In Edgewater, local landlord Becovic Management Group has paid $13.3 million for Shore Manor, a 90-unit condominium building at 5858 N. Sheridan Road, according to CBRE, the brokerage that arranged the sale. In Old Town, LaSalle Towers, a 70-unit condo tower at 1211 N. LaSalle St. has gone up for sale with an asking price of $21 million.
Condo deconversions—in which a single investor buys up all the units in a condo building and turns them into rentals—have been a popular trend in Chicago over the past several years, amid a strong apartment market and lethargic condo market. Condo owners can often receive more money in a bulk sale to a developer than they would in a sale of their unit individually, and apartment values have been so high that developers can afford to pay the higher price and still come out ahead.
CBRE brokers Sam Haddadin and Justin Ross brokered the sale of Shore Manor. Built in 1955 and converted to condos in 1977, the 12-story building is just down the street from a 188-unit former condo building at 5815 N. Sheridan Road that sold in 2018 for $27 million, another deconversion brokered by CBRE.
Though the city’s new ordinance has made it harder to pull off condo-to-apartment deals, the coronavirus pandemic hasn’t had a noticeable impact on the deconversion market, said Andy Friedman, a broker at Chicago-based Kiser Group.
“I don’t think COVID has changed it, at least not yet,” said Friedman, who is marketing LaSalle Towers. “I’m sure there will be effects.”
“If it decimates condo pricing, you’re going to see more deconversions,” Friedman said.
Built in 1929 as a hotel, LaSalle Towers was later converted to apartments and then condos in 2006. Many downtown denizens recognize the 19-story building for the large trompe l’oeil murals on its three sides.
The property’s $21 million asking price represents a 25 to 30 percent premium over what the building’s condos would fetch if they were sold individually, Friedman said. The building has been marketed as a deconversion to developers going back to 2017, with the latest deal falling apart last fall, he said. Kiser has been marketing the property for about four weeks.