A Look Back at One Creative Idea to Sell Chicago Condos Nearly One Year Ago
Thursday, December 15th, 2011If we look back to a Crain’s article that ran almost one year ago (in January 2011), we’ll see Mesirow Financial had discovered an interesting way to sell out a bunch of Chicago condos that were for sale at the time in the West Loop. Here’s what happened…
The developers of the 237-unit project known as R+D659 (located at 659 W. Randolph Street) wanted to sell 19 unsold condos to a local non-profit that aids with treatment of mental illness and addictions so the organization could rent the units out to their clients. Thresholds (the Chicago-based non-profit) had planned on purchasing the Chicago condos for mental-health patients to live in while making the transition to living independently from needing assistance. However, before the deal could go through, the condo association of the building had to review the proposal—not to mention it also required city approval.
In order to gain the needed zoning approval from the City of Chicago for the R+D659 project, Mesirow had to keep 10% of the building (24 condos) set aside to be used as affordable housing. Of course, because of the recession and the housing market funk, Mesirow only sold five of the Chicago condos it had reserved for lower-income buyers.
The agreement with the City of Chicago ensured that the 19 remaining units remained affordable, however, it also allowed Mesirow to find an inventive way to sell the lower-priced units despite the Chicago condo market’s dismal state. The deal with Thresholds to purchase so many units at once was a rarity for the times. Still, the proposed solution for Mesirow was sure to create some issues with other tenants of R+D659. While some residents may not wish to live in the same building as recovering mental health patients or addicts, others may fret that the value of the condos would decrease due to the scenario.
At present, Chicago does not allow for non-profits to make these types of sales. Thresholds was planning to pay $125,750 per condo and not a penny more for the Chicago real estate, due to an ordinance proposed by Mayor Richard Daley in December 2010. Thresholds also was interested in buying one of the affordable units that Mesirow sold previously and was planning on assigning a staff member to each client for counseling, training and educational aid.
However, the plan was scrapped only a week after its announcement in January 2011. The condo board and condo owners were very adamant about not wanting it to move forward and Alderman Walter Burnet decided to block the required ordinance through City Council unless they retrieved approval from all of the building’s owners. As a result, Mesirow and Thresholds did not go through with the deal and the units did not sell after all.





