The transformation of blue-collar working space into a well-situated condo on the outskirts of the Loop has been well documented. One need only glance in the direction of Printer's Row to see an obsolete industrial district reshaped into a high-end condo market. But the grand old skyscrapers of the Loop proper, with floor after floor of increasingly obsolete office spaces, have largely been left alone. Many of the early 20th century skyscrapers have seen their appeal as office spaces slowly decline as more modern office buildings take their place. And at least one downtown real estate developer sees residential potential in the fading office spaces behind all those ornate 1920s facades, and is in the middle of reshaping an entire Boul Mich block.
"There's a glut of East Loop office space," says Louis D'Angelo, the owner of Metropolitan Properties, while acknowledging a downtown real estate market that increasingly favors residential development.
And starting with the McCormick Building at 332 S. Michigan, D'Angelo is slowly converting three office buildings in the 300 block of South Michigan Avenue into an exclusive residential address, with views of "Cloud Gate," Lake Michigan and Soldier Field all up for grabs.
D'Angelo, whose father, Dino, built a commercial real estate empire that included the Civic Opera House, says his interest in residential conversions started in the early 1990s. Around that time, D'Angelo recalls, the city convened a panel to discuss the abundance of older office space, especially in the East Loop.
"There are a lot of Class B, and Class C buildings," D'Angelo says, referring to the classifications for city office buildings that determine how much can be charged per square foot.
In 1995, he purchased the McCormick Building and began converting the top 14 floors into 78 residences. With the lower floors remaining commercial, D'Angelo says he got several skeptical responses about the mixed-used operation. People would ask, D'Angelo recalls, "Who would want to live in an office building?"
He would retort by ticking off several, newer buildings, from the John Hancock Building to 900 N. Michigan, that are a similar mesh of office space on lower floors and residences atop. And the gamble paid off - the building's 78 units were sold in four and a half months, D'Angelo recalls.
"…That's where the market is," says D'Angelo, who lives with his family on the top floor of the McCormick Building. "It's very strong for residential, luxury high-rises."
Next in line are 318 and 310 S. Michigan Avenue, which the D'Angelo family has owned since 1977. The buildings, with a mix of penthouses, town houses and smaller residences will be complete in 2007. Most of the units will be priced at around $600 a square foot.
The sales center at 310 S. Michigan opened for business in September with an initial offering of 100 units out of the 250 or so D'Angelo eventually hopes to carve out of the building, as leases for the current office space expire. Eighty of the units are already under contract, and the remaining 20 units have been reserved by potential buyers. The top six floors of the building, from the 24th to 29th floor, will be sold as penthouses after they're gutted. The buyers will then bring in their architects, D'Angelo says, adding that the price point for those units have not been determined as of yet.
"We'll deliver a shell," D'Angelo says. D'Angelo says he already has a long waiting list of potential occupants for the penthouses, which will be roughly 5,000 square feet. D'Angelo also is selling small spaces in the interior of the building, which he dubs "Imagination Rooms," which residents can buy and used for additional studio or storage space. Eventually, D'Angelo, says, he would like to add a health club to the building for residents and non-residents alike, and he hopes to attract a white tablecloth restaurant to the adjacent 318 S. Michigan.
The historic significance of the Strauss and McCormick buildings, both of which are part of the South Michigan Avenue street wall, help position the condos in a market crowded with newer high-rises. The Strauss Building was designed by the Chicago firm of Graham, Probst and White, and is distinguished by a blue-light beacon easily identifiable on Boul Mich.
"The niche is being in the historic street wall district," D'Angelo says, adding that he's donated the easements of both buildings to the Michigan Avenue Historic District. And with a view out onto Grant Park, potential buyers don't have to worry about newish high-rises blocking their views of "Cloud Gate," Lake Michigan and Soldier Field. Not many buildings, D'Angelo adds, can advertise that their views are guaranteed by a Supreme Court decision, in this case a 1910 ruling that prohibits construction on the lakefront.
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