A low-rise River West building has been targeted for Chicago’s next office-to-residential conversion.
Local firm Tandem aims to redevelop the 42,000-square-foot loft office building at 1040 West Huron Street into 32 residential units, Crain’s reported.
Tandem built the adjacent 23-story apartment building in 2019, opting to reserve the three-story building for commercial use. But one year later, the pandemic ignited the remote-work era, pummeling Chicago’s office sector and driving up vacancies to record highs in 11 of the last 13 quarters.
A beleaguered office sector prompted Tandem’s decision to convert the property into residences, which has become an increasingly common trend in the Chicago area.
“We’ve been trying to lease the building for a long time, and we just need to do something else, so we’re following what a lot of other developers are seeing, that residential is a better path at this point,” Tandem’s Chris Walsh told the outlet.
The building is roughly 33 percent leased by three tenants, including Tandem. Conversely, the apartment high-rise next door is almost completely occupied, shedding light on two real estate sectors moving in opposite directions.
While office-to-resi conversions are a practical choice for many landlords, they can be difficult to pull off. Floor plates and other design elements aren’t always conducive for such conversions, and they’re often quite expensive.
Tandem’s project is feasible, though, as it primarily involves interior remodeling, making it a relatively straightforward endeavor, Walsh said.
The resi development will complement Tandem’s adjacent apartment tower, Avenir, offering similar amenities but with slightly larger floor plans due to the loft layout. It’s slated for 24 one-bedroom units and eight two-bedrooms, with six units allocated for affordable housing to comply with city regulations.
Pending approval, construction is slated to start in the fall, with completion expected by May 2025.
—Quinn Donoghue
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