Chicago Salesforce Offices To Be Converted Into Apartments

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A huge transformation could be underway in Chicago's River North neighborhood, as Chicago Development Partners is poised to purchase a largely vacant office building at 111 W. Illinois St.

This decision is in line with two major trends in the US real estate market: turning vacant office space into residential structures and taking advantage of high-vacancy office buildings that are being offered at low prices.

A tentative deal has been struck by Chicago Development Partners, under the direction of seasoned developer Howard Weiner, to purchase the office component of the 10-story building for an estimated $17 million. This amount is a substantial decrease from the $75 million the property brought in in 2015, when Chicago office sales were soaring and the building's vacancy rate was significantly lower.

The deal is not finalized and faces potential hurdles due to high interest rates and other ongoing market challenges that have slowed the pace of real estate transactions across the country. Should the sale proceed, the buyer intends to convert the currently unwanted office spaces into apartments, aligning with a broader trend seen throughout Chicago.

The transaction involves acquiring space on the ground floor and the upper six stories of the building. However, it excludes portions owned by the Erikson Institute, a college graduate school. When the property was listed for sale in May, its office floors were just 22.5% leased, according to Cushman & Wakefield. This high vacancy resulted from Salesforce vacating a significant portion of the property after consolidating its offices into the new 60-story Salesforce Tower along the Chicago River.

The planned conversion of 111 W. Illinois St. into residential apartments highlights a continuing trend in Chicago and other cities, where developers are repurposing high-vacancy office buildings into much-needed residential spaces.

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