Strategic Properties reignites River North condo buyout effort

Strategic Properties of North America appears to be resurrecting its failed $190 million condo deconversion effort in River North.

The New Jersey-based company, also known as SPNA, is preparing a proposal for another bulk purchase of homes in the 50-story, 467-unit tower at 10 East Ontario Street, according to an email sent by law firm KSN to owners at the property. KSN previously represented many of the unit owners during the condo association’s three years of back-and-forth with SPNA over the failed deal.

“We have received an update from counsel for SPNA that the buyer intends to submit an offer for the bulk purchase of units in the association,” the email said. “SPNA’s attorney is currently preparing a draft contract for the bulk sale. SPNA’s counsel has requested that we notify the individual owners represented by KSN of this update.”

The firm representing the condo board did not respond to a request for comment. Calls to SPNA’s Skokie office went unreturned. An attorney representing SPNA’s previous lender, Fairchild, did not respond to a request for comment asking if the lender was financing the newly proposed purchase.

The price of the newly proposed purchase is unclear, though rising interest rates have chipped away significantly at multifamily real estate values in Chicago since a supermajority of the condo tower’s owners approved the $190 million sale three years ago. Sellers of several big traditional apartment buildings in the Chicago area took heavy losses when they sold assets this year under the tighter lending environment.

The move to notify condo owners of SPNA’s new attempt at a bulk purchase comes after the previous deal, which would have been the priciest condo deconversion in Chicago history, was terminated by the condo board in June. It was the end to a three-year saga in which the buyer, SPNA, struggled to get financing and meet deadlines for the ambitious deconversion.

Affiliates of the firm, which is led by Yitzy Klor and Saul Kupperwasser, already own dozens of apartments in the tower.

The company became a specialist in condo deconversions, which can be messy deals because they involve multiple players and some resistance from holdout condo owners, even when faced with pressure to support a sale from condo board members in some cases. This was true at Ontario Place, where the board already fended off multiple lawsuits from unit owners who didn’t want to enter the deal.

Even with those complaints out of the way, skirmishes flared within the building after SPNA backed out of closing in the middle of February. That’s when unit owners were told to leave their keys on their counters only to be notified hours later the buyer didn’t have the funds yet to close.

Since the deconversion disintegrated at 10 East Ontario, multiple owners have listed their units, looking to make an exit amid years of waiting for a deal to materialize. Last month, at least 12 units were on the market, with many of the one-bedroom units asking between $309,000 and $320,000. It was a stark change from a few months prior, when some unit owners felt they were trapped and unable to sell their unit individually while the bulk sale was pending.

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