With its first office-to-housing project complete, Chicago advances the ‘next chapter’ for its downtown

City leaders gathered in the heart of downtown Chicago last month to mark a milestone: the first completed office-to-housing conversion project in the central business district known as the Loop.

Using $28 million in city tax increment financing and a historic designation that unlocked $7.8 million in federal tax credits, the developers of the 14-story Rector building converted 11 unused office floors into 117 residential units, 41 of them for households in the 60 percent median income.

Now known as the Bellwether, the 121-year-old building is the first of six office conversion projects the city’s Department of Planning Development is considering under the LaSalle Street Reimagined initiative to convert unused office space into 1,765 units of mixed-income housing.

“The Bellwether is at the forefront of downtown office conversions that are reimagining what it means to … live, work and play in the heart of Chicago,” DPD Commissioner Ciere Boatright said in a press release.

The initiative comes amid a shortage of affordable housing and vacant office space in the city centre.

As work habits change post-pandemic, adaptive reuse projects for office buildings are having a moment in major cities across the country. New York City and Washington, DC, lead the way, with Chicago’s efforts ranking third, according to RentCafe.

Outside of city-backed initiatives, Chicago has nearly two dozen private office building conversions in the pipeline that are expected to create nearly 4,000 new residential units.

Bellwether’s completion “demonstrates what’s possible when we look at historic downtown Chicago assets with fresh eyes and invest in their next chapter,” Gary Stoltz, a partner at developer R2, said in a statement. “This project reflects our belief that the future of the Loop will be defined by a dynamic mix of people who live, work and spend time here.”