Condominium conversions are Chicago's great housing bargain

Smart home shoppers this autumn are scanning the Chicago lakefront for condominium conversions, which experts say are the best housing bargains in the Windy City.

While most well located new-construction condominium developments are selling in the $250 to $350 a square foot price range, appraisal experts say several conversions in fairly well renovated buildings are going for far less. Value conscious buyers are noticing the advantage of buying in older buildings.

“Today, condo conversion developers are offering extensive refurbishments, including granite kitchens, marble baths, impressive new lobbies, replacement windows and elevator and mechanical-system upgrades,” noted Gail Lissner, vice president of Appraisal Research Counselors, Chicago’s premier condominium appraisal firm.

Lissner said one of the most successful new conversions is Quadrangle Condominiums, 6700 S. Lake Shore Drive in South Shore, where Quadrangle Conversion, LLC, an affiliate of the Habitat Company, put 261 units on the market in September.

“Nearly 120 residences have already been sold and 85 of the initial buyers are former renters in the building,” Lissner said. Prices on units with 591 to 1,081 square feet – convertibles, one- and two-bedrooms – run from $73,000 to $135,975. That’s about $100 to $129 per square foot.

“Quadrangle Condominiums is a wonderful building with fabulous views,” said Lissner. “South Shore has a great lakefront location and there are no comparable properties to this well-maintained highrise, which was built in 1968 and managed by the Habitat Company as a rental.”

In addition to new thermopane windows and other common area improvements, each apartment will receive a remodeled kitchen with new appliances, sinks, faucets, flooring and choice of new cabinets and countertops. Bathroom upgrades include new medicine cabinets, lighting and a choice of vanity and countertops.

Another hot conversion property is the 30-story highrise at 525 W. Hawthorne Place, overlooking Belmont Harbor in East Lakeview. Nearly 100 condos have been sold at the highrise since June.

Designed in the 1970s by architects Solomon Cordwell Buenz & Associates, the $80-million highrise features 231 residences with angled bay-window views of Lake Michigan, the Loop and Wrigley Field.

The highrise is being refurbished, with new windows, a new canopied entry and a marble lobby, according to Vilas Development, the developer. The recreational focal point of 525 W. Hawthorne is a rooftop swimming pool and sundeck, which adjoins a renovated fitness center.

“Five twenty-five W. Hawthorne Place is one of the great condominium values on the North Side,” said Frank Chiodo, sales manager for Vilas Development. “One-bedroom units can be purchased ‘as is’ for $189,900, or as little as $212 per square foot, and prices on ‘as is’ two-bedroom residences start at $279,900.”

If buyers opt for the standard interior renovation package with new kitchens and baths, base prices start at $199,800 for a one-bedroom unit and $294,900 for a two-bedroom layout, Chiodo said.

Why should a Chicago condo shopper consider purchasing a conversion unit?

According to Lissner, strong demand exists today for converted condominiums because “buyers can expect immediate delivery and today’s low interest rates have narrowed the cost to own versus renting.”

Benchmark 30-year fixed home-loan rates were 5.98 percent in mid-October, down from 6.58 percent a year ago, according to Freddie Mac’s Primary Mortgage Market Survey.

Although they may be a long way from the “condomania” era of the late 1970s, condominium conversions once again are carving a significant niche in Chicago’s housing market, Lissner noted.

“Between 1991 and the beginning of 2002 there have been 53 Chicago rental projects with a total of 11,410 rental units converted to condominium ownership,” she said. “We project that the condominium-conversion market can absorb roughly 750 to 1,000 units per year on a sustained basis, but the availability of buildings will hamper future conversions.”

Real estate columnist and media consultant Don DeBat has written about Chicago-area housing and mortgage markets since 1968. He is president of Don DeBat and Associates, www.dondebat.net.