Samarth Narang, a resident of the South Loop’s historic building at 820 Michigan, is just beginning to explore the vibrant past of his new home, an official Chicago landmark that once served as the headquarters of the Johnson Publishing Company.
He reflects on the building’s legacy of publishing iconic magazines like Ebony and Jet, which emerged in the 1940s and ’50s.
The building’s history is now complemented by modern living, as it has recently been converted into apartments through the efforts of Rosemont-based 3L Real Estate after the building was purchased in 2017.
Narang appreciates not only the colorful history but also the strategic location of 820 Michigan, just steps away from essential amenities such as grocery stores and train stations as he commutes for work in Indiana.
However, Narang is not alone in his enthusiasm for downtown living.
City officials and developers alike are promoting a series of office-to-residential conversions as a solution to transforming downtown Chicago into a thriving multi-use neighborhood, blending commercial, residential, and office spaces.
According to research from the commercial real estate agency Bradford Allen and public records, there are at least 11 planned conversions set to enhance residential options in the city.
Quintin Primo, founder and executive chairman of Capri Investment Group, estimates that approximately 3,600 new apartments are in the pipeline, attributed to the La Salle Corridor Revitalization initiative and developments in attractive areas like Fulton Market.
As of 2022, the Loop contained around 30,342 housing units, while downtown Chicago boasted a total of 140,394 residential units, as reported by the Chicago Loop Alliance.
The conversation surrounding office-to-residential conversions is part of a broader trend aimed at revitalizing older buildings, which often require creative solutions to draw new life into otherwise underutilized spaces.
Primo’s Capri Investment Group is also collaborating with the Prime Group to redevelop the former Cboe Global Markets headquarters viably into a data center following a $12 million acquisition.
A report from CommercialCafe highlights that Chicago ranks second among the 30 largest U.S. cities in terms of the amount of office space eligible for residential conversion, estimating that nearly 27% of the city’s office stock has substantial potential for such transformations.
Despite this high-level estimate, experts caution that the actual viability of conversions depends on various factors, including financing challenges, rising interest rates, architectural hurdles, and bureaucratic red tape that can often constrain developers.
Primo, however, expressed a belief that the 27% conversion potential may actually underestimate the possibilities, suggesting that there’s a greater pool of assets suitable for transformation than generally recognized.
Lee Golub, Managing Principal at Golub & Co., countered the assertion regarding conversion potential, stating that while some buildings could work as residences, the financial viability of many of these options remains suspect.
Golub pointed out that a significant number of properties deemed eligible for conversion are often in locations less conducive to residential living, coupled with soaring construction costs that complicate development efforts.
In light of these obstacles, developers often find that the expense of converting an office space can sometimes rival that of constructing a new building from the ground up.
Note that older buildings pose their own set of risks.
Medieval materials such as terracotta and limestone are typical for structures across Chicago, but these materials can be costly to repair or upgrade.
Andy DeMoss, the executive managing director of Bradford Allen, emphasized that alongside physical constraints, significant economic incentives, such as tax-increment financing, would be necessary to facilitate more office conversions.
Despite the, challenges, city officials outline ambitious goals for housing in response to rising vacancies in commercial properties that developed after the pandemic.
In particular, City Hall has projected that 1.3 million square feet of vacant office space will be successfully transitioned to housing, including units designated for affordable housing under the La Salle Corridor Revitalization program.
In addition to the focus on La Salle, districts like Fulton Market and River North are emerging as programs for conversions that aim to attract new residents to the area.
Fulton Market, for instance, has seen a successful transformation of old warehouses and industrial structures into contemporary loft-style offices and apartments, spurring further developments.
Two proposed residential towers on Fulton Street aim to add over 1,000 new units, which complements the trend of revitalizing previously underutilized spaces in burgeoning neighborhoods.
In River North, anticipated projects at 111 W. Illinois St. and 116-122 W. Illinois St. may commence work shortly, illustrating the city’s robust commitment to conversion strategies.
Chicago’s Department of Planning and Development Commissioner Ciere Boatright noted that the city is encouraged by developers eager to recognize and embrace the redevelopment potential of these historical buildings.
According to Boatright, the city remains cautious concerning potential repercussions on property tax revenues resulting from such conversions.
In Cook County, residential properties are taxed based on 10% of their assessed value, while commercial sites incur taxes equal to 25% of their value.
Additionally, with rising office vacancies, a larger share of Chicago’s property tax burden has shifted away from the Loop itself.
Boatright remains optimistic and indicates that since only a select number of buildings are designated for conversion, the overall impact on tax revenue should be manageable.
Indeed, many stakeholders involved in these conversations point to the importance of creating a vibrant neighborhood that thrives beyond traditional work hours.
Narang, for one, supports initiatives like La Salle Corridor Revitalization, viewing them as essential to bringing more inhabitants into the heart of the city.
In contrast, Ainhoa Ortiz, a three-year resident of 820 Michigan, chose her home for practical reasons rather than historical ties, emphasizing that rent rates and location, rather than legacy, primarily drew her to the building.
She similarly lauds revitalization programs as beneficial for increasing housing availability and affordability in downtown Chicago.
The commercial real estate landscape is adapting, with expectations for office occupancy rates to rebound as many firms have reconsidered their office space needs.
The first quarter of 2025 saw a leasing figure of 1.7 million square feet of office space, reflecting a sharp decline from the previously set 2.3 million square feet during the end of 2024.
While demand for newly constructed office properties with appealing amenities remains strong, DeMoss believes older, largely vacant buildings still hold significant promise for conversions into alternative spaces—be they apartments, data centers, or self-storage facilities.
Flexibility appears to be key for the city moving forward as urban buildings take valuation hits, according to Shawn Ursini, a senior manager with the Council on Tall Buildings and Urban Habitat, who stresses the importance of adaptable zoning regulations to facilitate building conversions.
Golub noted a promising trend of private investment returning to Chicago’s real estate market.
Historically, local developers executed many prominent conversions, this is starting to shift as outside developers are beginning to recognize opportunities amidst rising rental incomes forecasted across the city.
One example is the planned adaptation at 500 N. Michigan Ave., where Connecticut-based Commonwealth Development Partners are set to create over 300 apartments by transforming a 24-story office tower.
This particular project expedited its review process, successfully moving to the Chicago Plan Commission in less than 35 days, showcasing the city’s drive to streamline development processes.
City officials are committed to fostering both local and out-of-state developers’ efforts, ensuring that Chicago thrives as a mixed-use urban landscape of residential, office, and retail spaces.
As Boatright aptly points out, the post-pandemic era may reshape downtown into a landscape that reflects a diverse array of living, working, and shopping environments, in line with the evolving needs of residents and employees alike.
image source from：https://chicago.suntimes.com/real-estate/2025/04/25/office-residential-conversions-apartments-housing-downtown
