Monroe Residential Scoops Distressed River North Office

A small, distressed River North office building is headed for a residential reset, as a local developer leans into Chicago’s growing wave of modest office-to-apartment conversions.

Chicago-based Monroe Residential Partners paid $5.4 million for the four-story, 48,000-square-foot loft-style office building at 401 West Ontario Street, with plans to convert the property into 57 apartments, firm founder Drew Friestedt told Crain’s, which first reported the sale. The sale adds another bite-sized project to downtown’s conversion pipeline, where underused offices are increasingly giving way to housing.

The building, which is roughly half leased, became financially untenable as offices, Friestedt said. It was also the subject of a foreclosure suit filed in 2024.

“The revenue from rent is barely enough to cover your real estate taxes,” Friestedt told the outlet. “The common theme is they don’t work as office buildings anymore, and they’re selling to people who can try to make the building work as residential.”

Monroe is budgeting about $20 million all-in for the project, including the acquisition, and is currently lining up construction financing. The firm aims to break ground in October and complete the conversion roughly a year later.

Plans call for a mix of compact one-bedroom units of about 450 square feet, with starting rents of about $2,300 a month, alongside larger two-bedroom, duplex-style apartments measuring roughly 1,200 square feet and renting for as much as $3,800. The pricing reflects continued strength in downtown apartment demand, even as new supply remains muted.

The project will require zoning relief. While the site’s DX-7 zoning allows residential use above the ground floor, Monroe plans to add ground-floor units, triggering the need for approval from the Zoning Board of Appeals.

Monroe Residential Partners has built a portfolio of mixed-use and residential projects, including developments at 851 West Grand Avenue and 1313 West Randolph Street.

Greenstone Partners broker Jordan Multack represented Monroe in the latest deal, while Frontline Real Estate Partners served as receiver and marketed the property.

The seller was a venture led by Chicago investor Sean Conlon, who bought the building for $6.6 million in 2015. After being hit with a foreclosure suit tied to a 2017 mortgage, the property was marketed through a receivership sale. Conlon told the publication that he ultimately sold the building in full satisfaction of the loan after it failed to make “economic sense” amid high property taxes.

The deal comes as Chicago’s broader development pipeline remains thin. Just three large-scale downtown projects totaling fewer than 600 units are slated to be completed in 2026, according to Integra Realty Resources.

— Eric Weilbacher