In case you need more evidence that Chicago’s new construction real estate market is still struggling, the financial management company Mesirow Financial Real Estate, Inc., the holder of 659 W. Randolph’s remaining units, is making an effort to sell the condos to a non-for-profit group which has plans to convert the 19 unsold units into housing for recovering mental-health patients. In the plan, these condominiums would be rented out to clients of this non-for-profit group that specializes in mental illness and addiction. What could be the reasoning for such a radical plan? Well according to reports, the Chicago-based financial firm is having extreme difficulty unloading the remaining inventory, citing the recession and severe slowdown in the housing market as the main rationale for the unusual proposal.
What makes this situation most troubling is the effect it could have on the owners already residing in the building. Whether they feel comfortable in this situation or not, at the time of the purchase, a percentage of the Chicago’s West loops neighboring condos weren’t likely to be controlled by an outside party specializing in a field other than real estate-let alone a mental health recovering agency. So what does this do to the property value of the already existing condos that have been sold? The mere fact that we’re talking about this issue and the widespread publicity it’s getting should be a clear-cut sign that it certainly doesn’t help. Another issue relates to the future of the new construction market in Chicago. If this proposal passes and 1 or 2 floors are designated for uses other than conventional homeownership, will this discourage potential buyers to consider high-rise or large projects in the future? One would assume that it almost generates the thinking of “well it happened there, so it can happen here.” So while it is still unclear whether this plan will pass or not, one thing is certain: this controversy has surely opened the door for other developers to follow similar desperate approaches to finally selling off that lingering inventory.
Give us your feedback regarding this controversial issue. How would you react if you already purchased a condominium in 659 W. Randolph? For information on all downtown Chicago real estate, contact Ted Guarnero with Baird & Warner at (312) 810-6693.