Wednesday, December 14, 2016

Lake View, Lincoln Park whole condo buildings bought to "go rental"

You may be able to rent newly renovated high-rise apartments steps from Belmont Harbor soon (All photos Eric Rojas, Broker, Kale Realty)
Our office chatted about a Crain's story today reporting the possible "de-conversion" of 420 West Belmont in East Lake View.  The 50 year old high-rise condo building may have been sold to investors that will convert the condos back to rental units. Other than the number of units involved (207) a de-conversion to rentals is not unusual in this market.  75% of the condo owners must vote to sell the building as a whole with proceeds paid out as a percentage of ownership.

Crain's pointed out in December 2625 N Clark Street was purchased for $35 million to convert to rental (subscription required). 133 units were sold with an average price of $263,000 a unit according to their report and $6 million will be invested for renovations.  The last MLS listed property to sell on the market at 2625 N Clark was a one bedroom condo Unit 1108 for $172,000 cash closed on January 29th.  That's a nice return for about 10 months!  Two other one bedroom units sold near the end of 2015 for an average of $160,000. They stood to sell for $100K net profit over individual sale market rates if they held on one year.

Lincoln Centre Condos shown here in 2015 were purchased and torn down this year to build rental apartments (all photos Eric Rojas, Broker, Kale Realty
We've blogged about another dramatic "de-conversions" in Lincoln Park.  The infamous Lincoln Centre Condos  (30 units and retail space) shown above were purchased for over $11 million dollars in 2015. The building has been torn down to build 191 new rental apartment units.

The entire condo building at 555 West Arlington in Lincoln Park was "sold to a developer for land value".
Another recent Lincoln Park de-conversion I've come across is 555 West Arlington in the gorgeous Deming-Arlington Historic District. The 36 unit 1960s condo building with unfortunate architecture was "sold to a developer" for "land value" earlier this year. MLS and Recorder of Deeds records show last unit sales to the developer in the mid $300s for one bedroom condos.  $100-$200K above the market rate prices for individual market rate condos in the building.

 I do not have the sales price of 555 West Arlington at this time but a mortgage was taken out for almost $17,000,000 per Cook County Recorder of Deeds records.  A $7,000 electrical wiring permit and $50,000 alteration permit was issued for the building which suggests they will refurbish and rent out the units. 

We have one client and their condo board in North Center who have discussed selling their whole building so they may receive much higher sales prices than their individual condos would achieve. It is on the table for this spring.

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