But these properties are one of several with large floors over 20,000 square feet along the corridors, and the numbers quickly get complicated. Apartments should be long and narrow units to accommodate windows. Otherwise, developers would end up with large corridors and non-rentable spaces closer to the center of the building. Such building designs are unattractive, and the lower the rent and the more space in the non-revenue-producing building, the smaller the revenue when the developer ultimately sells the property.
“Most of the time, a small floor plate is better than a big one,” says Truman Tolefree, a Rochester, New York-based developer, who designed an old 24-story office building with a 10,000-square-foot floor plate. recently purchased. 65 E. Wacker Place And we plan to convert most of the properties into apartments.
Many of the downtown office buildings that became apartments in the last few decades had a small footprint, said Eleanor Gorski, CEO of the Chicago Architecture Center, in a South Loop landmark now popular for student housing. Some examples include the Old Colony and the Fisher Building.
Meanwhile, a planned conversion to a larger building never materialized: Developers kicked the tires on converting the former Chicago Public School headquarters at 125 S. Clark St. into apartments. After that, the historic building was eventually converted into offices. The floor plate (size) and the cost of overhauling the house,” he says Gorski.
One office property converted to rental units at 29 S. LaSalle St. (a 216-unit luxury condominium now called Millennium on LaSalle) opened last year and is nearly 80% leased, while others provides potential verification points for the project. But it also highlights the risks of reusing old buildings. Developers attempted to add a pool and sports courts to the roof, but planning work went smoothly when they discovered that the 1902 building lacked the necessary wind support systems to hold the wind. was proceeding to Additionally, according to Rick Whitney, Vice President of Architects at Fitzgerald Associates, the design lead for the project said:
“To do that we had to reinforce the building, which took a lot of effort and money,” Whitney said, noting that unforeseen circumstances usually complicate redevelopment of older buildings. Still, he says he’s been getting “interest calls” from developers looking into converting LaSalle Street and expects more. “You just have to find the right conditions to make them happen.”
A spokeswoman for LaSalle developer Millennium, Florida-based DLC Residential, did not respond to a request for comment.
Chicago developer Mike Leschke says there are sensible ways around the design challenges associated with office-to-apartment conversions. Leschke’s venture earlier this year paid his $120 million for the Harris Bank office building, his largely vacant BMO on Monroe Street between LaSalle and Clark streets.rear sell the biggest tower With new offices in Illinois, Leschke is now eyeing a $180 million project that will transform the top 12 floors of a 23-story and adjacent 21-story building into more than 300 apartments.
Helping finances work: He plans to fix a large floorboard problem in a building.
Reschke and other developers believe that public subsidies and incentives, such as TIF funds and historic federal tax credits, will drive the conversion, especially if the project includes affordable units, as Lightfoot wants. It states that it is important to make it financially viable. Offering a steeply discounted rent to his 30% of the units would reduce the property’s future income and reduce the amount the developer would spend on conversions in the first place.
A spokesman for the city’s Department of Planning and Development said in a statement that the developer was “already considering a viable luxury housing conversion project with conventional sources,” and said the city would bear the financial burden. Any affordable unit that can help.
“Without city resources, the shift from monoculture to street office use could lead to upmarket residential investment that is less resilient and sustainable than mixed-income neighborhood environments,” the statement said. says.
Tax incentives work, as demonstrated in New York in the 1990s. City officials have spurred a wave of diversions by proposing significant property tax cuts to developers willing to acquire and repurpose old and vacant buildings in Lower Manhattan.
Nathan Berman, managing principal of New York-based Metro Loft Developers, which is working on New York’s 18th office-to-home conversion, said:
Lightfoot’s effort to transform LaSalle Street from a corridor, where 85% of the commercial space is offices, into a mixed-use district is giving Google one big boost. recently announced Plans to renovate the James R. Thompson Center, create and buy thousands of jobs. The move could attract more businesses downtown, which could stimulate demand for nearby housing.
City planning officials are also looking for new tools to lure more retailers to LaSalle Street and its surrounding blocks. In this city, many retailers are either closed or unable to pay rent as remote work reduces daily traffic in downtown. The Lightfoot administration plans to seek city council approval to provide subsidies to downtown retailers from the Small Business Improvement Fund.
Help may also come from Washington. Congress has announced a downtown tax credit for creating a new tax credit for office-to-residential conversions in the heart of the metropolis, provided developers commit to making at least 20% of their units affordable. We are considering a bill called the Reactivation Act.