The prices at which two new apartment towers have sold recently raise the question of whether owners in some newer condo buildings could realize higher prices from a rental conversion of their entire building than from the sale of their units individually as condos.
MetLife is reported to have paid $483,000 a unit or a total of $120.2 million for the 249 units at EnV, 161 W Kinzie St in River North. And Chicago Real Estate Daily reported yesterday that the 221-unit Parc Huron, 469 W Huron St, also in River North, is under contract at a price of $110 million, or $498,000 per unit.
EnV’s unit mix consists of studio, 1- and 2-bedroom apartments. Studios and 1-bedrooms dominated the mix. Parc Huron has 1-, 2- and 3-bedroom apartments, the majority of which are 1-bedrooms.
There’s some precedent from the 1980s of condo owners in mid-sized buildings organizing to sell their building in its entirety for conversion to rentals. It would be a daunting organizational challenge to pull off a rental conversion of a condo building of any size, but I have to wonder whether there are buildings in which it would make economic sense for all involved to do so. There’s little doubt that there are condo owners who wish they could become renters of their units rather than owners.