Danwei compounds were the dominant form of urban neighborhood in China's planned economy era. However, since the economic reform, the status of danwei compounds has undergone dramatic changes. By examining the transformation of Hua Gong Da Yuan (HGDY), a danwei compound in Beijing, this paper conceptualizes property rights redistribution and spatial evolution for post-danwei compounds. The transformation of danwei compounds is accompanied by the increasing awareness of property rights mainly in terms of land parcels, amenities and housing. Meanwhile, a more diversified group of property users, including both original residents and newcomers, are granted some portion of these property rights. They tend to privately claim all types of compound resources, which causes the spatial evolution of the compound, such as the reuse of former amenities, fragmented spaces and porous boundaries, the evolution of street shops, and the encroachment of public space. This paper argues that the institutional and proprietary order of post-danwei compounds is vaguely defined and disorderly arranged, which results in a weakened pattern of residual claims and compounds' deterioration. The study suggests an updated contract regarding danwei compounds to clearly regulate the behaviors of property users.