Posted on

27 million reasons why a condo would ‘deconvert’

 Lake Michigan from the North Shore, Chicago

In a deal worth $27 million, Edgewater Beach condominium owners in Chicago plan to sell their lakefront building to Greenstone Property Group, a New York- based real estate investor that will convert its 188 units to apartments.

Almost 80 percent of unit owners accepted the offer in a vote over the summer. Under Illinois law, bulk con- dominium sales must be approved by 75 percent of unit owners. The sale is expected to close this year.

“I think owners were beginning to realize that if we don’t sell, we will be required to raise several special assessments to fund crucial deferred maintenance issues, many of which are not prepared for,” says Shawn Swift, president of the Surfside Condominiums board. “We felt it was important that all owners have the choice to decide the building’s fate collectively, rather than a board of directors’ decision to move forward with $3–$4 million in special assessments over the next two years.”

Owners will receive approximately 40–50 percent more on average for their units than if they were to sell on their own, explains Swift, and without the worry of paying hefty assessments in the future.

“We have also negotiated favorable leaseback terms for any owners who wish to stay in their units post-closing,” Swift adds. “The buyer will honor any cur- rent leases in place between an owner and their tenant. About half the building is currently being rented.”

The sale will be one of the largest condominium-to- apartment conversions—also known as deconversions—in the city’s history, according to the Chicago Tribune.

“Condominium deconversions became popular a few years ago because of the increased rental rates in Chicago,” says Patrick T. Costello, a shareholder at Keay & Costello law firm and a legislative liaison to CAI’s Illinois Chapter Legislative Action Committee.

The post 27 million reasons why a condo would ‘deconvert’ appeared first on Ungated: Community Associations Institute Blog.

Posted on

Smoking Ban Goes Up In … Smoke

A failed smoking ban remains a point of contention between residents at a nearly 40-year-old condominium building in St. Paul, Minn., according to the Star Tribune.

The Gallery Tower board voted to ban smoking in the summer of 2017. The ban, which was due to go into effect this past April, was supposed to apply to units and the balconies outside them, according to reports. However, earlier this year, newly elected board members who smoke took control and voted to rescind the ban before it took effect.

A 19-year resident of the Gallery Tower, Marge Romero, felt she should be able to do what she wants within the confines of her home—and that includes smoking cigarettes.

In January, Romero and two other residents who opposed the smoking ban were elected to the board, and the following month the board voted to rescind the ban, citing it was a big overreach.

Yet that hasn’t stopped other buildings from outright bans.

“I think there has been a definite trend toward banning smoking in condominiums, and I expect that to continue,” says Matt Drewes, president of the CAI Minnesota Chapter. “Efforts at redirecting, controlling, or containing smoke has had mixed results and have often fallen short of making all parties happy, and they come at a certain expense that the owners involved may not be willing or equipped to pay.”

The fight at Gallery Tower may not be over yet. Residents like Jeff Tentinger and his wife, Robin— who spent more than $8,000 on air purifiers—were stunned people needed to vote on a smoking ban in 2018, especially given the health problems related to secondhand smoke.

States, cities, and other local governments have been moving to ban smoking in public places for years. Residents of public housing facilities in the U.S. can no longer smoke in or near the buildings in a new rule that went into effect July 31.

Many community associations have been outlawing the practice in common areas and on amenities but letting owners continue to smoke inside their units. Some condominiums are trending toward full bans, yet as the Gallery Tower situation proves, they may have a fight on their hands.

The post Smoking Ban Goes Up In … Smoke appeared first on Ungated: Community Associations Institute Blog.