Report cover courtesy City of Chicago

The shift away from the five-day office work week was already causing vacancies in big downtown office buildings across U.S. cities before the COVID-19 pandemic accelerated the trend. As Americans shift to hybrid schedules in downtown office markets, large tech companies aim to create office buildings with amenity spaces that rival residential towers to try to entice workers to come back. Still, downtown office vacancy rates have remained stubbornly high, with some as much as 80%. The answer for cities such as Chicago, Boston, New York and Denver has been for state and municipal governments to help private developers reposition office buildings into residential towers.

Boston expects such conversions to create 1,167 apartment units by 2026. More than 30 projects are proposed for a $570-million bond district involving residential conversion of office properties in Denver, including the Wells Fargo Center, formerly known as the Cash Register Building. And Chicago is focusing its LaSalle Street Reimagined program on the once-bustling LaSalle Street corridor near its financial center. The street that once boasted several bank headquarters within its footprint but has become a victim of more online transactions as well as the desire to work from home.

Schematic courtesy of SCB

Photo courtesy of SCB

The office floors of the former Field Building will become 386 residential units, while its more open floor plates will become shared amenity spaces. The mechanical penthouses on its “shoulders” will also become amenity spaces. Its arcade level will remain retail, but with a refresh.

Regilding Chicago’s Office Buildings

Contractor Leopardo Cos. recently started work on the first project in LaSalle Street Reimagined, 79 W. Monroe, based on a design by architect Ware Malcomb to turn the historic Rector Building into 117 apartments. Other projects include 111 W. Monroe and 13 5 S. LaSalle St., a 1934 Graham, Anderson, Probst and White design, which had been the headquarters of LaSalle Bank and Bank of America. The program aims to add more than 1,000 residential units to the area by offering tax-increment financing (TIF) incentives and other city help to developers. 79 W. Monroe received $28 million in TIF funds and 135 S. LaSalle, originally the Field Building, received $98 million for its conversion under the program started by former mayor Lori Lightfoot in 2022 in the wake of the pandemic. Chicago is requiring at least 30% of the units across all the projects to be affordable and available to households earning up to 60% of the area median income, or $43,800 for one person and $62,520 for a family of four.

135 S. LaSalle’s conversion, based on a design by SCB (formerly Solomon Cordwell Buenz), is expected to start later this year and is the biggest job in the LaSalle Street Reimagined portfolio. AmTrustRE, Riverside Investment and Development and DL3 Realty are the developers on the $241.5-million project to convert 624,000 sq ft of space in the building into 386 residential units, plus 92,000 sq ft of retail and other commercial space. At 535 ft high, the building, with 1.35 million sq ft of space, occupies an entire block bound by LaSalle, Clark and Adams streets. The art deco skyscraper is a Chicago landmark, part of the West Loop-LaSalle Street National Register Historic District. It is the last skyscraper completed in Chicago before construction of tall buildings was paused by the Great Depression and then World War II. The tower has had an 83% vacancy rate since Bank of America moved north to 110 N. Wacker in 2021.

SCB says the initial plans call for removing the mechanical sheds on each of the four lower towers on the corners of the building and using decommissioned elevator shafts inside to house new mechanical equipment. The “shoulders” of the building will become amenity spaces for the residents, including a pool and green spaces. Because the windows were originally operable for its office use, no new holes need to be punched for windows to apartments.

“The economics are critical” on conversions “because you’ll get to a threshold where it might lay out nicely, but it’s too expensive to support the future income. Further, you have to bring [a historic building] up to current code,” SCB president and CEO Chris Pemberton says. “We’re reviewing the energy model for the exterior envelope very closely. We’re going to replace all of the windows with more modern ones, but it is a landmark facade. We’ll work in close collaboration with the landmark preservationists on that.”

SCB associate principal Steve Hubbard says that the larger floor plates of the building made sense for retail spaces within the community while floors 5-14 will be converted into 386 residential units. He also notes that the original art deco fixtures of the building, such as mail drop boxes and cast aluminum facade panels, were determined to be good candidates for reuse.

“When we look at carbon studies, for a building like 135 S. LaSalle, the most carbon intensive parts of these buildings are the structure, the aluminum, the limestone facade and the caissons. You’re saving all that and just redoing the windows and mechanical systems. It’s such a better thing to do environmentally,” says Sara Beardsley, an SCB associate principal.

SCB’s plan for 135 S. LaSalle calls for a grocery store on the retail level and other shopping options for residents.
Rendering courtesy of SCB

The Carbon Case for Conversions

David Farnsworth, a principal structural engineer at Arup, recently led the creation of a report on high-rise office-to-residential conversions in New York City. The scope of the report included 222 buildings, all over 10,000 sq ft, being considered for zoning changes by the city planning department to enable more office-to-residential conversions. It found that expanding conversion eligibility could result in up to a 54% reduction in whole life CO₂ emissions by 2050.

“The lowest carbon building you can build is the one you already have,” Farnsworth says. “There’s so much embodied carbon in the existing structures and in residential construction, and New York is pretty carbon intensive. We typically use a flat-slab concrete type of structure, which are pretty carbon intensive. Any of these old office buildings that aren’t very well utilized … from a carbon perspective are fantastic for residential conversion.”

The Arup team assessed the embodied and operation carbon savings that could result from reuse and retrofit.It took into account the decade in which the office buildings were built, floor plate, depth and window type, and then came up with 12 typologies that considered structural and massing changes needed to optimize deep floor plates for residential use, window or curtain wall replacement, and a range of energy and electrification improvements that would be triggered by conversion.

One of the 222 New York buildings Arup studied in the Farnsworth-led team’s analysis included floor-plate mediation and selective demolition, which would allow new apartment layouts and appropriate exposure to light and air by cutting out a central area of the existing office building to allow in light and adding new construction to the top floors to maintain the same floor-area-ratio.

The study analyzed both embodied and operational carbon that would come from the conversions. Farnsworth says that because of softness in the office market coupled with the older buildings being “energy hogs” that are at risk of receiving fines from Local Law 97 requirements, “they need to be upgraded anyway, even if they stay as offices. Instead of keeping the market flooded with office properties, why not people?” Under New York City’s Local Law 97, enacted in 2019, owners of buildings over 25,000 sq ft can face fines for exceeding emissions limits.

Taking a Former Bank Office to New Heights

In New York, the team behind SoMA at 25 Water St. transformed a 1960s bank office high-rise with a brick facade designed to look like an old computer punch card—with irregular, narrow windows—into a contemporary apartment building. It’s the largest office-to-residential conversion in the U.S. so far in terms of units with 1,320 apartments, ranging from studios to three-bedrooms, scheduled to open this year.

Named in reference to its location at the southern tip of Manhattan, SoMA stands 32 at stories, including a 10-floor overbuild addition. It totals about 1.1 million sq ft, including 100,000 sq ft of amenity space. As New York property developers eye unoccupied office space and city officials look to make more affordable housing available, SoMA has helped open peoples’ eyes to what is feasible at scale, says Joseph Basel, partner at Gilsanz Murray Steficek LLP, the project’s structural engineers.

“It’s the difference between a 3X large shirt and a large shirt,” he says. “We’ve worked on several conversions that are done … but it’s just the sheer scale of it. You look at things like pipe risers for a bathroom. Well, there’s [more than] 1,300 apartments; that’s a lot of risers and a lot of bathrooms. Everything was big.”

Construction took less time and came at a reduced cost compared to building new at the site, says the team. But the conversion required a lot of close collaboration between the engineers, architects, contractors and owners.

The team behind SoMA recovered square footage from light wells by adding a 10-story overbuild addition on top of the existing building.
Clockwise from top: rendering courtesy Cetraruddy; Photo by Snowfire/CC BY 4.0; Photo by Nina Li

As with most office-to-residential projects, the building needed some major overhauls to meet residential needs. Originally completed in 1968, the building has a side core and 36,000-sq-ft floor plates. While that layout gives offices the floor space they need, it doesn’t allow much natural light or fresh air to reach central spaces, especially once carved up into as many as 52 units per floor. To fix this, the team cut a pair of light wells through the floor plates totaling 75,000 sq ft in addition to relocating the core and stairwells and removing some elevators.

City zoning code allowed the team to make up for space lost when adding the light wells with the 10-story steel overbuild on top of the building, with the former top floor serving as a terrace.

“The result is that a greater number of apartments became feasible within the existing building, with additional units and amenity space above,” says John Cetra, co-founding principal at project architect CetraRuddy. “This is a great example of how intelligent land use policies can make conversions feasible.”

To accommodate the overbuild and its 1,522 tons of additional steel, the building needed its lateral system upgraded and columns reinforced to take the additional load. Reinforcing the structure added another 900 tons of steel.

The addition is an unusual shape following the zoning envelope where it was permitted, but it didn’t align with the existing building’s column grid. The engineers “would have gone to the clouds if we could have,” Basel says, but ultimately they were constrained by the foundation capacity. Upgrading a foundation in this part of Manhattan can be difficult because of water and other complications.

Engineers used sloping columns and cantilevers to maximize space while supporting the overbuild. And since they couldn’t concentrate the bracing around the core like they would have with a new building, they had to spread out the lateral system, and sized the braces to fit within the apartments’ demising walls, says Andrew Dolan, associate partner at Gilsanz Murray Steficek.

“The changes we made are significant,” Dolan says. “The original building was not designed for this. On our end, it’s a lot more work than a new building.”

To ensure the plan would work, the engineers created two separate 3D analysis models: one recreating the as-built existing building to confirm the original design, and one with the overbuild. The process revealed some quirks—when the former bank tenant added safes to two floors to store bearer bonds, the building’s past owner simply had an engineer add a small note on the drawings indicating a live load reduction rather than redesigning the original columns. Dolan says the process was key in determining construction sequencing.

To hasten the rate of work, general contractor Pavarini McGovern used different subcontractor teams working on structural reinforcement simultaneously at different levels, and another sub working on the overbuild, says Joe Lacertosa, project manager at Pavarini McGovern.

“So as soon as the roof opened up, the surveying was done and we got as-builts and everything procured in place, and we had three different trades working on three different focuses to keep us going,” he says.

The team working on SoMA upgraded the building’s lateral system and reinforced columns with 900 tons of steel to support the overbuild addition and other building improvements.
Renderings courtesy Cetraruddy

Working on a conversion rather than a new build also allowed the contractor to quickly ramp up the number of workers on site. They had more than 500 workers from the start, and peaked at about 750, says Marc DePaul, executive vice president at Pavarini McGovern. The team includes three sets of electricians and three sets of ironworkers, plus union labor for most of the mechanical work. More than 1.9 million labor hours have gone into the project.

The team used a similar approach on the facade. While they explored a total recladding, Cetra says the team realized it would be more efficient and just as effective to punch new window openings. One crew worked on the openings from the top down, while a second worked up from the bottom.

“Now, with thousands of new windows and the remaining brickwork given a vibrant white color, the building’s appearance is transformed and gives the impression of an entirely different facade,” Cetra says.

Michael Signorile, exterior envelope supervisor at Pavarini McGovern, says they had essentially four separate phases on different portions of the building. The second through 15th floors have unitized ribbon windows, and required “a significant amount” of retrofitting. There were three different lintel conditions of how the brick was supported on those floors. The contractors underpinned portions of the existing facade in 4-ft, 6-in.-sections, running 11 rigs simultaneously around three sides of the building. That enabled them to install a second lintel beneath the original to meet the desired visual aesthetics.

“There was a significant undertaking of resupporting existing block CMU [concrete masonry unit], resupporting existing masonry and installing new local plates welded to perimeter steel essentially to resupport the lower band of brick around the perimeter of the building,” Signorile says. Lacertosa likened the process to “building in reverse” as they installed plates in concert with the waterproofing, rather than installing waterproofing on top of the lintel and then putting brick on top.

The tight schedule also presented logistical challenges for the team to overcome. With so much simultaneous work, they held four coordination meetings per week. The sheer number of workers, deliveries and demolition removal meant crews would be hoisting material up day and night. They also sourced material from multiple producers to ensure a ready supply of items like sheetrock boards.

“As they were coming into the hoist, if you put your hands on them, they were still hot,” Lacertosa says.

The efforts paid off. With a 30-month total project schedule, SoMA obtained its first temporary certificate of occupancy after just 24 months.

“It was just a massive undertaking,” DePaul says.

Omniturm’s spiral axis shift enables terraces for the living area between the 14th and 23rd floors.
Photos courtesy of BIG

Incentivizing Conversions

Similar to the TIF incentives for redevelopment along Chicago’s LaSalle Street corridor, SoMA and other New York conversions are benefitting from programs aimed at boosting the housing supply. SoMA is the first office-to-residential conversion to take advantage of New York State’s 467-m tax incentive for conversions that meet affordable housing requirements, according to its developers.

The project also benefited from New York City Mayor Eric Adams’ City of Yes for Housing Opportunity plan, which eases the permitting process and reduces zoning barriers for conversions, among other initiatives.

Omniturm in Frankfurt, Germany, not only has garden terraces for residents, but also connects to nearby office towers via skyways with their own foliage.
Rendering courtesy of BIG

“The various methods of reallocating floor area are especially exciting, and while an overbuild addition of this size has never been done before in New York City, we anticipate seeing more of these solutions going forward,” Cetra says.

New York and Chicago are not the only cities looking to enable more office-to-residential conversions. The average office vacancy rate in major U.S. metro areas climbed to more than 20% as of the end of June, according to Moody’s. In February, the Seattle city council passed an ordinance creating a sales and use tax deferral for converting underused commercial property into housing. Boston launched its Downtown Residential Conversion Incentive Pilot Program in 2023, offering developers a payment-in-lieu-of-taxes incentive to convert offices into residential buildings. The program surpassed its first-year goal in just six months, and city officials have expanded it with state funding to include larger projects. Other major cities from Washington, D.C., to San Francisco have also taken action to speed up permitting or offer tax breaks for conversions.

People Friendly Offices

While many of the buildings being converted today were designed for optimal business efficiency and not for people-friendliness—with large floorplates and elevators that are one size fits all—many contemporary office buildings are being designed the opposite way, with ample daylight, elevators that serve specific uses and amenity spaces that rival new residential construction.

In its recent office and office/residential building designs, Bjarke Ingels Group has baked in flexibility from the beginning. “The first decision that one makes is ceiling height and by deciding it you basically have either increased or reduced the number of programs that could eventually work within a building,” says Kai-Uwe Bergmann, a partner in BIG’s New York office. “The other is access to daylight, so the deeper a building is may work very well for certain commercial uses, but they don’t work very well for a residential conversion.”

Office developers such as Tishman Speyer are asking designers to provide amenity terraces such as those for tenants of the Spiral in Manhattan to entice workers back to the office.
Photos courtesy of BIG

The Omniturm mixed use tower, completed in 2019 in Frankfurt, Germany, has both residential and office floors, 476,000 sq ft of offices and 88,000 sq ft of residential apartments. The floor plates slide outwards in a circular motion as the office floors give way to residential ones and the spiral axis shifts from the center to enable terraces for the living area between the 14th and 23rd floors. In Frankfurt, there’s a dearth of residential property available for people that want to live downtown. Omniturm’s residential floors were an attempt to create a work-life balance in a city where many workers leave at 5 p.m.

“The Omniturm in Frankfurt was designed to be both. You could still convert some of the commercial floors into residential in the future—those options do exist in a project where that’s been designed for it,” Bergmann says.

Elevator access in Omniturm is controlled by Schindler’s MetaCore technology, where sensors and key fobs allow lifts to go to certain floors for whomever is holding the fob. It can also program different experiences for different tenants that have separate entrances or their own elevators. SCB said that Destination Dispatch technology would be used for the 135 S. LaSalle conversion to separate the retail and residential floors.

“Architecture is going to look very different in the future, where it’s less about creating an icon and more about actually curating the palette of existing and new,” Bergmann says. “You’re going to find more of organic and a lot more eclectic approaches.”