An 11-unit condo building in Lincoln Park is will soon be no more – the owners of the condos at 1909 N. Orchard St., put the structure up for sale last week, and the buyer, a developer, plans to demolish the property and build a brand new building on the land.
Midwest Real Estate Data LLC reports the asking price of the property was $4.75 million.
It is unusual to see sales like this, because residents of a condo building rarely want to sell their units at the same time. And if they do, agreeing on a price is challenging.
Smart Move to Sell Building in Bulk
The Orchard building is attractive to developers, because it is located in an area well-known for its mega mansions. Developers are able to justify paying a premium for all the condos and build a more valuable building in its place.
“There’s no way to realize that value with a condominium regime in place, so what makes sense is to sell it in a way that gets rid of the condominium regime,” David Sugar, condo lawyer and partner in the Chicago office of Arnstein and Lehr LLP, said. “It’s a terrific way to maximize value and not be financially disadvantaged by the fact you’re a condominium.”
This reasoning encouraged residents that it might be easier to sell the building as a whole, rather than as individual units.
“When I was figuring out how I was trying to get out, I mentioned to the (condo) board that (one-bedroom, one-bath units) aren’t selling because people aren’t getting money at all right now,” Jeremy Zwillenberg, a resident of the Orchard building, said. “But the ultra-rich have always been spending, no matter what’s going on with the economy.” County records show that Zwillenberg paid $387,500 in 2007 for his unit.
Joann Grace, the condo board president, is hesitant to sell her property, which she bought in 1997 for $179,000.
“It’s a unique space that we like and don’t think we’ll be able to find something like this again,” she said. However, she believes she will sell her condo at a higher price through the bulk sale.
How Will the Sale Work?
ChicagoRealEstateDaily.com reports that the sale proceeds would be split between the owners based on their “ownership interest,” or the size of their condos, a mix of one to three-bedroom units. County records show that a condo hasn’t sold in the building since 2008, when three units sold for $265,000, $331,500 and $382,500. The most expensive sale occurred in 2003, when a unit traded for $400,000. The buyer and its plans have not been determined yet.