More Apartment-Turned-Condo Conversions Beef Up Chicago Inventory

An example is the unfinished Sheridan Road condos in Lakeview, seized in a distressed sale less than two years ago. Today they're nearly sold out. Why? There's just not enough to go around.

Exterior of Repurposed Lakeview Apartments at 2930 N Sheridan Road

Photo by: Conlon & Co. Exterior of repurposed Lakeview condos at 2930 N. Sheridan Road. Conlon & Co., plan to launch a second building at 3033 N. Sheridan this fall. 

In 2011 Conlon & Co., in a joint venture with Contrarian Capital Management LLC out of Greenwich, Conn., paid $14 million at a fire sale for 130 units in two buildings seized in a deed-in-lieu of foreclosure. The property developer, Robert Kroupa, skipped on his $76.4 million loan for the Lakeview high-rises and couldn’t beat off the wolves. Now buyers have snapped up 65 of the 67 units in the apartment-to-condo conversion at 2930 N. Sheridan Rd., and the other half of the deal, 63 units at 3033 N. Sheridan, will get a marketing rollout in September, according to Crain’s. 

But that’s nothing, a drop in the proverbial ocean compared to starving consumers latching onto anything that causes a ripple in this town’s pitiful condo inventory. The one- and two-bedroom units — some with views — sold between $165,000 and $358,000, reports Crain’s. Conlon targeted the initial run to first-timers and plugged in the customary amenities house hunters expect, i.e. granite countertops and stainless steel appliances.

It's starting to feel a little like running in place. There is a huge opportunity to build to demand and it looks like more developers are eyeing repurposing apartments to fill the holes in the supply. No question there’s a building boom afoot, yet Chicago still experienced stagnation in delivering new condos to market. And the Crain's piece had this tap on the shoulder: The first half of 2013 had numbers so low — a trifle at 12 total active projects — you had to squint at 1997 charts to see the last time we hit this trough. It’s inevitable that some smart developers (and hedge funds) are going to ride this turnaround up, many via apartment conversions. Watch.

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