New York-based ESG Kullen has acquired 1400 N. Lake Shore Drive in Chicago for approximately $107 million. The sale will see the 391-unit, vintage condo building open up to rentals in the city’s largest deconversion to date.

The transaction took place on November 22, after the effective date of a recent Chicago ordinance raising the voting ceiling for a deconversion from 75 to 85 percent of individual owners. The deal went to a vote a number of times, barely failing in July with only 74.6 percent voting yes. The ultimately successful vote saw 85.8 percent of owners agree to the terms of the buy-out.

CBRE executive vice president, John Jaeger, and vice president, Sam Haddadin, represented the 1400 N. Lakeshore Drive Condo Association and association president Michael B. Arrington in the sale. New York-based DVO Real Estate provided financing. ESG—which owns 1140 N. LaSalle Street and is targeting 2 E. Oak Street, both also in the Gold Coast—plans to make a number of capital improvement to 1400 N. Lake Shore Drive’s lobby, common areas, roof deck and some units.

Completed in 1927 and converted to condos in 2006, 1400 N. Lakeshore Drive offers multiple unit sizes, with 79 percent of the property comprising of studios and one-bedrooms, ranging between 284 and 768 square feet. The remaining 21 percent of the property is two-bed/two-baths or three-bed/two-bath units. The building has received several capital improvements in recent years, including façade repair in 2017 and updated elevators in 2016, and offers a large rooftop deck for residents.

“This is a historic deal for the Chicago multifamily market,” said Haddadin. “There has never been an opportunity quite like this, and, as a result, condo owners were able to achieve a new high water mark for condo deconversion pricing in Chicago.”

The previous blockbuster deconversion in Chicago was River City in the South Loop, which traded last December for a little over $90 million, an average of around $200,500 per unit. With a higher sale price but fewer units, the 1400 N. Lake Shore Drive deconversion works out to over $273,600 per unit, on average. The transaction of the 21-story Gold Coast high-rise suggests that large deconversions are still possible at the higher threshold.