Pressure on office and residential space in Chicago’s Loop is coming from multiple angles, including the need for older buildings to adapt to modern office requirements:
Kamin said he expects more office buildings to find a second life as hotels or residential towers. “I don’t think there’s a successful path for some of these functionally obsolete buildings as offices,” Kamin said…
The high cost just to acquire a property presents relatively few opportunities for major overhauls, said developer Craig Golden of Blue Star Properties…
The venture took out a nearly $100 million construction loan in 2016, and converted the 20-story building into modern offices, branded as The National — a reference to the property’s 1907 opening as the home of Commercial National Bank.
The developers added the type of distinguishing feature that has helped properties thrive in recent years, creating the sprawling Revival Food Hall on the ground floor. The food hall brings in lunch crowds from throughout downtown, adding to the building’s vibrancy. Office tenants include co-working firm WeWork and the headquarters of Paper Source.
I have heard that it is often cheaper for companies to build a new big box store than to reuse and/or renovate one built by another company. Thus, problems with vacancies when companies close locations. Could the same be true for downtown office buildings – the cost of renovation is too high? I find this a little hard to believe given the difficult process that can ensue in order to construct a sizable building in a major city.
Similarly, the strategy of adding enticing dining options echoes what is happening with shopping malls expanding beyond retail to dining, residences, hotels, and a variety of entertainment establishments. The goal is to both promote multiple uses but also cross-traffic between organizations and business as people need to work, eat, enjoy life, and sleep.
Perhaps we will know there is really a problem when multiple older structures are torn down to make way for new buildings.