A Connecticut-based developer is looking to convert a Magnificent Mile office tower into apartments, the latest project aiming to reinvigorate empty office buildings downtown.
Commonwealth Development Partners will present its vision for 500 N. Michigan Ave. — which includes adding more than 300 apartments to the 24-story office tower — at the Chicago Plan Commission’s meeting Thursday. The project could help bring more foot traffic to the city’s premier retail corridor as it continues efforts to bounce back after the pandemic. It also comes as office vacancy on the Magnificent Mile continues to rise this year, approaching 20%.
Commonwealth Development wants to convert the upper floors of 500 N. Michigan Ave. into apartments, leaving the ground-floor and second floor for retail. Some of its current tenants include Chick-fil-A, Bank of America and shoe retailer Vans.
The remaining floors of the office tower would be converted to upward of 320 apartments. The developer anticipates converting the building in two phases — the first phase would deliver 238 units, and the second phase would deliver the remaining 82 units. A presentation submitted to the city didn’t specify timing for each phase. Commonwealth Development co-founders Matt Faris and Justin Shaw did not respond to requests for comment.
The developer would make 20% of the units available under the city’s Affordable Requirements Ordinance. Most of those 64 apartments would be affordable to those making 60% of the area median income, which is $53,820 annually for a two-person household.
Market-rate and affordable units would include studios and one- and two-bedroom floor plans.
Plans also include increasing the building height about 20 feet to 322 feet for new rooftop amenities. An outdoor deck would be added to the 24th floor, along with a new indoor-outdoor rooftop amenity space above it.
Building work would be largely interior, the presentation notes. The developer will preserve the building’s historic facade and “enhance the urban design” through lighting, landscape and stair improvements. The developer will also add 68 spaces for valet parking.
Commonwealth Development estimates the conversion project would create 250 to 300 construction jobs and 15 permanent jobs.
500 N. Michigan Ave. was designed by Skidmore, Owings & Merrill and opened in spring 1967. At the building’s opening, the ground floor was an open arcade. It was enclosed in the 1980s to accommodate retail.
The building, across from the InterContinental hotel at North Michigan Avenue and East Illinois Street, is one of many office towers currently facing headwinds. Office vacancy on North Michigan Avenue hit 18.2% during third quarter 2024, according to a report from commercial real estate firm Bradford Allen released Monday.
The office corridor also saw negative net absorption for the third consecutive quarter in a row, meaning less office was occupied at the end of the quarter than the start. North Michigan Avenue ended the quarter with over 60,000 square feet of negative net absorption, Bradford Allen found.
The project would add to Chicago’s pipeline of struggling office buildings turning residential, making way for more residents in the city’s core. La Salle Street is poised to add more than 1,000 new apartments — with over 300 of them affordable — as a part of the city’s La Salle Street Reimagined program. The city projects 1.3 million square feet of vacant space will be converted through the program.