Residents of a 391-unit Gold Coast condominium tower rejected ESG Kullen’s bid to buy their building and turn their units into apartments.
The New York-based firm’s $111 million offering price would have been the priciest deconversion deal ever had the residents of 1400 North Lake Shore Drive accepted it, according to Crain’s.
But in a vote this week, ESG failed to win over at least 75 percent of the building’s ownership, the threshold needed under Illinois law to force a bulk sale of the building’s condos.
The deal didn’t fail by much: Some 74.6 percent of ownership favored it, people familiar with the vote told Crain’s.
More and more investors have been willing to pay a premium for condo buildings in order to turn them into apartments in order to take advantage of Chicago’s hot rental market.
ESG’s offer worked out to about $410 per square foot, well above the $300 per square foot some units in the building sold for recently. One owner who voted against the deal, Lauren Kerchill, would have received $345,416 for her condo, 55 percent more than the $223,500 she paid for it just a year ago.
A similar plan by Marc Realty Capital to buy the 449-unit River City complex fell apart earlier this year when the developer abruptly lowered its offer.
Residents of other buildings, though, have jumped at big-money offers for their condos, getting much more than their units would have been worth individually. [Crain’s] — John O’Brien