Kiser Group Lists Hampden Green Condominiums for Multifamily Conversion

A multifamily brokerage is betting on the appetite for a bulk buyout of unit owners in a Lincoln Park Condo building set to cost at least $41 million.

Chicago-based multifamily brokerage Kiser Group is listing the offering, Hampden Green Condominiums, at 2728 North Hampden Court in Northeast Lincoln Park.

The Hampden Green property includes 206 units, with 81 studios, 20 “junior” one-bedroom units, 104 standard one-bedroom units, and one two-bedroom unit. According to Kiser, 40 percent of the units are owner occupied and 60 percent are investor-owned rentals already being rented out to their residents. The property is several blocks from Diversey Harbor and Lake Michigan.

Kiser Group’s Andy Friedman and Jake Parker are listing the property and Friedman said the condo board got an unsolicited offer earlier this year, and instead of moving forward with that, hired Kiser to ensure they got the best offer possible from a pool of buyers.

When condo boards hire a broker to market the property, it also signals to investors that there will likely be fewer hiccups or disputes down the road. Friedman and Parker said that long, drawn-out deconversions — which require 85 percent of unit owners to approve to close and sometimes involve fights with holdout unit owners against the sale — are usually the result of a single unsolicited offer.

“What helps get these deals done is communication with ownership,” Parker said. “And when they just have an unsolicited offer and push it through as a vote, owners are blindsided and get upset. They don’t want this forced upon them. Versus when this happens with us, we make sure to have our email address, our cell phones sent out to all voters to reach out to us with questions and we communicate with everyone whether they’re for the sale or against the sale. … And try to get as many people okay with the idea as possible.”

The listing will be going to market without a price, but given previous similar deals, the brokers expect the price to be over $200,000 per unit, making the minimum price for the offering over $41 million.

Friedman said the property was a value-add, as they anticipate the buyer making additional updates to the units after a purchase. He said that despite a broader slowdown in the real estate market, mid-market residential assets are perform well.

“There’s always going to be a market for good mid-market multifamily in Chicago, and this building is the upper end of that,” Friedman said. “There’s plenty of people here that are in Chicago and have money to buy buildings and will come look.”

Some Chicago condo deconversions have faced challenges getting across the finish line in recent months. The deals, which are frequently complex and often involve litigation, can become bogged down if condo owners object to the terms of the transaction.

The benefits can be worth the risk, however. Chicago’s condo market has been a consistent drag on its overall housing market, with ample stagnant inventory despite low inventory in much of the city’s other housing sectors.

Converting mid-market condo buildings to standard multifamily rentals — which have demand outpacing supply in Chicago — can be a boon for those willing to negotiate a deal with current condo owners. They allow condo owners to get out of their properties for more money than they would get with an individual unit sale, while the multifamily buyers end up with a building valued at a higher price than they paid for all the units after assembling them under a sole owner.

Kiser recently brokered a similar deal to the Hampden Court listing. Becovic Residential, a Chicago-based multifamily firm, paid $31.5 million for a Lakeview deconversion. The 154-unit Granville Tower at 6166 North Sheridan Road sold for roughly $205,000 per unit.