Kovitz Shifrin Nesbit attorneys recently represented Century Tower, a Chicago Loop high-rise condominium association located at 182 W. Lake Street, in the sale of all units to Golub and USAA Real Estate for $60 million. This is the largest condominium deconversion in downtown Chicago as of February 2018.
KSN attorney Kelly C. Elmore, working with Associate Omar Malik as well as KSN’s sophisticated deconversion closing team, closed all 296 residential units of the 88-year-old building. In conjunction with the sale of all residential units, Elmore and the KSN team also negotiated and closed a sale of the Association-owned commercial space to Golub for $900,0000.
The sale of the Century Tower condominium units was approved by a vote of the unit owners under Section 15 of the Illinois Condominium Property Act. The “Section 15 sale” is a process where a buyer makes an offer to the owners to purchase all of the units in the association and, with few exceptions, requires the approval of not less than 75% of the ownership of the common elements. The Century Tower sale was approved on September 11, 2017 with a 75.64% vote.
Throughout the closing process, KSN also handled a number of litigation matters in resolving issues with individual owners, as well as code violation matters with the City of Chicago. Arguably one of the most complicated Section 15 deconversions in Chicago due to the litigation, the Association’s relationship with the owners of the adjacent commercial space, and emergency litigation, KSN’s team completed the closing only five (5) months after the contract was approved and executed by the Association.
The Condominium Deconversion Trend
As previously noted by KSN, many developers are acquiring condominium buildings for the purpose of converting them into apartment buildings. This trend appears to continue well into 2018. The conversion of condominium associations into apartment buildings that can be rented at steadily increasing market rental rates is a phenomenon that has gained significant momentum, providing a profitable venture to local and national investors.
In an effort to handle these complex transactions and ensure that associations are able close on the bulk transaction, KSN has developed a deconversion department dedicated solely to negotiation of the Section 15 contracts.
Kovitz Shifrin Nesbit attorneys have extensive experience handling Section 15 sales and deconversion transactions for condominium associations of all sizes. As of February 2018, KSN has completed 21 condominium deconversions, including:
- 625 Wrightwood – a Lincoln Park condominium association with 98 units (residential and parking), closed in January 2017
- Clifton Village – a Northside Chicago condominium association with 38 residential units, closed in August 2017
- Loyolton – a Northside Chicago condominium association with 42 residential units, closed in December 2017
- 2625 N. Clark Street – a Northside Chicago condominium association with 272 units (residential and parking), closed in November 2016
KSN is actively working on 18 transactions that are scheduled to close in 2018.
KSN is uniquely set up to handle these transactions due to its internal resources and full service departments, including:
- An experienced Condominium Corporate Practice Group
- Corporate/Real Estate Practice Group
The KSN condominium department advises Board members and unit owners during the contract negotiation. Simultaneously, the KSN closing and real estate legal teams prepare all the necessary documentation for the closings, facilitating the execution of the individual unit closings.
If your condominium association is considering a deconversion or sale of all units in the building, please contact Kovitz Shifrin Nesbit for information on how our law firm can assist your community. Contact KSN at 855-537-0550 or visit https://www.ksnlaw.com/condo-de-conversion-sale-of-units.
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