Chicago Is Second In Conversion Of Offices To Apartments
Chicago’s population may be declining, but over the past two years the Windy City was second in the nation for conversion of office space to residential apartments.
Since 2020, Chicago has redeveloped 1,135 new rental apartment units by converting old buildings, such as former offices, warehouses and retail stores, reports a new study by RentCafe.com, a nationwide rental apartment search website.
“Of this total, 1,020 new rental apartment units were created solely by repurposing office buildings,” noted Michelle Cretu, a communications specialist with Rent Café. “This is the second-highest number of office-to-apartment conversions in the country, placing Chicago among the top leaders in office redevelopment.”
Since 2020, Washington, D.C. led the nation with 1,091 apartments created through adaptive reuse of office space.
The Rent Café study, based on Yardi Matrix data, revealed that 90% of the Chicago’s 1,135 new apartments were created from office conversions, while 5% come from retail stores, and the balance from warehouses.
Here are details on two former high-rise office buildings in Chicago cited in the survey:
Millennium On LaSalle. This 1960s office tower at 29 S. LaSalle St. in the Loop features a roof-top swimming pool, fitness center, Wi-Fi lounge, a theater room and a dog park. Rents on studio, 1-bedroom and 2-bedroom, 2-bath units range from $1,734 to $2,958, according to Cushman Wakefield, the managers. Apartments have 490 to 1,290 square feet. Kitchens showcase stone counter tops, stainless-steel appliances, Italian cabinets and an in-unit washer/dryer is standard. Call: 312-637-4182 for more information. “This conversion illustrates that part of what makes adaptive-reuse projects so attractive is that the old buildings remain part of the existing architectural fabric, while being completely reinvented at the same time,” the Rent Café study reports.
Century Tower. Built as offices and a bank building in 1930, this famous building at 182 W. Lake St. in the Loop currently houses 292 new rental apartments created through adaptive reuse. In 2006, Century Tower was converted from office space to luxury condominiums by American Invsco, and up to 75% of the original condo owners were investors. This actually benefited the property’s deconversion from condos to rental apartments in 2018, when Golub & Co. purchased Century Tower for $60 million and upgraded the building.
Amenities now include a media lounge, business/study lounge, fitness center, Peloton bike studio, yoga studio and event space. Rents on studio, 1-bedroom, 2-bedroom and 3-bedroom layouts with 393 to 1,856 square feet range from $945 to $2,450. Golub currently is offering one month’s free rent for tenants who sign a 12-month lease. Call: 833-270-3366 for more information.
Adaptive reuse booming
Despite the pandemic, adaptive-reuse apartment conversions are booming nationwide with a record 20,100 new units to be completed this year in 151 repurposed old buildings.
“Most of these units come from office redevelopments, a trend that began before the pandemic, hinting at how things may go if work-from-home arrangements continue,” noted Cretu.
“Office buildings have become the most frequent type of building to be converted since 2010, even though they are more costly to convert than hotels,” said Emil E. Malizia, Ph.D., CRE, of the Department of City & Regional Planning at the University of North Carolina at Chapel Hill. “This outcome can be attributed to their ample supply in urban locations where demand has been strong.”
In addition, Malizia said: “Perhaps the most compelling reason to choose adaptive reuse for apartments versus new apartment construction is the lower environmental impact, especially if demolition is involved. Adaptive reuse mitigates climate changes; demolition and new construction do not.”
Cost savings utilizing adaptive reuse also can be huge and boost affordable housing. “Renovation could cost about 30% to 40% less than new construction for the same number of units,” Malizia said.