A Chicago-based real estate investor and developer, Robert Palley is a co-founder and partner at Granite Realty Partners, LLC. Since 1998, he has helped guide the firm’s real estate investment and development projects, overseeing more than $750 million in property purchases and developments. Drawing on his background in finance and property acquisition, Mr. Palley has deep expertise in areas such as condominium deconversion and capital structuring. Before establishing Granite Realty Partners, he served as vice president of Jupiter Realty Corporation, where he led the development of major retail projects. He earned both his bachelor’s and master’s degrees from Northwestern University.
Why Choose a Condominium Deconversion?
While the owner of an apartment building may choose to convert the units into condos, a condominium association may also decide to pursue a deconversion. A condominium deconversion involves the sale of all units in an existing condominium building to a real estate investor through a bulk sale. The investor then converts all of the units into rental apartments.
Condo deconversions have long been commonplace in states like California and Florida.
Chicago is among the notable cities that have experienced a recent surge in condo deconversions. Deconversions have also risen in popularity in Arizona. This nationwide deconversion trend has partly reversed the direction of the market during the condo “boom” in the years leading up to the financial crash of 2008.
Condominium associations may choose deconversion for any number of reasons. They often do so to take advantage of a cycle of rising demand for scarce apartment housing and associated higher offers from potential investors. Condo associations may also pursue deconversion to alleviate the costs for maintenance and code upgrades that become increasingly necessary as a building ages.
As condominium associations face the high costs of deferred maintenance on 30- and-40-year-old condominium buildings, as well as an increasingly intricate web of regulations, the return on their investment through a condo deconversion can mean a financially secure-and less stressful-fresh start. Some individual owners may prefer a best-of-both-worlds arrangement that includes an option allowing them to continue living in their units as renters.
Because every condo deconversion entails complex financial and legal negotiations, condo associations will want to work with real estate investment firms with expertise in this specific area.
About Robert Palley
Robert Palley is a Chicago-based real estate developer and co-founder of Granite Realty Partners, LLC. With more than 25 years of experience, he has led investments exceeding $750 million and guided projects in acquisition, financing, and development. Before founding Granite Realty, he served as vice president at Jupiter Realty Corporation and previously worked with the Levy Organization. A Northwestern University graduate with degrees in biology and finance, Mr. Palley is a recipient of the Service Corps of America SBA Consulting Award and remains active in his community and professional circles.