This paper presents a hybrid simulation (HS) with a proposed substructuring technique that captures the effect of first‐story column local buckling and axial shortening on the frame behavior. The HS is applied to examine the seismic response of a two‐dimensional seven‐story, two‐bay steel dual system. The experimental substructure consists of a full‐scale interior column and beam cruciform subassemblage, including a moderately ductile first‐story built‐up box column and two I‐shaped beams. Under combined axial and lateral loads, local buckling can occur near the column base, resulting in column shortening. The specimen is loaded through a four‐degree‐of‐freedom (DOF) mixed‐mode control (three displacement‐ and one force‐control) actuation system that simplifies the actual complex boundary conditions of the frame structure. To account for column shortening in the HS, a new approach consisting of a set of fictitious equivalent forces applied to columns in the numerical model to achieve compatible displacements with the experiment is implemented. Shortening of the two exterior columns in the model is simulated through finite element analysis using the computer program ABAQUS in an attempt to capture the redistribution of axial loads with column shortening. The test results confirm that the proposed modeling and control methods successfully integrate the experimental substructure and ABAQUS simulation into the HS, resulting in a more realistic frame response that captures the effect of column shortening in the analysis. The moderately ductile built‐up box column is verified to perform well in near‐fault earthquake loadings.