Chicago’s Clark Adams Building is among those undergoing office-to-residential conversions.
Pappageorge Haymes
A recent study found 88% of Americans notice vacant or underutilized office buildings in their area. The study, by Investment Property Exchange Services, Inc., also known as IPX1031, a qualified intermediary specializing in 1031 tax-deferred exchanges, also found two-thirds believe vacant offices hurt local economies. Yet another finding: When it comes to the most popular uses for converted office buildings, people most want them to become affordable housing (37%), with small businesses a distant second (19%).
Conversion of old office buildings into multifamily housing isn’t a new idea. But it is a much-needed one. According to the Commercial Real Estate Development Association, the nation will require 4.3 million more rental units by 2035 to match the anticipated demand. At the current pace of new construction, that goal can’t possibly be met.
Chicago is among major U.S. cities making “no little plans” for the conversion of offices into housing. By some reports, more than two dozen projects are underway in an unprecedented wave. In 2024, Chicago’s 880 led the U.S. in number of apartments created via adaptive reuse endeavors.
This year, downtown Chicago is expected to benefit from 806 apartments developed through adaptive reuse projects. Another 3,921 units are proposed. The restoration and residential conversion of the city’s historic Pittsfield Building at 55 E. Washington Street is one such adaptive reuse project.
Unique opportunities
Among others are The Clark Adams Building, aka the Bankers Building, a 1927 asset now being converted to 400 residential units; The Pontiac Building, an historic Printer’s Row structure whose dozen office floors will become 74 units of multifamily housing; and 79 W. Monroe Street, a LaSalle Street corridor building where 117 mixed-income housing units – 41 affordable — will replace seven stories of unused office space. The historic 1928 Millinery Mart Building, also called 65 East Wacker, is in the finishing stages of a project that will convert office space into a 252-apartment multifamily community. Finally, a project at 30 N. LaSalle Street, also located on the LaSalle Street corridor, will convert 432,000 square feet of office into a 432-unit apartment building.
“The post-Covid downturn of commercial real estate evident in Chicago and many other great American cities has created a challenging market,” says Robert Harris, LEED Green associate and senior associate with Pappageorge Haymes, overseeing conversion of the Pittsfield Building, the Clark Adams Building and 65 East Wacker. “[It] has made these properties, including historic building stock, unique opportunities for adaptive reuse, particularly when reimagined as multifamily residential conversions.”
A topnotch conversion project, especially when preserving an historic landmark, helps secure beloved urban built environments for future generations, he adds. “[It] preserves the built fabric of a streetscape that has contributed to the character and identity of a neighborhood over many generations, giving residents and visitors a genuine sense of place that new construction often cannot,” Harris adds.
Digital tools
The unparalleled streak of adaptive reuse projects, both in Chicago and nationally, has been made possible by advancements in digital design tools. Design software and technology has altered what’s possible in adaptive reuse when compared with possibilities from 20 or 30 years ago, says Miles Smith, senior industry growth and strategy manager for Graphisoft, a software firm whose building information modeling (BIM) solutions serve the architecture, engineering and construction industry. Chicago is a major market for the flagship software of Graphisoft, a product called Archicad.
“One of the biggest adaptations has come around the ability to digitally absorb existing real estate stock,” he says, adding that this capability has rendered the sketch pads, tape measures and field measurements of yesteryear largely obsolete. “We now frequently use LIDAR scanning or similar platforms to digitize buildings. With the rise of AI, these LIDAR scans are becoming more and more usable, and ultimately making the proposition of adaptive reuse far more profitable.”
