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Downtown Condo Conversions on Record Pace

By Mark Ruda
Globest.com
Tuesday, August 30, 2005

CHICAGO - The Downtown multifamily market is seeing a record year for condominium conversions, with the pace triple the level typically seen, according to Appraisal Research Counselors. The firm’s “Residential Benchmark Report” puts the number of converted units so far this year at nearly 3,000, with nearly half of them sold, and projects the total to hit 3,893 by the end of the year.

The Downtown area saw just 652 rental units converted to condominiums last year, according to the firm, with the average being about 1,000 since 1991. The previous high-water mark was the 1,881 units converted in 2001, Appraisal Research Counselors says.

“Interestingly, many of the recent conversions have included the newest, most luxurious and well-located rental buildings, which have been constructed in the past five years,” according to the report, co-authored by vice presidents Gail L. Lissner and Ron DeVries. “With this type of new inventory on the market, the price levels of conversion product are now very close to many of the new construction projects in the market.”

Fitting that profile are the 254-unit 2 E. Erie, the 480-unit Park Millennium, the 283-unit west tower of Grand Plaza and 452-unit 400 N. LaSalle St. Units in the latter two buildings are priced above $400 per sf, according to Appraisal Research Counselors.

Also undergoing conversions are the 505-unit North Pier Tower at 474 N. Lake Shore Dr., 133-unit 2625 N. Clark St., 468-unit 10 E. Ontario St. and 398-unit 1400 N. Lake Shore Dr. Other possibilities, though, are 222 E. Pearson St., 700 S. Federal St. and 1140 N. LaSalle St., which also changed hands this summer, the report notes.