Horizon Realty Group Flips Chicago Streeterville Office

Horizon Realty Group cashed out quickly on a planned office-to-residential conversion in Streeterville, selling the century-old Pelouze Building in Streeterville to another local developer with a nearly identical plan.

Horizon sold the seven-story loft building at 230 East Ohio Street last month for $9.75 million to affiliates of Wildwood Investments, according to property records and CoStar data. The sale price is well above the $5.6 million Horizon paid just a year earlier, underscoring the white-hot appetite for multifamily conversions in Chicago, CoStar reported.

The 1917 structure, designed by architect Alfred Alschuler, was once home to the Pelouze Scale & Manufacturing Company and later hosted the office of Ludwig Mies van der Rohe. It even had a brush with pop culture, serving as the exterior backdrop for the 1980s CBS sitcom Mary starring Mary Tyler Moore.

Horizon’s plan to convert the roughly 65,000-square-foot building into 72 apartments was already underway before the sale. The firm had completed interior demolition and relocated remaining office tenants, paving the way for a seamless handoff.

“We finished the prep work,” Horizon COO Jeff Michael told the outlet, declining to elaborate on the decision to sell what would have been the company’s first office-to-resi project.

Wildwood, led by Matt Katsaros, confirmed it will proceed with the residential conversion but offered no further details.

The deal comes as Chicago’s apartment market outperforms the rest of the country. CoStar data shows the region leading the nation in multifamily rent growth, buoyed by limited new supply as rising borrowing and construction costs slowed development. By contrast, rents in Sun Belt cities — after years of breakneck building — have begun to soften.

With construction increasingly difficult to finance, Chicago developers are turning to existing office stock to fill the gap. Adaptive reuse projects are proliferating in the Loop, River North and Streeterville, where aging commercial buildings are being reimagined as housing to meet surging demand.

The Pelouze Building offers both history and opportunity for Wildwood — a character-rich asset in a neighborhood short on new apartments.

— Eric Weilbacher