Kiser Group recently brokered two condominium deconversions in Oak Park, Illinois. Goldman Investments acquired the Regency Terrace Condominiums, a 56-unit property located at 922 North Boulevard, for $8,805,000; meanwhile, Redpoint Capital Management paid $3,600,000 for Clarence Court, a 26-unit deconversion located at 628 Harrison Street.
In the first transaction, Kiser Group broker, Andy Friedman, and director, Matt Halper, represented The Regency Terrace Condominium Association in the sale while Marco Cesario represented the buyer, Goldman Investments. Friedman and Halper also represented both the buyer, Redpoint Capital Management, and seller, Clarence Court Condominium Association, in the second deal.
Regency Terrace currently features 28 two-bedroom/one-and-a-half-bathroom units and 28 one-bedroom/one-and-a-half-bathroom units. The building also includes 24 garage parking spaces, 41 surface parking spaces, a swimming pool and rooftop deck.
“This value-add investment is a blank canvas for the buyer to be able to modernize units and see significant rent increases. Being able to acquire this many units in downtown Oak Park was also a rare opportunity,” said Halper. “The appetite for an investment like this was high, with over 45 tours and a dozen offers.”
“Regency Terrace Condominiums is a prime example of how condo deconversions can be a win-win scenario for all parties involved,” said Friedman. “The property requires substantial and costly physical improvements. This deal saved residents from large special assessments and passed with well over an 80 percent yes vote.”
“There is an influx of international capital not only for Chicago deals but also suburban,” said Cesario. “We have seen and represented investment dollars coming from the Middle East, Asia and Europe.”
Clarence Court currently features 14 two-bedroom units and 12 one-bedroom units. According to Friedman, only 10 of the 26 units were owner-occupied.
“This property fits the most common mold for deconversions. Most of the owners purchased a starter condo in the mid-2000s. When the market crashed and was slow to recover, owners had two options instead of selling at depressed pricing. They either became accidental landlords and rented the unit out or were stuck living in the unit,” said Friedman. “These owners received 25 to 30 percent more in the deconversion than if they would have sold their units as individual condominiums.”
“These two properties provide attractive opportunities for investors to capitalize on the strong rental market in Oak Park,” said Halper. “It is unique among Chicago suburbs in that there is new construction multifamily development activity similar to many city neighborhoods. Oak Park is well located near multiple transportation options with strong retail, restaurant and entertainment offerings renters demand.”