Apartment-to-Condo Conversions Creep Back in Chicago

With Chicago’s condo inventory scraping historic lows, a handful of small apartment buildings are quietly flipping to for-sale units, finding eager buyers.

A few examples have popped up in recent months, such as in West Lincoln Park, where a 12-unit building on Clybourn Avenue that operated as rentals hit the market as condos in October. Each priced between $600,000 and $950,000, all 12 units quickly found buyers, according to Crain’s. A month later, a six-unit building on Kenmore Avenue in Uptown’s Buena Park followed suit, with each unit listing from roughly $708,000 to $879,000. Those six units are now under contract.

More recently an 18-unit building at 434 West Melrose Street in Lakeview became an apartment-to-condo conversion candidate, where the first batch of condos is set to launch next week. Prices range from $900,000 for roughly 1,575-square-foot two-bedrooms, to as high as $2.3 million for a 4,000-square-foot, four-bedroom unit with three terraces and indoor parking.

Tim Sheahan of Compass, who is marketing all three buildings, told the outlet that each property had a different owner, but the calculus was similar.

“We figured out we can bring some inventory to the market this way,” he said, adding that demand for updated, move-in-ready units made the numbers work.

These aren’t vintage rehabs, however. All three buildings were completed between 2017 and 2019, meaning modern floor plans, they all came with newer systems and limited capital improvements needed to reposition the units for sale, according to the publication. In some cases, developers refreshed finishes — swapping in new cabinetry and refinishing darker hardwood floors to lighter white oak — to match current buyer tastes.

The timing aligns with a supply crunch. In January, condo listings citywide were down 28 percent from a year earlier, according to the Chicago Association of Realtors, representing just 1.5 months of inventory. A balanced market typically carries four to six months. Agents say competition is fierce, with as many as 10 to 15 buyers chasing each listing in desirable neighborhoods.

The move echoes a larger trend from the mid-2010s, when small-scale condo deconversions snowballed into a wave of apartment takeovers as investors capitalized on rental demand. So far, the reverse shift appears measured. But early signs exist of traction: At a historic Lake Shore Drive building that relaunched as condos in 2024 after operating as rentals, about 89 of 198 units have sold, according to public records.

On Clybourn, five sales have closed, with the rest pending. On Kenmore, three have closed and the remainder are expected to finalize shortly. Not all Melrose units will be released at once, as existing tenants are protected by city ordinances that provide relocation time.

— Eric Weilbacher