A Chicago firm plans to switch uses for a River North building that it bought out of financial distress, adding to a wave of office-to-residential projects in the area just north of the Loop business district.
Monroe Residential Partners said it will start converting the century-old building at 401 W. Ontario St. into 57 apartments in the fall after remaining office leases expire.
The deal continues the trend of vintage, high-vacancy properties in the area selling to developers looking to convert them to apartments.
That movement has come as office owners facing large vacancies and high property taxes have been unable to pay off loans and as developers have sought out properties to convert to apartments amid Chicago’s strong rent growth and an undersupply of new units in high-demand neighborhoods such as River North.
“Many of these buildings just no longer work as offices,” Drew Friestedt, a principal at Monroe Residential Partners, told CoStar News. “The next logical use is residential.”
Monroe and an affiliate general contractor, 3F Construction, have extensive experience with conversions in Chicago and other cities. The residential-focused firms are owned by Friestedt and Michael Obloy.
In another River North project, Monroe is an investor and 3F is the general contractor in Mo2 Properties’ conversion of the former office building at 116-122 W. Illinois St. into 36 apartments.
Other developers’ projects include Concord Capital’s conversion of a former shoe factory at 233 W. Erie St. into 66 apartments. That property had operated as an office building in recent decades.
The four-story building on Ontario recently sold for $5.43 million, according to an announcement of the deal by Greenstone Partners, which represented the buyer in the deal.
‘Gentlemanly process’
Chicago-based Conlon & Co. bought the building for $6.5 million in 2015 and refinanced the property with a loan of more than $6.4 million in 2017, according to Cook County property records.
The firm led by longtime real estate investor Sean Conlon was hit with a foreclosure suit in October 2024, sending the property into financial receivership. The balance on the commercial mortgage-backed securities loan was just under $5.8 million before the sale, according to CoStar loan data.
Conlon said the lender never foreclosed on the property, and the deal with Monroe was a lender-approved sale.
“I worked with the receiver,” Conlon said. “It was a gentlemanly process with no drama, no foreclosure.”
Friestedt said the building’s layout and location are ideal for a conversion.
The project is expected to cost about $20 million including the acquisition cost, and it will take about a year to complete, he said. Work is expected to begin around October, after all tenants have moved out of the building, Friestedt said.
“It’s a great location in River North, and we think there is a good balance between supply and demand in the city,” Friestedt said. “This location warrants a conversion.”
For the record
The buyer was represented by Greenstone Partners broker Jordan Multack. The seller was represented by Frontline Real Estate Partners brokers Matt Tarshis, Andrew Rubin, Zack Pearlstein, Andrew Picchietti and Andrew Slovis.