerless haven’t solidified their plans for the Dayton property, but it will be considered for a residential conversion, they said.
On Clinton Street, Honore is planning to convert its seven-story building into 70 apartments. Separately, Peerless is also pursuing a ground-up development of 44 apartments at 1880 North Milwaukee Avenue in Bucktown.
CBRE’s Dominic Soltero and Blake Johnson brokered the Evergreen Street sale.
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