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As Edgewater Rents Rise, Owners Of Large Condo Complex Look For A Buyer

Called condo deconversions, owners of a 188-unit condo building in Edgewater have hired CBRE to help sell their building to a developer who wishes to take advantage of rising area rents. If sold, it could become one of the largest condo-to-apartment sales in Chicago.

The owners of 5815 N. Sheridan, a 12-story building along the lakefront, are looking for an option likely because they have had issues selling their individual units. Some of those residents may also be underwater after the past real estate crash. Collectively, this gives them an opportunity to sell as a group and possibly get a better price for the units than if they sold individually. According to Illinois law, at least 75% of the owners must be in agreement for the process to begin.

With many buildings converting to condos prior to the crash, the trend of deconversions back into apartments could become more popular. Due to the increased demand for apartments, rents have soared while condo prices have not caught up.

Because the 5815 Sheridan building is along the lakefront, close to transportation, and has a multitude of dining and shopping options nearby, developers could see the building’s profit potential. The building also has a rooftop deck, beach access and 140 parking spots which will be attractive to renters.

Low interest rates have also led to these type of sales. Developers find that updating aging building and adding modern amenities and finishes give them an opportunity to ask for higher rents.

According to the CBRE Vice President Sam Haddadin in a Chicago Tribune article, He expects the sale of 5815 Sheridan to top last year’s $35 million sale of the 133-unit Clark Place condo building in Lincoln Park, but come in below the $51.1 million price for the 207-unit Bel Harbour building in Lakeview. That sale was the largest of its kind in Chicago.

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  • Chgosaint

    Having lived in this building for three years, it does not have roof access even though they sold that idea to me. The roof is limited to the four units on the top floor and can only be entered through their condo units. The building itself is pretty rundown and needs a lot of help. The laundry area is awful and half the washing/drying units never work. I moved in when they advertised that it was a doorman building. There was a doorman only at night for the first three months then they did away with that. The management of the building was so bad that no managers would stay, they outsourced the garage attendants, anything they could do wrong from a management perspective, they did. A good buyer would be one who tears it down and puts up something new. I am sure a few residents who live on the fifth floor will fight this, but most of the units are owned by absentee landlords.

  • I toured a couple of condos there on open houses over the years. That building seems to be in pretty rough shape. One thing I really didn’t understand is why they have their storage units taking up the entire top floor of the building… odd.

  • disqus_BDlauntjnP

    Does anyone know how this might affect neighboring condo buildings’ individual unit values? If rents are high, people are encouraged to buy rather than throw money away on rent. But is the sale broken down to individual units throwing off the area comps? Unfortunately, short sales/estate sales and repossessions still affect comps, which they shouldn’t and would be one easy way to help avoid situations like this.