The paper proposes a displacement-based design method for seismic retrofit of RC buildings using hysteretic dissipative braces. At first, a fully multimodal procedure based on an adaptive version of the capacity spectrum method is applied to the 3D model of the damped braced structure. Then, the properties of an idealized bilinear model are defined using the seismic characteristics of the compound system thus accounting for the frame-damped brace interaction. Finally, an iterative procedure is developed to provide an optimal distribution of dampers. The proposed method overcomes the limitations of the design procedures in the literature that generally neglect the frame-damped braces interactions. Moreover, it addresses the main issues of seismic design of damped braces: effect of force demands applied to the frame due to the damper yielding and strain hardening, higher modes contribution, effect of soft-storey irregularities, and torsion effect in asymmetric buildings. The proposed design procedure is first validated using nonlinear static and dynamic analyses of a numerical example. Then, it is implemented to a real case study of a RC school building to assess its applicability in current practice.