Marcus & Millichap Says Condo Deconversion Not Dead in Chicago
“Despite talk of a deconversion slowdown, and Chicago’s proposed ordinance to increase the required approval rate to prevent ‘hostile’ deconversions, we believe the trend will continue as long as investor appetite for multifamily remains strong and people prefer to live in apartments,” Stengle says.
CHICAGO—Another Chicago condominium property has opted to “de-convert” back to multifamily.
The four-story, 16-unit building at 4072 N. Sheridan Road here has traded for $4.6 million or $287,500 per unit in a deconversion sale, according to Marcus & Millichap’s regional manager for its Chicago Downtown office David G. Bradley.
Kyle Stengle, SVP of investments in the firm’s Chicago Downtown office, exclusively marketed the property on behalf of the property’s condo owners, arranging 21 tours and procuring six offers. The buyer was Bertsch Properties of Chicago.
“Despite talk of a deconversion slowdown, and Chicago’s proposed ordinance to increase the required approval rate to prevent ‘hostile’ deconversions, we believe the trend will continue as long as investor appetite for multifamily remains strong and people prefer to live in apartments,” Stengle says.
Stengle and his team have listed and brokered more than 10 deconversions and currently have a listing for another at 2641 W. Estes Ave. in Chicago’s West Rogers Park neighborhood.
“Many condo owners welcome deconversion, especially if they are underwater on their unit following the recession, or their building is facing costly repairs that would warrant a special assessment,” Stengle notes. “Barring any issues that arise during underwriting, a bulk sale allows owners to know when and for how much their unit will sell, and at a price that’s often higher than what they could achieve individually.”
In the case of 4072 N. Sheridan, Stengle worked with the condo association for a year before the sale to ensure the building, which was built in 1916 and last renovated in the mid-1990s, was a good candidate for deconversion and educate owners about the process.
All but one of the 16 units have two-bedroom plans that feature kitchens with condo-quality finishes, including stainless steel appliances and granite countertops, and in-unit laundry. The building also has a new roof deck with skyline views. The sale included 14 parking spaces.