Chicago region construction’s next boom is already standing

For years, commercial construction in Chicago was largely measured by what was coming out of the ground, but the biggest opportunities today look different. The focus is on making buildings that already exist work harder, smarter and much more efficiently than even before for their tenants.

Whether it's an office renovation, a mixed-use redevelopment or repositioning an aging suburban property, the shift has accelerated over the last few years where construction has become much more about problem-solving than building.

Adaptive reuse is reshaping commercial real estate

Across Chicago, as well as its suburbs, office buildings that no longer have a place in today’s market are being evaluated for adaptive reuse. Along suburban office corridors like along I-88, I-290 and I-294, for example, many office campuses that were built decades ago simply don’t align with how companies operate today. Some are being renovated, others are being partially demolished, and many are being repositioned into entirely different uses. Instead of asking how to fill empty buildings, owners are asking what those buildings could become.

Municipalities also are starting to get on board and support these projects through incentives and redevelopment programs. They now recognize that repurposing existing assets is often more realistic than waiting for large-scale ground-up development to return.

Tenant improvements are driving demand

Tenant improvement work has become the backbone of much of the commercial construction market. As more employers settle into long-term hybrid workplace strategies, companies are leasing space differently. Offices are becoming smaller, more flexible and more collaborative, and larger more private offices, are giving way to shared work areas, wellness amenities, conference spaces and adaptable layouts. Tenant improvements are moving toward the type of space that supports employees coming into the office for collaboration rather than individual work.

For landlords who may be competing in this market, where vacancy is still elevated, investing in modern tenant improvements is one of the stronger ways to attract and retain occupants.

Medical office and outpatient facilities are another area creating construction momentum, particularly throughout Chicago’s suburbs. As healthcare providers continue expanding closer to where patients live, traditional office buildings are being successfully transition into medical uses. In addition, once that type of building reaches its max in terms of healthcare tenants, it tends to attract complementary providers to the property.

New challenges require earlier collaboration

None of these opportunities eliminate the realities that contractors continue to face every day in the Chicago region. Material pricing, although more stable than it was during certain points during and after the pandemic, remains somewhat volatile. Longer lead times are still required for some products as well, making early planning much more important.

The industry also is facing skilled labor shortages, which are making experienced trade partners more valuable. That, in turn, requires projects to have realistic timelines, schedules and expectations.

The role of contractors also has changed because of those challenges. Owners now are bringing construction teams into projects much earlier to help evaluate feasibility, establish budgets, and help them identify scheduling risks. Contractors are the ones helping make key decisions before drawings and plans are even finalized.

The main reason for their early involvement it to help owners avoid redesigns and other costly surprises that otherwise can arise later in the process.

Construction has become about preventing problems from the onset instead of reacting to them.

Technology is changing the process — not replacing experience

Technology is continuing to play a critical role in commercial construction operations today. AI-generated renderings and visualization tools, for example, are helping clients communicate ideas faster than they ever have before. However, with those tools comes rising expectations for quicker response time or faster decision-making.

While tech tools help with collaboration, successful projects still depend on practical experience. That includes those who understand what can actually be built, with what materials, and how design decisions can have an impact on cost and schedule.

Ultimately, Chicago’s construction market is reinventing itself and becoming more strategic. The projects moving forward today are ones that maximize existing assets and respond to changing tenant needs.

• John Line is executive vice president and Youssef Nafe is project manager at Huntington Construction, a Midwest construction firm with an office and operations in Chicago. They can be reached at line@huntingtonconstruction.com and nafe@huntingtonconstruction.com.