River City condo owners agree to sell to developer
April 5, 2018

Condominium owners at River City, a mixed-use building at 800 S. Wells St., have agreed to sell their 449 units for $100 million to Marc Realty Capital, which plan to convert the units to apartments. The closing is set for June 26.

The sale occurs in tandem with another large deconversion in down-town Chicago in February, when Chicago-based Golub & Company bought the 296-unit Century City at 182 W. Lake St. for $60 million.

The River City agreement came in mid-December after a third offer. Based on Illinois statute, 75% of owners must approve a sale. Previous offers of just more than $81 million and just more than $92 million fell short of that threshold, but owners approved the $100 million offer.

Attorney Kelly Elmore represents the River City Condo Association. She works at KSN, a Chicago condo specialty law firm. She said she is involved in 18 additional deconversion transactions.

Elmore noted the River City sale has gone well, “especially smooth for a building of this size with that many units,” she said, crediting in part the buyer’s offer to condo owners of up to 60% to 70% above fair market value along with compensation for certain improvements made to their units. “I think it also helps that Marc Reality also owns the commercial property” on the building’s street level,” she added.

Elmore said Chicago-based Wolcott Group likely will join Marc Realty Capital in converting the condos to apartments after the closing.

After the conversion is final, current condo owner-occupants can stay after they execute a new lease with the buyer. Those who currently are renters and who are not owners already have leases.

Officials at Marc Realty Capital and the Wolcott Group did not respond to requests for interviews.

Elmore and Doug Imber of Essex Realty Group said the economic landscape has driven increased condo-to-apartment conversions.

Adding to River City’s potential for condo-to-apartment conversion is the emergence of a river walk south of the Loop. Dennis McClendon, a longtime member of South Loop Neighbors, said how the river walk is developed will be key to property values as well as South Loop property development and redevelopment.

—Rick Romano