As Distressed Chicago Buildings Trade Hands, Renovation Spending Follows

Written by:

Steve Marcinuk

Date:

10 Jul 2026

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

Six years after the pandemic reshaped how and where people work, Chicago’s commercial interior construction market is showing clear signs of recovery. Downtown foot traffic is up, transit ridership is climbing, and building owners are once again investing in their spaces. For firms like Plan North Construction Services, a Chicago-based general contractor specializing in commercial interior buildouts, the timing aligns with a market ready to spend.

Plan North operates across office, retail, restaurant, education, and industrial spaces, handling projects ranging from 2,000 to 100,000 square feet with timelines spanning four to 24 weeks. What has changed most noticeably over the past year is not the type of work, but who is commissioning it.

Lou Ricciardi, Chief Operating Officer at Plan North, says the firm’s project mix has moved away from tenant-driven office renovations toward landlord improvement work. That pattern reflects what is happening across Chicago’s commercial real estate market. As buildings that struggled through the pandemic cycle into new ownership, incoming investors are deploying capital to reposition assets, upgrading common areas, refreshing amenities, and building out spec suites that leasing brokers can show prospective tenants. The goal is straightforward: attract tenants, generate leases, and stabilize returns.

“A lot of real estate here is turning over,” Ricciardi notes. “Buildings are going into default, and another investor takes that opportunity and buys the property at a discount, but usually that investor has enough capital to reinvest in the building. That’s where we come in.”

For contractors with established relationships among building owners, this dynamic represents a steady pipeline of work. Plan North, which was formally established two years ago but draws on Ricciardi’s 35-year industry network, doubled its revenue within his first year as COO.

Pre-Construction as the Differentiator

In a market where project delays and cost overruns are common complaints, Plan North’s approach centers on what happens before a single wall goes up. Ricciardi is direct about where most projects go wrong: the pre-construction phase.

The firm’s process involves locking in scope, sourcing subcontractors based on their current capacity and labor availability, and advising clients on material selection that avoids long lead times. “Once you start the work, the money is rolling, and you don’t want to incur any changes or costs,” he says. “Critical is setting that up front, through good construction plans and design.”

Ricciardi points to a recent project where a client bypassed pre-construction recommendations, initiating work before permits were secured. A value engineering process midway through changed both materials and scope, which delayed the permit submission and stalled the first required inspection. The project timeline slipped as a direct result of skipping the upfront planning that would have caught those issues early.

For property owners, Plan North takes this further by developing phased capital plans that map out improvements across multiple stages, allowing owners to sequence spending while taking advantage of economies of scale across trades. Other general contractors in Chicago offer similar planning services. Still, Ricciardi argues that the firm’s emphasis on completing all design and permitting work before pricing sets it apart from competitors who begin construction on incomplete plans.

Locally Sourcing Materials

Supply chain pressures remain a factor in commercial construction, but Ricciardi offers a measured take. For projects where designers specify locally available products, his team reports few disruptions. The problems tend to emerge when specifications call for imported or specialty items.

“If you’re specifying tile from Italy, there’s a long lead time with that,” he says. “We advise on sourcing local products, preferably in stock or with a short lead time.”

When a specified product turns out to be discontinued, out of stock, or overseas, Plan North flags it early and recommends an alternative before it becomes a scheduling problem. This proactive stance reflects the firm’s broader philosophy of managing variables before they become costs.

A Labor Shortage

While material sourcing can be managed with planning, a longer-term constraint is harder to solve. On job sites across Chicago, the workforce skews older. Experienced tradespeople in carpentry, electrical, plumbing, and other disciplines are approaching retirement, and there are not enough younger workers entering behind them.

“You don’t see a lot of young people working, which is a signal that they’re going to retire out and nobody is backfilling,” Ricciardi says. The root of the problem, in his view, is cultural – trades careers carry a stigma compared to university-track employment, discouraging younger workers from entering the field. “It could get a lot worse if that shift doesn’t change.”

For now, Plan North manages the issue through careful subcontractor selection, assessing each firm’s current workload and labor capacity before awarding work. But Ricciardi is clear that the industry-wide shortage is a structural issue, not a temporary one, and that project timelines across the market will eventually feel the pressure if apprenticeship pipelines do not strengthen.

Return-to-Office Is Driving Demand

Perhaps the most encouraging signal for Chicago’s commercial construction market is the visible return of workers to downtown. Ricciardi points to crowded trains, increased street traffic, and a general uptick in urban activity as indicators that the office market is genuinely recovering, not just stabilizing.

“Trains are crowded, people are coming downtown to work, there’s a lot more buzz out on the streets,” he says. “These are all good signals that people are actually coming back to work, and that helps our market.”

That return is prompting both growing and downsizing companies to revisit their spaces. Either scenario generates renovation work. Companies expanding need more room; companies consolidating want smaller, better-designed offices that justify the commute. Ricciardi sees the physical workspace as directly tied to productivity and employee engagement.

“Giving them a nice, aesthetically pleasing, functional space is key to having your employees come back in,” he says.

Looking Ahead

The near-term outlook for Chicago’s commercial interior construction depends on whether the current recovery continues to build momentum or levels off as interest rates and economic uncertainty weigh on investment decisions. For now, the signals point toward steady demand, building owners are spending, tenants are returning, and the pipeline of repositioned properties continues to grow.

The firms best positioned to capture that work are those with deep trade networks, disciplined pre-construction processes, and the credibility to guide clients through decisions before costs start running. Ricciardi says client hesitation tends to ease once realistic timelines and budgets are laid out clearly. “Once they understand how we operate and the honesty we put up front, their hesitation backs off,” he says.

About the Expert: Lou Ricciardi is Chief Operating Officer at Plan North Construction Services, a Chicago-based general contractor specializing in commercial interior buildouts across office, retail, restaurant, education, and industrial spaces, with 35 years of industry experience.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.