The Chicago increase in condo buildings switching to rentals, has continued to happen during the booming rental market. With many downtown high-rise buildings converting, it is no surprise that another one has followed suit. The Catalyst condominium project located in the West Loop at Washington and Desplaines, joined the long list of converters today.
This will add to the eight other rental buildings planned for release, along with three already under construction. They are expected to hit the downtown market in the upcoming months or years, possibly making it a total of 4600 new rental units. Astoria Tower and Lexington Park (located in the South Loop) also announced the flip of over 500 units, to rentals this year. The switch of Catalyst, would add about 220 more units.
Gary Rosenberg, President and CEO of Chicago-based Urban R2 Development Co., is the developer who planned to build the 21-story condominium building (630 W. Washington) as condos, prior to the market plunge. It is a sleek building designed by Lucien Lagrange Architects. But due to the recent downturn in new construction condo sales and the upswing in rental activity, he felt it was his best move.
According to Appraisal Research Counselors, rents in the downtown class-A apartment buildings rose 7.2% in 2010. But they anticipate more rent increases to occur this year, making it attractive for developers to convert.
The upside for real estate sales is many of the current renter’s may soon decide to buy, when they find the rent vs. own figures, make it more attractive. While many may need to continue renting until job security heightens and lending loosens, the renter’s who decide to purchase, could find themselves saving money.
Only time will tell, but is the rental market now becoming saturated? Weigh in and post your thoughts.
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