A condo deconversion is a real estate transaction in which a savvy investor acquires an entire condo building through a bulk sale to turn into rentals. This investment trend has been seen in Florida and California for a number of years and is picking up steam in other coastal metros and even in the Midwest. In Chicago, where my firm consults, markets and leases condo deconversion transactions, we have seen an increase in international investor groups exploring these opportunities. Condo deconversion is a great alternative to ground-up new construction or repositioning an already existing multifamily asset.

The majority of condo deconversions are in prime locations with great access to neighborhoods, nightlife, dining and cultural attractions.

The biggest hurdle in converting a current condo building to an apartment building is securing enough votes from a condo association to approve the conversion. These are complicated and challenging deals, often taking years to close. However, the payoff can be significant with a sound business plan and team to help execute.

Here are five key elements to consider when planning a condo deconversion leasing strategy:

Respectfully Rebrand

Often, a large-scale condo has a storied history, possibly involving a notable architect, recognizable exterior or catchy name. When rebranding and repositioning the property, it’s important to find a balance between the old branding and new identity. For example, at one well-known property in the growing South Loop market of Chicago, we kept the original building’s name but modernized the logo. The property’s branding and messaging were far ahead of its time, and we wanted to honor the original vision. This kind of acknowledgment is well received, especially if your building’s current residents take great pride in their home and never planned to be tenants. Having them as allies through the process is helpful. By not changing the name or identity too dramatically, you will have a better chance of helping current residents feel like they are part of the process.

Build Excitement

Once you have rebranded, it’s important to build excitement with the right audience. This includes the current residents who may become your long-term tenants as well as potential residents who are often looking for an alternative to a cookie-cutter new apartment building. It’s important to find the unique features of the property: larger square footage, unique duplex layouts, custom finishes. Renters do still gravitate toward renting a condo over an apartment because they want something unique; however, when renting from an individual landlord, the level of service is an unknown. A condo deconversion provides renters with the best of both worlds. They can enjoy the size and location of a deconverted condo building with a professional multifamily management company. Capturing this audience early in the process with sneak peek renderings or a “VIP resident event” will get the buzz going slightly ahead of leasing.