Chicago Developers Teach Old Buildings New Tricks As Historic Conversions Become Hot Tickets

Some of Chicago’s hottest new buildings have been around for more than 100 years. 

That’s because developers have renovated or are in the process of remaking some of the city’s historic staples for a modern audience, including the Old Post Office, the Salt Shed and the James R. Thompson Center.

The best conversions are a combination of developers identifying buildings with solid financial fundamentals and utilizing the property’s existing character to create unique branding for its new use, panelists said at Bisnow’s Chicago Repositioning and Conversions event.

Those conversions can offer value that doesn’t exist in new buildings and revitalize communities by offering a new attraction, panelists said during the event, held Tuesday at The Allegro Royal Sonesta Hotel. 

“These are reuses of places that are just absolutely amazing and do really good things for those communities,” said Ernie Wong, chair of the Commission on Chicago Landmarks. “If you do a good repositioning project, that's going to draw people, that's going to start to build that community.”

Nikki Kern, executive vice president of The Telos Group, which represents the Old Post Office, said the group had to evaluate the building’s internal infrastructure and floor plate size to determine its suitability for a conversion to office space. The Old Post Office initially opened in 1921. After an extensive renovation, it reopened for office tenants in 2019. 

The renovation came as tech companies were “exploding” and looking to fit as many people as possible into a space, so the building’s large floor plates paired well with tenants’ goals, Kern said. The building had to be gutted and infrastructure completely replaced, but the price the building was bought for made the economics work, she said.

The historic nature of the Old Post Office is appealing to tenants, but Kern said it also had to be updated with modern amenities to give tenants “all the bells and whistles” they are used to.

Its past separates the building from others in the market, she said. 

“It gives you an advantage to embrace the story behind the building and its historic significance,” Kern said. “Branding the building to that era can be a huge advantage in differentiating your product from all the other commodity office buildings that are in the city.” 

Wong said the marketing and programming in a redeveloped space like the Salt Shed is as important as a well-executed design in making the new concept successful. The Morton Salt Complex opened in 1929, and developers converted it into a concert hall that opened in 2022. 

Getting the word out to your potential audience about the new concept is key, Wong said.

“Even before the Salt Shed finished, they were already starting to market what events were going to come in,” he said. 

The Thompson Center, a building where conversion efforts are underway through Prime | Capri Interests, is also generating buzz due to the pending arrival of its new owner, Google, in the central business district. 

In July 2022, Google announced plans to purchase the 1.2M SF Helmut Jahn-designed building for $105M, pending completion of renovations. The company anticipates it will move into the building at 100 W. Randolph St. in 2026.

The project has proceeded as planned, on time and on budget, said Michael Reschke Jr., executive vice president at The Prime Group. The curtain walls surrounding the construction are completely off, and glass for the facade is expected to come in February, he said. 

But it took “conviction” to pursue the conversion opportunity during the darkest days of the pandemic in 2021 when no one was working in offices, Reschke said. 

“If you told me five to 10 years ago, maybe just five years ago, what deals I'd be looking at, the vintage of the building, the class of the building, the service level … I might not believe you,” Recschke said. 

But all the opportunities for conversion are a welcome sight in the new business environment, he said. 

“It's good that there's just more opportunity and product out there and to focus on as we continue ... through this change of the business environment,” Reschke said.