Industry Insider: Reuse a hot construction trend
The more complicated the deal, the better, as far as Tom Omundson is concerned.
Omundson relishes figuring out the best use for existing buildings and coming up with new developments for vacant land.
“I love to maximize opportunity with the right use or reuse of property that has intrinsic long-term value because of its high-quality location and unique character,” said Omundson, president of TOCO LLC of Chicago. “And I don’t mind a challenge. I love to find a way to make things like hotels, garages, retail, office and even residential work together in a mixed-use project.
“To me, it is like figuring out a puzzle,” he said. “I enjoy being creative, finding solutions to problems and reusing things and I like working with brick and mortar projects that I can point to and take pride in when they are complete.”
In today’s economic environment, far fewer new construction, urban development projects are being planned and executed, so Omundson, a resident of Evanston, said he spends much of his time redeveloping existing buildings.
“We don’t need to rip down these older buildings that aren’t as functional as they once were. We can convert them to mixed-use structures through adaptive reuse and can actually get them to market much faster than if we were building a new structure from scratch,” he said.
His current projectOmundson is involved in an equity joint venture with Glenstar Properties and Walton Street Capital on the redevelopment of a 1970s-era office building at 55 E. Monroe St., Chicago.Formerly a 50-story office and retail building with a parking garage, when redone it will feature 219 condominiums, over a million square feet of offices, a nine-story parking garage and three floors of commercial tenants.The top ten floors of the building have a separate lobby, elevator bank and address (65 E. Monroe St.) and is known as #147;The Park Monroe.#148; These floors house all of the residential units, an indoor pool, a three-season sun terrace with garden and year-round spa, a fitness center, a Blu-ray theater room and an entertainment suite with catering kitchen.#147;When we purchased the building we knew that a large law firm would be vacating the top floors so we took that opportunity to convert the space to condominiums. We made all of the floors served by the high-rise-elevator bank residential, and in the process we re-skinned the top ten floors, (constructed) recessed terraces for the condominiums and installing full-height glass windows in these units, all of which feature ten-foot ceilings. We wanted to take advantage of our incredible views of the lake, Millennium Park, Buckingham Fountain and the entire city.#147;This is a great infill location for us. It is so close to everything and is located in an area with lots of European character, surrounded as it is by the theaters, the Art Institute (of Chicago), historic buildings and Millennium Park. In addition, you can#146;t replicate our views. There are no other tall buildings around us, so we have a clear view of the lakefront and Chicago#146;s great skyline.#148;The challengesHowever, it wasn#146;t an easy project to complete, Omundson said, because they basically separated one building into two by creating a separate lobby for the condominium project on top. Construction took 18 months and throughout, they maintained their office tenants on the lower levels.#147;We couldn#146;t disturb our tenancy so we had to keep all of the systems working and moving and we could only create so much noise during the day.#148;But it wasn#146;t like they could make noise at night, either, because The Palmer House Hilton Hotel is directly across the street and there are city noise ordinances to consider.#147;It was quite a feat to complete the building on time, maintaining our leases and keeping the garage open. It was a fun and challenging project that I really enjoyed.#148;The Park MonroeResidences range from one to three bedrooms with 13 penthouses, some of which are two stories. Many of the homes feature private outdoor balconies and all have gourmet kitchens with European styling, luxurious baths and premium hardwood floors. Designer touches are obvious throughout.Prices range from $300,000 to $1.5 million for the condominiums while the penthouses cost as much as $2.5 million.#147;We are attracting young couples and singles, empty-nesters who have sold their large suburban homes and some students. Some people work in the Loop while others have purchased the condominiums as their second, #145;city#146; home. We also have a few investors.#148;The largest, priciest units face east toward the lake while the smaller ones face west toward the city.His backgroundThe Barrington native grew up in Kansas City and earned an architecture degree from the University of South California, followed by an MBA from Northwestern University.His career began at Urban Investment and Development Co., a national real estate development firm that was purchased by JMB Realty Corp. in 1984. Omundson continued to move up the ranks at JMB, working in the office leasing group and the development group, eventually becoming an executive vice president.In 2000 he started his own company, TOCO, but has maintained close ties with JMB and other firms with which he has worked, including his two partners in The Park Monroe.Glenstar Properties manages The Park Monroe and the 40 stories of office space. Walton Street Capital is the managing and majority partner. TOCO planned and handled the redevelopment and put the deal together.#147;I realized after graduate school that I liked the business part of real estate better than the architecture part. This way I get to hire the architects and tell them what to do and I understand what I am looking at when they are done.#148;