Real estate developers are eyeing the office glut in Chicago's River North neighborhood for residential makeovers, with two projects potentially adding over 100 apartments to an area heavy with unoccupied commercial space. The move comes as Chicago continues to grapple with a post-pandemic downturn in office demand.

According to the Chicago Sun-Times , Mo2 Properties intends to transform a loft-style office building at 116 W. Illinois St. into 36 residential units. The building, a staple of the Boylston family's holdings for over a century, is currently 60% empty. The ground floor retail space will remain unchanged as Mo2 believes it to still be a viable asset. Ken Motew of Mo2 sees this conversion as a pivotal step towards rejuvenating the River North area where office vacancy rates have reached 24.8%.

Meanwhile, across the street, the site of Salesforce's old offices at 111 W. Illinois St. is also under the spotlight for residential redevelopment. Chicago Development Partners is considering a deal to purchase the office portion of this property, which, based on marketing materials from Cushman & Wakefield, could accommodate up to 145 apartments. This information comes via Crain's Chicago Business , adding to the narrative that the demand for residences in the area is up while office space is facing a severe downturn.

Construction for the Mo2 Properties project is expected to start in May 2025 and the completion is slated for the following year, with plans including one- and two-bedroom market-rate apartments. "I think that it’s a good thing that [Chicago is] allowing the conversion of office buildings … into residential, which is adding a lot of units to the downtown area," Ken Motew told the Chicago Sun-Times . The former Salesforce office conversion, however, has yet to cement a closing sale, keeping the project's timeline open-ended. Dougal Jeppe of Colliers anticipates the likelihood of the conversion occurring due to the large volume of vacant office properties.

Chicago isn't new to this trend of reinventing space usage. The city itself, through the La Salle Street Reimagined program, is facilitating the conversion of outmoded office buildings to residential spaces, including creating over 1,000 new apartments along the La Salle Street corridor. This forecast, among other developments such as the 320 apartments planned for 500 N. Michigan Ave., reflects a broader strategy in repopulating the downtown core with long-term residents.