From Offices To Short-Term Rentals: Transforming An Underutilized Chicago Space Through Adaptive Reuse

Cities across the country are embracing adaptive reuse to breathe new life into underutilized office space, and Chicago has been among those leading the charge.

In 2023, Chicago had more than 3,500 apartments in the pipeline through office-to-residential conversion, putting it only behind Los Angeles and New York. 

Office-to-hospitality projects are underway in other major U.S. cities, but while these projects may seem like the perfect solution to the widespread problem of vacant office spaces resulting from shifting work habits, they also come with unique challenges. 

“Not every vacant office building is a candidate for a hotel conversion,” Steve Smith, senior vice president at Chicago-based Leopardo Construction, told Crain's Chicago Business.

“The configuration of the floor plate, availability of natural light and efficient layout of the common areas are key factors,” Smith added. “Typical floor-to-floor heights in existing office buildings are greater than new hotel construction, and high-rise office buildings are already equipped with adequate vertical transportation and emergency exit requirements.”

Despite these challenges, Smith told Crain's the centralized urban location of office buildings also makes them the perfect location for hotels. Additionally, adapting older buildings into hotels offers guests a more authentic, captivating experience while allowing owners and developers to take advantage of a host of incentives offered by government agencies that can offset costs, he said. 

This work isn't for the inexperienced, however. That is why Smith recommended working with a company like Leopardo, which has extensive adaptive reuse experience, including with historic landmark projects. 

Leopardo is converting the office floors of Group Fox's Axis Tower in downtown Chicago to 101 apartment units. The space will be operated by Sonder, a short-term rental company that specializes in apartment-style rentals. 

Leopardo is uniquely positioned to tackle the challenges that come with a project like this, thanks to its extensive experience, including the transformation of 226 W. Jackson Blvd., a turn-of-the-century high-rise office across the street from the Willis Tower that the company converted into a 350-unit hotel with a rooftop restaurant.

The company is also working on 45Erieview, an office-to-multifamily adaptive reuse project under construction in Cleveland. Once completed, the former AT&T headquarters will feature 367 apartment units, community and retail spaces, a fitness area and a rooftop amenity space with an outdoor pool and hot tub.

Leopardo Senior Project Manager Baris Gocmen told Bisnow that when it comes to adaptive reuse projects, collaboration between all of the stakeholders is imperative, and the earlier a contractor can be brought into the process, the better. Leopardo's resources help navigate the myriad issues the project team will face during the pre-construction process. 

For the Axis Tower project, Leopardo collaborated not only with external stakeholders but also internally with the project's safety, quality control and virtual build group.

Leopardo Project Manager Gavin Byrne said that one of the first hurdles the company worked through was how to rebuild an existing sloped curtain wall system to address outside air requirements and install a terrace deck.

“A major challenge was how to sequence demolition of the existing curtain wall and installing the new window wall system in place that creates the new exterior envelope, all while continuing to build out the interior units simultaneously,” Byrne said. 

Determining if the existing mechanical, electrical and plumbing systems can be reused, modified or replaced was also a debated topic, as it is with all adaptive reuse projects, Byrne said. Leopardo has been working closely with the Axis Tower design team to install a new cooling tower that services this building and a connected building.

“It’s a very complex and detailed process to shut down the existing cooling tower, safely remove it and install the new one to ensure services are restored with minimal interruption,” Byrne said. 

The project team also had to determine the best way to meet Chicago’s venting requirements. To avoid installing a new outside air intake system, which would have added significant costs, the team researched alternative approaches such as installing skylights with operable functionality that would also meet ventilation requirements.

The project includes a complete lobby renovation that must be executed without disturbing the childcare facility and medical office space that occupy the building’s first floor. The lobby will remain operational during construction. 

Byrne said Sonder’s unique business model, which offers apartment-style short-term rentals, features units ideal for traveling medical professionals coming to Chicago to work at one of the many world-class hospitals nearby. Additionally, it future-proofs the property by allowing these hospitality units to be easily converted into market-rate apartments.

The bulk of the project is expected to be completed in summer 2024. 

“The key is to think beyond today and toward how the building will be used tomorrow,” Gocmen said. “That type of thinking, combined with a collaborative, communication-driven approach, leads to successful outcomes.” 

This article was produced in collaboration between Studio B and Leopardo. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.