Converting Commercial Office Buildings into Apartments or Condos: A Comprehensive Guide
Are you a developer contemplating the conversion of a 20 to 90+ story commercial office high-rise building into residential rental or condo units? Check out our comprehensive guide below to get started.
The Changing Landscape of the Workplace
In the wake of the COVID-19 pandemic, with employers embracing permanent 'work from home' arrangements, the landscape of the modern workplace has undergone a monumental shift.
This transformation has left commercial office buildings with high vacancy rates, posing financial challenges for both property owners and lenders. To address this, commercial real estate developers and property management firms are increasingly exploring the conversion of these commercial high-rises into residential rental or condo units. This strategic shift aligns with evolving market dynamics and offers a viable financial stability solution.
Here, we present a detailed guide to help you navigate the intricate process of converting commercial spaces or buildings into residential units. Additionally, Chicago Cityscape has provided a link for up to date projects on Converting commercial space to residential space of local completed projects at the link HERE within their News & Development Gallery which currently has about 40 projects completed as of date.
Key Considerations for Converting Commercial to Residential
1) Architectural Considerations
Ceiling Heights
Converting commercial buildings into residential spaces often comes with the advantage of taller interior ceilings. Commercial buildings with 10ft-14ft ceilings typically provide around 1-3ft of extra headroom height compared to residential builds where the standard is 8-10ft high ceilings, which can be a significant benefit for several reasons including:
Space Utilization for HVAC Systems: The additional 1-3 feet of headroom height can be used to accommodate the installation of essential HVAC (Heating, Ventilation, and Air Conditioning) systems. This extra vertical space allows for the integration of ductwork, air handling units, and other components, without compromising ceiling height in the living areas. Newer commercial buildings tend to have wraparound glass with interior columns which demands a higher level of energy efficiency for heating/cooling.
Plumbing Routing: Higher headroom height offers more flexibility when installing additional water supply lines, drainage systems, and redirection of the sprinkler system.
Enhanced Design: Higher ceilings help create a sense of spaciousness, making the residential units feel larger in tight areas, open and inviting. Design elements such as recessed lighting, decorative fixtures, and ceiling fans can be incorporated more effectively without compromising headroom.
Sound Insulation: The additional space between the ceiling and the floor of the unit above can help minimize the noise transfer between units, ensuring a peaceful living environment for residents. Keep in mind that proper insulation and HVAC system design are crucial to ensure that the added height (larger windows, etc.) does not result in inefficient temperature control, which could lead to higher energy costs.
Market Appeal: Residential units with taller ceilings often have a competitive edge in the real estate market i.e., the ‘lofted or luxury floor to ceiling window feeling.’ Prospective buyers or renters find higher ceilings desirable, as they contribute to a feeling of luxury, and can translate into increased demand, and potentially higher rental or sale prices for the converted units.
Common Spaces
Attractive amenities can increase the overall property value, benefiting both property owners and residents. Transforming spaces once used for corporate purposes into building amenities that further enhance the appeal and livability of new units is a pivotal aspect of converting a commercial high-rise into residential apartments or condos. Consider repurposing common commercial areas or offices into residential amenities like lounges, gyms, and business centers. Plus, if structural and budgetary considerations allow, adding an interior or exterior pool to a converted commercial building can be a game-changer for amenities. A pool requires a detailed system for dehumidification which can take up a large space in the basement of a building.
Pools are highly desirable amenities for residents, especially in urban environments. Rooftop pools in addition to rooftop gardens or terraces offer stunning views and create a luxurious and unique selling point for the residential community. In hot climate locations such as Miami, pools on private balconies can be created. Yet in cities such as Chicago, creating private pools is not feasible. In these cases, creating a single (1) outdoor or indoor pool common to the building tenants may be possible.
Building Structure
Commercial high-rise buildings are typically constructed with concrete structural levels to provide structural stability and durability. When it comes to converting these commercial buildings into residential apartments or condos, concrete can present unique challenges, particularly when installing new electrical and mechanical piping.
Trenching: When installing new electrical wiring, plumbing, or HVAC ducts, trenching for pathways within the floors often need to be created. Concrete commercial buildings can make this process far more time-consuming and labor-intensive compared to other materials.
Trenching in concrete structures also carries a risk of compromising the building's structural integrity. Any modifications must be executed with precision by specialized labor in order to ensure that the concrete's load-bearing capacity is not compromised. Additionally, trenching through concrete generates a significant amount of dust and debris on the project site. Managing this effectively to maintain a safe and clean environment for construction workers and occupants is essential.
Stair and Elevator Systems
Commercial floor spaces are vast, and are often designed as an entire floor suite, or divided into several smaller suites – both with existing stair and elevator systems. The elevators in commercial buildings are more abundant than required in a residential building. When converting, you can decrease the number of elevators and utilize the space as a shaft for other MEP purposes. Typically, a residential building has no more than 4-6 elevators, and a commercial building has around 4-10 elevators at minimum. Freight elevators should be retained in their existing areas. Relocating the freight elevator is not efficient because it can cost around $150,000 to relocate or remove the elevator.
When converting an entire floor into residential units and hallways, it’s best to optimize these existing stair and elevator locations with several points in mind, including:
Accessibility and Convenience: The existing staircases and elevators are essential for ensuring residents can access their units conveniently and safely. The priority when converting these elements for residential use are fire prevention, location to the residential units and stacking of specific elevators to certain tiers, compliance with city building code, and ease of use for all residents from all common areas.
Minimal Structural Changes: Altering the location of staircases and elevators can be significantly complex and costly, rendering a project nonstarter. It's often more practical to work with the existing locations as much as possible. Adapting the new residential layouts to these elements can help minimize structural changes, reduce costs, and expedite the conversion process. To adapt, you’ll need to hire an experienced architect to work around the non-negotiable elements of a building. When removing the elevators, you have an added benefit of grade to top level open stack area for another utility component.
Unit Separation
When converting a commercial floor occupied by several units, consider the location of the existing commercial utility stacks, and how it will affect the separation of the units and the design of the hallways.
Utility Stack Location: In commercial buildings, utility room stacks typically contain common electrical panels, plumbing/sprinkler pipes, and HVAC hallway ductwork which are strategically placed to serve the needs of the floor’s commercial tenants. Commercial unit’s are dependent on occupancies that may have specialized requirements for utilities, which are reflected in the placement of these stacks. For example, a restaurant on the grade floor has different MEP requirements from a 2nd floor retail or a 4th floor commercial office.
Consolidating multiple small commercial units into a single residential unit may require relocating/consolidating or reconfiguring the utility stacks. This process involves careful planning to ensure that the new layout aligns with the needs layout. For example, plumbing and electrical systems will need to be redesigned to serve residential typical uses such as kitchens, bathrooms, and living spaces effectively.Common Space Bathrooms (per level): Common bathrooms in commercial buildings on each level need to be modified or removed because in residential, common bathrooms would only be on the amenity levels. The removal of common space bathrooms requires a heavy reduction in plumbing demolition.
Sound Insulation: The presence of utility stacks may require better sound insulation between units. To minimize noise transmission, consider soundproofing materials and construction techniques. You may want to convert three commercial units into a single residential unit.
Hallway Design
Hallways in residential buildings must facilitate smooth traffic flow for residents and visitors. Hallway design considerations include factors such as keeping the existing width of the hallways, placement of residential fireproof doors, and any architectural elements that might impact the movement of people and furnishings.
Emergency Egress: Hallway designs need to be in compliance with the city’s fire safety regulations, including emergency egress requirements within residential spaces. The design of hallways must ensure that residents can safely exit the building in the event of an emergency, which may involve integrating fire exits and proper signage.
Hallways Conversion: Converting hallways from commercial to residential typically does not require work. Most of the hallways for typical commercial level suites have a right & left entry similar to residential hallways. Open floor plan layouts do need to prepare enough space (minimum 5ft typical) for hallways. Dead end corridors are against Chicago Building code, and will need to be resolved early in the project. Where more than one exit or exit access doorway is required, the exit access shall be arranged such that dead-end corridors do not exceed 20 feet (6096 mm) in length.
2) Facade Changes
When converting a commercial building into a residential one, consider the exterior modifications required to cater to your target tenants or owners. Exterior changes can vary based on the budget and desired grade of interior finishes (example: Finish Grade A, B, C, D, etc.). These changes typically depend on the project location and project budget.
Additionally, it’s important to stay within the predetermined front/side/rear setbacks from the previously approved PD, otherwise obtaining an additional Zoning Relief for this project may be required. Retaining the project as interior renovations, and conversion to commercial without exterior additions, will make the process much simpler than dramatically changing the exterior. Yet for higher value projects, when converting a commercial building into residential, considering dramatic front entries designs and luxurious materials is necessary.
Keep in mind that most commercial buildings are located within a Planned Development (PD) zoning area, necessitating evaluations with architecture firms and the Department of Planning and Development (DPD) to achieve the desired residential conversion. Preliminary meetings are required for a large project.
Building entry and lobby design is crucial in the beginning design stages when coordinating sidewalk traffic or landscape requirements.
Many outdated commercial buildings have large empty ground floors consisting of: entry key card vestibules, coffeeshops, front desk reception, elevators or common areas such as security, coat check etc. Commercial offices also often have keycard security turnstiles leading to elevator lobbies. These security systems must be replaced with a singular door entry for tenant security. Repurposing existing elevator shafts for functions like garbage systems or mechanical needs can further optimize space.
Creating a building entry that looks and feels like a residential common foyer is essential in the conversion process. It’s best to work with an architect with interior design experience in order to create an inviting residential environment.
3) Affordable vs. Market Rate Units
When converting a commercial high-rise into residential condos or apartments, it's essential to be aware of and familiarize yourself with local regulations and requirements that govern the allocation of affordable and market-rate units.
Many cities have specific policies and ordinances in place to promote affordable housing and ensure that residential high-rises contribute to the broader goal of housing affordability. Failing to meet these requirements can lead to legal issues, delays, and potential fines. Additionally, compliance with these regulations is often a condition for obtaining the necessary permits and approvals for the project. Any residential Highrise in Chicago is required to be 20% affordable at minimum, and 80% market rate.
Affordable Housing Mandates: Many cities that are facing housing affordability challenges, have implemented affordable housing mandates for new residential developments, including high-rises. These mandates generally require a certain percentage of units within a residential building to be designated as affordable housing.
Inclusionary Zoning Laws: Inclusionary zoning laws are commonly used to enforce affordable housing requirements. These laws require developers to set aside a percentage of units in their residential projects to be designated as affordable housing.
4) Fire Prevention
Commercial buildings typically require more complex fire protection systems than residential homes. These systems may include fire sprinklers, fire suppression, fire alarms, extinguishers, and alarm monitoring. It’s important to ensure that the existing fire protection systems can adapt to the new residential configuration, while complying with local regulations – before you start to make aesthetic changes to the residential units.
5) HVAC Systems
Most commercial high-rises have HVAC components such as chillers, cooling towers, boilers, and air handlers. These commercial systems need to be updated to meet the thermal requirements for residential use, which typically has lower occupancy compared to commercial spaces due to fewer people per unit. So while a commercial unit can have 100 people working on a single floor, yet residential may only have 20-40 people living on the same floor space.
It’s substantial work to transition from a standard commercial HVAC system that serves an entire floor into individual units, since it involves installing new units, ductwork, and a dedicated shaft system. Additionally, the common portion of the new HVAC system should be centralized in order to allow for convenient adjustments in common areas by the building’s maintenance staff. This approach also offers the advantage of concentrating most of the cooling work and electricity usage by unit, so residents will monitor the conditioning costs on an individual basis with a metered gas or electric system.
In residential settings, it's important to note that air from different units cannot not be mixed, which is a practice commonly seen in many current commercial setups. To address this, standard adjustments for heating and cooling can often be adapted using Fan Coil units (FCU, VFC), where air serves as both the common supply and exhaust. However, before making any specific recommendations for the conversion of HVAC systems from commercial to residential use, a comprehensive survey of the entire existing system must be conducted in close coordination with the applicable local building codes and regulations.
6) Electrical Infrastructure
Commercial buildings are typically designed for office-oriented purposes, where electrical demands are generally lower compared to residential units. As a result, the electrical service in commercial buildings may be undersized for the needs of residential occupants. This undersized service can pose a significant challenge when converting the building into residential units and will likely require a large increase in electrical service to the building.
It’s important to note the significant timeline of an application or change of service equipment with your local utility company, such as ComEd in Chicago. Ideally, at the start of your project – you would ensure that a discussion and application is submitted to the utility company as it can take a year for ComEd to provide any provisions for upgrades. If upgrades to the underground transformer is not possible, it may delay your project for an even longer time due to equipment or local electrical delays.
All-Electric Appliances: Additionally, many major cities now have All-Electric Appliances requirements for residential units. Within the City of Chicago, the Chicago Transformation Code for construction projects with more than 60% renovations are required to have all electrical appliances – which will necessitate additional considerations when modifying the building’s electrical infrastructure.
Additional Utility Space: In order to accommodate the increased electrical service required by all of the additional electrical equipment, and efficient distribution of electricity throughout the building, additional utility space is often necessary in an older commercial building. In Chicago, this ‘new’ space allocation is typically placed on every third floor of the building, and serves as a central hub for housing MEP [mechanical, electrical, plumbing] infrastructure. This allocation ensures that electricity can be effectively delivered to each residential unit. Additionally, the majority of the basement space will maintain the majority utility part of a building.
Voltage Conversion: Commercial buildings often utilize a 480-volt (480v) electrical distribution system, which is designed for office use. In order to safely power residential appliances, however, residential units typically require lower voltage levels, such as 240 or 208 volts. To bridge this gap, a transformer is often required to step down the voltage from 480v to the appropriate level for residential use which takes time to organize with the electrical contractor.
Detailed Electrical System Survey: A critical step in the conversion process is conducting a comprehensive survey of the complete existing electrical system (+complete MEP system). This survey should be carried out according to the current local electrical codes and regulations. This helps identify existing components, assess their condition, and determine the necessary upgrades and modifications needed to meet residential electrical requirements, while complying with safety and regulatory standards.
This is a multiple process survey that occurs over a couple of months.Ideally, 1] the original conditions would be surveyed, then 2] the partial demo conditions would be recorded to see what is underneath and then modified to fit what is required per code.
The reason why you cannot follow original building plans or FOIA obtained permitted plans only, is that construction may have deviated from the original permitted drawings with slight modifications.
Electrical Conduit Considerations: Commercial buildings often have electrical conduit routed through the floors to accommodate desk and computer locations. When transitioning to residential use, all of these outlets in the floors will need to be removed or relocated. This process is essential to adapt the electrical infrastructure to the new layout of residential units.
For example, more GFCI outlets will be located in the residential kitchens and with specific dimensioned locations for outlets. Trenching through concrete floors/repouring concrete is difficult/impossible at times and proper details will need to be created to make these changes.
7) Interior Design and Flooring
When transitioning from commercial offices to residential units, careful consideration must be given to the flooring. Commercial offices often feature heavy-duty carpeting or outdated flooring materials.
When converting the space into a residential building, to help reduce noise in common areas such as main hallways, use commercial duty carpet for its comfort and sound-absorbing properties. For the interior of the residential units, consistent hardwood flooring is recommended. In humid climates, materials such as tile or bamboo are a suitable alternative for the interiors of units due to its durability and resistance to moisture.
Additionally, as the levels between each floor are typically constructed with concrete, when changing the flooring material, an additional underlayment may be needed to ensure a smooth and level surface for the new floor covering. Underlayment helps provide a suitable foundation for the top layer of flooring, whether it's carpet, hardwood, or tile. It also allows for any MEP/AV layers to be hidden underneath the flooring.
When making changes to the flooring, it's crucial to consider the location of phone and internet systems that continue to the ground level. These systems may need to be adjusted or rerouted to accommodate the new layout and requirements of the residential units.
Lastly, during the conversion process, if there is a need to relocate walls to create new room layouts within the residential units, you’ll need to account for required flooring transitions to be leveled. This ensures that the new material floor types and transitions align with the floor plan layouts.
Final Thoughts
In summary, while converting commercial office buildings into residential apartments or condos is a complex undertaking, it can yield long-term financially rewarding results.
By carefully considering these architectural design, code compliance, and structural factors, you can successfully transform your commercial high-rise into a thriving residential community.
As the real estate landscape continues to evolve with the prevalence of remote work, these conversions represent a forward-thinking solution for property owners and developers seeking stability in changing times.
If you’re looking to turn a commercial high-rise into apartments or condos, contact the experienced Chicago architecture firm BLDG Projects for more information.
Our team is licensed in Illinois, Florida, Arizona, Alabama, Iowa, Indiana, Michigan, Minnesota, North Carolina, Ohio, Tennessee, Texas, and Wisconsin.
