Prolific condo buyout firm Strategic Properties of North America sold off a Gold Coast high rise – one of several financially troubled Chicago apartment buildings it owns – to locally based Beal Properties in a $27 million deal.
The 94-unit multifamily rental building at 1344 North Dearborn Street was also partly owned by Glenview-based investment firm Ravinia Capital Group, which was listed as the seller by a press release announcing the sale Tuesday.
Skokie-based landlord SPNA bought the building as individual condominiums in 2021 for a total purchase price of about $27.3 million before converting it into apartments, according to property records.
It was sold to Bill Silverstein, owner of Beal Properties, for $27 million – a per-unit price of about $287,000, or roughly $388 per square foot. This means SPNA likely sold at a loss, especially considering the cost of its floating interest rate loan on the building that helped erase its profits over the last two years.
Once considered a go-to buyer for condo owners looking to cash out via bulk sales of their buildings that turn them into rentals under one owner, SPNA’s track record has been muddied in the last two years. Since 2023, it has made headlines for two failed condo deconversion deals and has recently faced legal turmoil with condo associations and fellow investors.
At the same time, the company has also been fighting to turn a profit on a handful of multifamily properties saddled with floating-rate debt, including the recently sold Gold Coast building.
The Gold Coast building’s nearly $23 million loan, for example, was on the debt servicer’s watchlist because the property wasn’t generating enough revenue to cover the skyrocketing costs of its debt service as interest rates jumped starting in 2022, according to a December loan servicer report compiled by Morningstar Credit.
The building’s rents were only covering about 67 percent of the debt service cost according to the latest loan data published last year; its debt service increased from $91,000 in July 2022 up to $169,700 in July of 2023, and up again to $181,600 in June of 2024, loan data shows. The loan was originated in 2021 by Argentic Real Estate Finance.
Representatives from SPNA, Beal Properties and Ravinia Capital Group did not respond to requests for comment made Tuesday.
Ralph DePasquale, a managing director of investment sales at Berkadia, led the transaction on behalf of Ravinia Capital Group, according to the press release from Berkadia. The release did not mention SPNA, but its ownership of the building was confirmed through property records.
DePasquale called the building “a unique asset,” saying there are relatively few high-rise rental properties remaining on the Gold Coast.
“You don’t get very many trades of properties like that,” DePasquale said. “And I think it’s a great generational opportunity.”
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The property was built in 1967 but underwent significant renovation and upgrading a few years ago during the deconversion process. The building is now 100 percent apartments and was 95 percent occupied at the time of sale, DePasquale said.
Regarding the building’s future, “I believe (Beal’s) plan is to continue to upgrade units,” DePasquale said. “In fact, they own the property directly across the street, so I think it’s just part of their plan to hold it in their portfolio and continue to upgrade it.”