R2 Companies & Skydeck Acquire +$60M Midwest Creative Office Portfolio
R2 COMPANIES EXPANDS ITS MIDWEST CREATIVE OFFICE HOLDINGS WITH ITS ACQUISITION OF A +525,000 SQUARE FOOT, 11 BUILDING PORTFOLIO IN DOWNTOWN MINNEAPOLIS & MILWAUKEE
CHICAGO, Nov. 8, 2018 /PRNewswire/ -- R2 Companies ("R2"), a Chicago based Real Estate Investment & Development firm, announced its acquisition of the +525,000 square foot Midwest Creative Office portfolio. The Minneapolis assemblage includes five historic properties in the emerging Northeast Arts District. In Milwaukee, R2 acquired The Tannery, a landmark Creative Office campus in the Walker's Point submarket. The acquisition includes approximately 30 acres of land across both markets. The Milwaukee property is wholly located within an Opportunity Zone.
The Minneapolis assemblage is home to Blu Dot, a national furniture retailer, with an award winning HQ office & showroom. Other notable tenants include Tactile Medical, Anagram International, Object Partners, AON, Sociable Cider Werks, Bauhaus Brew Labs and Dogwood Coffee.
In Milwaukee, The Tannery is anchored by the Advocate Aurora Health HQ, the 10th largest non-for-profit health care system in the US. The Tannery is steps from the Iron Horse Hotel, the Harley Davidson Museum, & the Third Ward.
The Portfolio was 95% leased upon acquisition with in-place rents that are, on average, 40% below market. R2 plans significant improvements that include new amenities, such as bike rooms, fitness centers & dedicated outdoor space.
"It is rare to acquire a portfolio of scale in the Creative Office space," said Max Meyers, Principal & Chief Investment Officer at R2. "The physical assets are unique and they range from classic brick-and-timber warehouses to postindustrial office space with 35 foot ceilings. Thanks to an abundance of land, we are able to create truly special urban office campuses. These are unlike anything else that currently exists in Minneapolis & Milwaukee."
Both cities have benefited from urbanization and subsequent investment in their warehouse districts. This includes the North Loop & Northeast Arts District in Minneapolis and Walker's Point & Third Ward in Milwaukee.
"Creative Office tenants demand non-commodity space. This is difficult to replicate in traditional office towers. This portfolio includes some of the most striking buildings in each of these markets."
This acquisition expands the R2 & Skydeck portfolio. In 2015, the venture acquired Milwaukee's Main Post Office building, a 1.1 million square foot distribution facility in the Third Ward. In 2017, the venture acquired the Keller Building a 100,000 square foot Creative Office campus in Minneapolis' Northeast Arts District and the 150,000 square foot Morton Salt factory in the Goose Island submarket of Chicago.
This Portfolio was acquired through the first close of a new $150MM fund strategy focused on Midwest Creative Office assets.
About R2 Companies
R2 Companies ("R2") is a privately held, fully integrated real estate investment firm based in Chicago, Illinois. R2 is an opportunistic firm that invests its own capital alongside a select group of institutional partners, making it an active and highly vested manager and operator. R2 currently owns and operates more than 4 million square feet of commercial real estate in Chicago, Minneapolis and Milwaukee and has a multi-year track record of realizing superior risk-adjusted returns utilizing various investment strategies across market cycles. For more information, please visit www.R2.me.
About Skydeck
Skydeck LLC ("Skydeck"), based in Chicago, is a privately held firm investing capital on behalf of the Polsky family. Skydeck targets direct investments in real property and private-held lower-middle market companies. For more information, please visit www.skydeckllc.com.
R2 Companies
1130 W Monroe
Chicago, IL 60607
+1 312 226 9737
SOURCE R2 Companies
Share this article