Newcastle Investors Proposes Office Conversion in Chicago

Chicago-based Newcastle Investors is the latest developer to join the city’s growing wave of office-to-residential conversions, this time targeting a 116-year-old brick-and-timber building in the Clybourn Corridor.

The firm requested a zoning change to convert the top three floors of its four-story, 37,000-square-foot building at 1500 North Halsted Street into 31 apartments, while retaining ground-floor retail occupied by Ethan Allen, Crain’s reported.

The former upper-floor office space was most recently home to a Spaces co-working facility.

Newcastle acquired the property in 2014 for $8 million ($216 per square foot) and will need City Council approval to rezone it for residential use.

Though modest in scale, the project underscores a broader shift in Chicago’s urban fabric. Developers are repositioning outdated commercial buildings for residential use amid lower demand for office space and high demand for apartments.

Newcastle’s plan follows a similar conversion a few blocks away at 811 West Evergreen Avenue, where Honore Properties won approval in October to turn a loft office building into 47 residential units.

The area surrounding North and Clybourn avenues is already one of the city’s strongest retail corridors, with dense residential growth, multiple mid-rise apartment buildings and recent proposals for towers pushing toward 40 stories. Residential demand in the neighborhood has kept rents near historic highs, offering developers a strong incentive to pursue conversions even without the public subsidies being deployed downtown.

Unlike Loop conversion projects benefiting from the city’s $250 million LaSalle Street Reimagined initiative, Newcastle’s proposal is entirely private and not part of a formal program.

Founded in 2006, Newcastle is better known for owning and operating large-scale properties such as a 35-story apartment tower at 845 North State Street, and the 227-unit building at 504 North Green Street, which it bought for nearly $86 million in 2019. The firm also owns assets in Fulton Market and has increasingly dabbled in ground-up development.

If approved, the Halsted conversion would further expand the Clybourn Corridor’s role as a testbed for neighborhood-scaled adaptive reuse outside the Loop’s subsidy orbit.

— Judah Duke