A loft building in Chicago’s River North has traded hands for the first time since it was built more than a century ago, setting up a redevelopment that is a sign of the times: an office-to-apartments conversion.
Chicago developer Mo2 Properties has bought the seven-story Boylston Building at 116-122 W. Illinois St., which the firm plans to convert into 36 apartments, principals Ken and Michael Motew told CoStar News.
“We love the location, the ceiling heights and the exposed timber,” Michael Motew said. “We also like the idea of having a smaller-sized walk-up property in an area of River North high-rise buildings with lots of amenities.”
Mo2’s plans come as developers are teeing up similar, and in many cases larger, conversion projects with office demand low and apartment rents growing in Chicago.
One larger project is directly across the street, where Chicago Development Partners plans to convert the office portion of a 10-story building at 111 W. Illinois St. into about 145 residential units. Not far away on the Magnificent Mile shopping avenue, Connecticut-based Commonwealth Development Partners wants to convert most of a 24-story office building at 500 N. Michigan Ave. into 320 apartments.
“Our project is different than changing the space from traditional office space,” Ken Motew said. “This is a loft building, and we’ve done plenty of work in loft buildings.”
The firm owns about 700 apartments throughout the city, including ground-up projects and conversions of historic buildings such as the one on Illinois Street, the Motew brothers said.
Mo2 said it has retained 72% of its tenants in its portfolio throughout the past year, the highest in the company’s history, amid rising rents and little competition from new construction.
The $3 million sale of 116-122 W. Illinois late last month is the first change in ownership since Boylston Steam Specialty Co. built the 48,110-square-foot building in 1913, according to SVN Chicago broker Jim Mead.
The company initially used the building for light manufacturing, sales and distribution, he said. Most recently, the family has leased out vintage office space on deals as short as month-to-month.
Mead brokered the building sale for members of the Boylston family that have continued to own the property, even after the steam valves maker-seller stopped using the building many years ago and more recently was acquired by Minnesota-based Valve Check. The business is now called Boylston Twenty-First Century, according to Valve Check’s website.
Through Mead, family members declined to comment on the sale to CoStar News.
Mead said the offering received interest from office and multifamily developers. The building is zoned for both uses, and short-term office leases left open the door for a residential conversion to start soon, he said.
Mo2 declined to say how much the redevelopment is expected to cost. The firm plans to start work by early 2025, with the project expected to take about a year.
The lone retail tenant on the ground floor, Arthur Murray Dance Studio of Chicago, will remain.
Apartments will have one or two bedrooms. New amenities are expected to include a rooftop deck.