New Mag Mile Office-To-Residential Conversion Proposed As Chicago Accelerates Downtown Reimagining

A largely vacant office building on the Magnificent Mile may become an apartment building as Chicago further establishes itself as a U.S. leader in office-to-residential conversions. 

Commonwealth Development Partners, a Connecticut-based developer and investment firm, is aiming to convert most of 500 N. Michigan Ave. into 320 units, Crain's Chicago Business reports. The company is under contract to purchase the 24-story building from a group of international investors that put it on the market in 2022, sources told Crain's. 

Commonwealth's proposed project would convert floors six through 23 into residential units while adding rooftop amenities and a terrace, while the first two floors would remain retail and commercial space, Crain's reports. Floors three through five would remain office space, and the building's height would grow from 303 to 321 feet.

The project would be the latest in a string of conversions in Chicago as the city looks to repurpose office stock that continues to hit record levels of vacancy.

Chicago has the fourth-most planned office-to-apartment conversions in the U.S. this year, trailing only Washington, D.C., New York City and Dallas, according to a RentCafe report from February. Chicago developers are set to bring 2,822 new apartments to the market via adaptive reuse of old office space.

The Mag Mile has already seen a major office-to-residential conversion at the Tribune Tower, where the former newspaper office was converted into luxury condominiums.

In April, Mayor Brandon Johnson pledged just over $151M in tax increment financing from the city to aid developers planning to transform four struggling office buildings into apartments as part of the LaSalle Street Reimagined program. The initiative, which former Mayor Lori Lightfoot kicked off in September 2022, would convert four aging office buildings into 1,000 housing units. 

The proposed conversions are: 

• 111 W. Monroe St., a $203M project that would deliver 345 apartments developed by The Prime Group and Capri Investment Group.
• 79 W. Monroe St., a $64.2M project that would create 117 units developed by Campari Group.
• 30 N. LaSalle St., a $130.2M project that would deliver 349 units developed by Golub & Co.
• 208 S. LaSalle St., a $203M project that would create 226 units developed by The Prime Group.

Johnson's aid proposal is stripped back from the $260M Lightfoot had proposed allocating to five projects.