Celadon Building $70M Senior Housing Project in Deerfield

A different kind of office-to-residential play is taking shape in the northern Chicago suburb of Deerfield.

Celadon Partners, a Chicago-based firm formed by Scott Henry and Aron Weisner, is in the process of tearing down an office complex at 1101 Lake Cook Road and will soon break ground on an affordable senior living facility that will replace it.

Since the pandemic cratered office demand, office-to-residential conversions have made headlines as possible life rafts for buildings struggling with stagnant vacancy rates. The concept was also billed as a solution to many cities’ affordable housing needs.

But such proposals have proven to be easier said than done.

Office buildings often have floorplans that are incompatible with typical apartment layouts and retrofitting those spaces can prove costly. That’s why some cities like Chicago are offering subsidies to help developer conversions pencil out.

At the Deerfield property, prior plans to tear down the office building and replace it with a senior living facility fell through due to financing issues last year. That’s when Celadon came in and offered to buy the property and revive the proposal.

Celadon itself has been on the other side of losing out on an office conversion opportunity, after making a $210 million proposal to turn 105 West Adams Street in Chicago’s Loop into 247 apartments, in partnership with developer Blackwood Group. The firms requested $60 million in tax increment financing from the city to help subsidize the cost of making a majority of units affordable.

The project was put on the city’s short-list for its LaSalle Street Reimagined office conversion subsidy program, only to not move forward as originally envisioned, with Celadon citing the property’s complicated ownership structure as the reason it hit roadblocks. After a lender took over the property and sold it for $11 million, a new development group is plotting a residential conversion.

Back in Deerfield, buying vacant land may have been cheaper for Celadon than the conversion route, but having the zoning already in place for the project was a major selling point, said Henry, the firm’s co-founder.

“There is massive pent up demand,” he said of the need for senior housing in the Chicago suburbs.

Celadon bought a majority stake in the property last year for $4.7 million from a joint venture of commercial mortgage banker Gary Wool and Janko Group’s Gary Janko after a prior buyer’s offer failed to materialize. Although Celadon will lead the redevelopment, Janko and Wool will remain minority owners.

With a mix of public and private financing totaling $70 million, including affordable housing tax credits, Celadon will break ground on the 4-story, 147-unit affordable senior housing development next month.

It is expected to be completed in mid-2026.

Celadon earlier this year also won a bid in suburban Evanston to redevelop the historic city-owned Harley Clarke mansion on Lake Michigan’s waterfront to the tune of $29 million. The plan is to turn it into a 10-key hotel, restaurant, ice cream parlor and basement speakeasy.