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CHICAGO-Developers FIC Development Group and L.J. Sheridan & Co. have dropped prices by more than half at The Garland Building. The two companies recently converted the 260,000-square-foot property at 111 N. Wabash Ave. into office condominiums, which are nearly 75% sold. The 110 units sold thus far have been purchased for more than $200 per square foot, but following the recent price adjustment, similar spaces are being offered for prices starting at $95 per square foot.

“The office condo concept is fairly new in Chicago as compared to other parts of the world and country, so initially the market had some questions as to why people would turn from rental to ownership,” Pat Caruso, president and CEO of L.J. Sheridan, tells GlobeSt.com. “Beyond the price drop, there are wonderful advantages to owning, like building equity, tax advantages, plus after years of paying rent, wouldn’t you have been better off paying a mortgage. We believe these units will appreciate in value, plus you’re not subject to a landlord every few years who might need your space or increase rent.”

Constructed in 1914, the 21-story office building was rental until FIC and L.J. Sheridan purchased it about three years ago and began the property’s conversion, which included installation of new elevators and upgrading of commons areas among other improvements. “We put some capital into the building, but the core of the building was in good shape already,” Caruso says. He would not disclose the purchase price, but said the developers obtained a $25 million mortgage in conjuncture with the building acquisition, which has since been paid off.

“The advantage of a building like this is that it’s professionally managed, and if you’re a small user, you can have someone help you with floors plans, big out construction and such,” Caruso says. “It’s an easy process and we can help them through that, and many users say they couldn’t have done this without that because it would have taken too much time. It’s pretty rare that you can buy in Chicago for your small business.”

Available office condos are being sold in sizes ranging from 275 to 13,400 square feet. Purchasers have included users that formerly rented space in the building, new businesses moving in, as well as investors purchasing the space to rent out to other companies. “It was an office building with primarily medical users, so a lot of existing tenants bought the suites,” Caruso says.

“We’ve certainly seen a slow down, and we’re not immune to that,” Caruso says. “It took us a while to educate lenders about the concept, but now we have banks that understand the concept and still have money to lend for this.” Small Business Administration Loans are also available to qualified buyers, the developers say.

The property is located in the East Loop submarket, and offers views of the lake and Millennium Park. “We’re really the only major office condo in that market, because the other condominiums we compete with are further down on Wacker,” he says. “We see a lot of smaller users and more medical. We have more than 50 different medical disciplines in the building.”

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