332 South Michigan Avenue Office Space Faces Conversion
A new buyer is set to convert the distressed office property into apartments, adding to the city's housing stock.
Updated on Oct. 29, 2026 in Commercial
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Envoi Partners has entered a contract to purchase the office portion of 332 South Michigan Avenue in Chicago. The deal settles a $29 million foreclosure lawsuit against the building owner, Aetna.
Why it matters
The acquisition marks a major shift for the distressed property, which saw its value drop from $56 million in 2016 to $13.4 million in early 2026. Converting the space into apartments follows a broader trend of repurposing vacant Chicago office assets.
The building was appraised at $13.4 million in January 2026, down significantly from $56 million in 2016. The site contains 78 separately owned residential condos on the upper floors that remain unaffected by the purchase of the office space.
The players
Envoi Partners
A real estate firm that specializes in acquiring distressed office properties to convert them into residential apartment units.
Aetna
An insurance and financial services company that owned the office building until the recent foreclosure lawsuit.
The details
Envoi Partners utilizes a strategy of acquiring distressed office buildings out of foreclosure to convert them into residential apartments. The firm is currently applying this same model at 19 South LaSalle Street, where it is converting 140,000 square feet of former office space into 175 new apartment units. The 332 South Michigan Avenue acquisition resolves a $29 million foreclosure lawsuit that had been pending against Aetna.
Timeline
1990s: Building was split into separate office and condo sections.
2000: Residential condos were delivered.
2004: Aetna purchased the property for $29 million.
2016: Property was appraised at $56 million.
January 2026: Property was appraised at $13.4 million.
The Home Front
This acquisition is part of an ongoing trend of converting underused downtown office buildings into residential space. It follows the pattern of similar commercial-to-residential repurposing projects that are currently reshaping the Chicago real estate landscape.
Current residents of the 78 condos in the building should monitor updates from their condo board regarding potential construction impacts to shared building systems. Homeowners in the surrounding area may want to track how this conversion affects local unit density and neighborhood demand.
The takeaway
The move from office to residential use highlights the significant value fluctuations in downtown real estate since 2016. Owners of nearby property or those interested in the area should keep an eye on upcoming city planning filings for the address to see the final apartment count.
Further reading
Learn more about local development trends in the Commercial section.
Source note: This article includes information reported by The Real Deal New York.
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