Even in Chicago’s hot multifamily market, some buyers are scoring discounts.
In a deal that signals caution to condo deconversion specialists, Laramar Group bought the Wave Lakeview apartments from Strategic Properties of North America for $57 million. The seller last refinanced the property for $62 million in 2019, public records show. .
SPNA converted the nearly 60-year-old building from condos to apartments in 2017 and took out a $46 million loan from Ladder Capital to help fund the deconversion, according to public records.
SPNA, based in Lakewood, New Jersey and Skokie, and led by Saul Kupperwasser and Yitzy Klor, has had a consistent presence in downtown Chicago real estate for more than a decade. Many of the company’s biggest deals in the city have been condo deconversions.
It’s unclear how much total capital SPNA put into the deconversion of the Wave Lakeview at 420 West Belmont, or if the company paid down the principal on its latest $62 million note from MF1 before selling the property to Laramar this month.
For Chicago-based Laramar, led by CEO Jeffrey Elowe, the discounted purchase could spell a win. Chicago’s multifamily market has been heating up throughout this year, topping national rent growth charts.
Wave Lakeview, in the upscale northside neighborhood of Lakeview, consists of 88 studios, 98 one-bedroom/one-bathroom apartments, and 20 two-bedroom/one-bathroom units. It also includes ground-floor retail space and an indoor pool.
Still, the building has faced its share of challenges. Loan records indicate Wave Lakeview struggled to generate income for SPNA while it owned and operated it.
When SPNA refinanced the 30-story, 207-unit property with MF1 in 2019, the lender bundled the $62 million debt into a collateralized loan obligation package, public records show. Doing so made some of the loan’s details public.
The loan was watchlisted by its servicer in May 2021 for having a debt-to-service coverage ratio under 1, meaning the building’s income was not covering its operating costs, according to commercial debt tracker MorningStar Credit.
It was later removed from the watchlist in August 2021 when SPNA secured an extension on the loan.
The current health of the loan is harder to determine because MF1 appears to have taken the debt off the public market at some point in 2022.
Representatives of MF1 and SPNA did not respond to requests for comment. A representative of Laramar declined to comment.
The sale follows SPNA’s attempts and failures to initiate two new condo deconversion deals in Chicago.
The company bought dozens of condos at the 467-unit Ontario Place in River North, but after three years of negotiations, failed to close a $190 million purchase of the remaining units. The deal imploded in June 2023 when SPNA failed to put up $700,000 as a show of good faith to the remaining sellers.
In 2024, SPNA fumbled a second condo deconversion deal at the building at 200 North Dearborn. The condo board voted to terminate an agreement with SPNA to sell the remaining units for $90 million, after the company failed repeatedly to secure the financing needed to close the deal.
SPNA’s sale of the Wave is likely part of a broader strategy to sell off existing properties.
In October, the company also listed the K Square Apartments in Lincoln Park. SPNA converted the 22-story, 268-unit property from condos to rentals in 2018, and listed the building for sale in 2023 with CBRE, before eventually taking it off the market. It is now listed with Berkadia brokers Nick Harris, Pete Evans and Richard Evans.