Word on the streets around the Magnificent Mile has an East Coast investor ready to buy into Chicago’s future with a hefty discount for a deal on a stretch of the city that has lost its past glory.
In this case, word comes from Alderman Brendan Reilly, who represents the Mag Mile as part of his 42nd Ward on the Chicago City Council, Crain’s reported.
Reilly recently sent a letter informing constituents that Greenwich, Connecticut-based Commonwealth Development Partners has struck a deal to buy the largely vacant 24-story office building at 500 North Michigan Avenue with a residential conversion in mind.
Commonwealth executives didn’t respond to requests for comment on the alderman’s citation of the plan, which would call for 320 residential units.
The building is owned by a consortium of international investors, the outlet reported, citing a source with knowledge of the negotiations. The group paid $86 million for the building in 2018.
Commonwealth is eyeing the office-to-residential conversion as other efforts to reverse the trajectory of Chicago’s downtown — where office vacancies have reached all-time high of 25.8 percent — continue to take shape.
Commercial property owners along the Mag Mile could vote to tax themselves as a business improvement district, after recent approval from the Illinois State Assembly. This BID could fund improvements such as crime prevention and area beautification.
The Mag Mile is already home to one high-profile office-to-residential conversion, at the Tribune Tower. The one-time newspaper office became a luxury condo in a redevelopment that preceded the pandemic.
The Chicago City Development Commission more recently gave a green light to a package of subsidies for office-to-residential conversions in the LaSalle Street corridor of the Loop. The incentives would apply to four buildings that could account for more than 1,000 residential units.
The plan for 500 Michigan Avenue would call for retail on the first two floors, another three floors that would remain office, and the residential units on the remaining 19 upper floors.
The project would need approval from the Chicago Plan Commission and the full City Council.
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