Chicago Launches Loop Office-to-Residential Conversions

Construction began on Chicago’s campaign of subsidized office-to-residential conversions in the Loop, with foreign family office Campari Group and local developer R2 leading the way.

Officials and the co-developers launched work on the first of at least five proposals that could bring more than 1,400 apartments to the heart of the city while replacing outdated offices in the process.

Campari and R2 are deploying $64 million into turning half of the 14 floors at 79 West Monroe Street into 117 apartments, with 30 percent of them set to be designated for households making an average of 60 percent of the area’s median income, in exchange for $28 million in tax increment financing from the city for the project.

The suburban office market also continues to wade through significant distress.

Lender Sound Point Capital this month filed a foreclosure that threatens to sink a $20 million Deerfield office deal it made with landlord Stanton Road Partners, which also owns a Michigan Avenue office building in the Loop.

But legal trouble isn’t limited to the office market. In Bronzeville — a South Side neighborhood that’s been the subject of much real estate hype in recent years — developer Jamie Nahon and his contractor Green Day are fighting about a struggling opportunity zone project that has brought over 20 townhomes to market that are now mostly sitting empty. Allegations of cost overruns, skipped labor bills, shoddy work and poor budgeting are flying back and forth.

In the Gold Coast luxury housing scene, the founder of grocery chain Pete’s Fresh Market, Jimmy Dremonas, is trying again to sell his mansion at 915 North Dearborn Street that he reportedly poured $7 million into restoring. Millie Rosenbloom of Baird & Warner has the listing, which asks $18.5 million.

Elsewhere in Chicagoland, megalandlord Brookfield Properties got permission from Northbrook officials to build apartments on the site of the struggling Northbrook Mall before overhauling the retail segment of the property.