Shenouda’s Honore Snags 70 East Lake for $9M

Chicago-based developer Honore Properties is taking the downtown classic building at 70 East Lake Street off the market for $9.2 million.

In February, the 17-story building went up for sale and was marketed for redevelopment from an office building into multifamily residences. Contracts for all businesses that held leases in the hotel except for a pair included landlord termination rights, an easy path to navigate for future entities interested in purchasing the property for conversion. 70 East Lake Street was around 63 percent leased when put on the market. Cushman & Wakefield marketing pitched the property for $10 million to $12 million.

Honore plans to convert the near-century-old building in the Loop’s main tourism area to around 170 apartments, according to Crain’s, who cited the company’s founder, Michael Shenouda. The total square footage is 141,593 square feet, putting the price at a smidge under $65 per square foot.

Pivoting the building into a multifamily facility will run Honore around $40 million, according to the outlet, and the company is targeting a loan of around $30 million from Wintrust Bank to begin construction. Zoning is a nonissue as the building is already zoned for residential use.

Across the Chicagoland area, office space is being repurposed, leading to decreasing office vacancy rates in both downtown and the suburbs for the first time since the pandemic ravaged real estate values globally. In the suburbs, net absorption rate is up, but downtown buyers and owners are still honing in on redevelopment to fill underutilized buildings in key areas. The conversion also stands to chip away at rents, which have gone up amidst a construction pipeline drought.

Honore has been a part of that effort. They’ve already completed office to apartment conversions at 118 South Clinton Street, around a mile away from 70 East Lake Street, as well as at 811 West Evergreen Avenue, according to the outlet.

— Hunter Cooke