A New Jersey-based company has purchased the Heritage Village Pointe condominium complex in Des Plaines with plans to convert the complex into rental units.
When completed, the 154-building, 924-unit complex deconversion will be the largest of its kind in Illinois, company officials said.
CLK Properties LLC bought the complex for $94 million, according to a statement from Cagan's Realty, Inc., the Skokie-based agency that worked with CLK in the transaction. Cagan and CLK were able to get the 75% support of the complex's condominium owners required by state law to secure the deal.
Cagan's Managing Broker Mirela Dulu said the long-term plans are to complete a comprehensive, multimillion-dollar modernization to make the complex competitive in the Northwest suburban market.
"Investors like CLK typically pay a premium to take control of an entire development like Heritage Village Pointe," Dulu said. "Given the property's location in the local marketplace and the lack of new development opportunities, this represents a great opportunity for CLK to further increase its growing portfolio."
Built in 1973, the six-acre property at 10001 Linda Lane will be renovated in a staged, multiyear redevelopment that will modernize the individual units and common areas. Current residents will be able to stay in their units until their buildings come up for rehabilitation, Dulu said.
Condo deconversions have become more common in Chicago over the past few years as demand for rental units has increased and the condo market sales have flattened. But while much of the focus has been in the city, experts say interest in deconversion in the suburbs has also increased.
"Compared to downtown buildings, we get just as many, if not more calls, from board members of suburban condo associations interested in exploring the deconversion opportunity," said Sam Haddadin, vice president at commercial real estate firm CBRE in Chicago.
Under state law, deconversions require sale commitments from at least 75 percent of unit owners. Dulu said she and Cagan broker Heather Gallagher were able to get 702 unit owners to accept CLK's offer following months of negotiation. She added investors and unit owners were motivated in part by the above-market purchase price offer per condominium, as well as the prospect of expensive monthly assessments that would be required for deferred maintenance at the property.
CLK Properties entered the Chicago market in 2014 and has since acquired more than 2,000 units plus an additional 304,000 square feet of prime retail and office space. Dulu and Gallagher brokered the acquisition.