Market Conditions: Bulk Condo Buy in 757 N. Orleans While Zillow Reports Homeowners Still Underwater

Published May 24, 2012

Crain’s recently reported on a recent bulk buy of condos in 757 N. Orleans in River North to an investor.

Not surprisingly, the investor is going to wait out the downturn by renting the units.

A Florida investor with foreign capital is diving into the Chicago condominium market, paying nearly $11 million for 39 unsold units in a River North tower.

A venture by led Aventura, Fla.-based Gamla Cedron Group is paying $252 a square foot for the 39 unsold condos at 757 N. Orleans St., a 198-unit tower finished in 2008, sources said. The new owner plans to rent out the units for the time being.

The deal marks an exit for the project’s developer, La Grange-based Gammonley Group, which turned to a bulk offering amid slow sales, a common move among developers and banks in today’s distressed condo market.

Yet it’s unclear whether the sale will generate enough money to allow Gammonley to pay off the remaining principal on its construction loan. The developer originally borrowed $46.3 million.

It is the Gamla Cedron Group’s first foray into the Chicago market.

Mr. Mishal says he was drawn to units in the building that include balconies, floor-to-ceiling windows and other features “you don’t see in the rental community.” He plans to rent the units for “no less than the marketplace,” or around $2.60 per square foot, until the condo market improves, allowing for resales.

Gammonley first offered 52 condos in February, but some of those units since sold to individuals, says Susan Lawson of Apartment Realty Advisors Inc., which brokered the bulk sale. Individual sales averaged $313 per square foot during the first quarter, according to real estate consulting firm Appraisal Research Counselors.