R2 Companies, JDI Realty buy Lake County Innovation Center

R2 Companies has expanded its local holdings with the acquisition of a million-square-foot office and research complex in a northern suburb.

The Innovation Park Lake County campus, on Innovation Way in Libertyville, has been sold to a joint venture of R2 and JDI Realty for $35 million, Crain’s reported.

The seller, Beco Management, acquired the site in 2013 for $9.5 million and invested nearly $40 million in its transformation into a modern office and research hub.

Beco sold the property for less than its redevelopment costs, despite its high-quality tenants and amenities, amid the grim post-pandemic office market. Eastdil Secured brokers Bryan Rosenberg and David Caprile facilitated the traction on behalf of Beco.

The acquisition poses some risks to the buyers, given market conditions, but R2 CEO Matt Garrison is optimistic. The plan is to further improve amenities and services and create spec office spaces of various sizes, he said.

Innovation Park is 68 percent leased to tenants including Valent BioSciences, Medline Industries and Bristol Myers Squibb. Those tenants have contributed nearly $70 million in contractual base rent, providing a steady stream of cash flow. However, Medline’s exit in 2026 adds urgency to the buyers’ leasing strategies.

R2 and JDI aim to build on the progress made by Beco, particularly in attracting nontraditional tenants. With modern amenities, strong connectivity to the Interstate 294 corridor and a history of attracting top-tier companies, the property stands out in a suburban market still adjusting to post-pandemic realities.

The transaction continues R2’s opportunistic approach to real estate investment during a period of market dislocation. Earlier this year, R2 acquired 150 North Michigan Avenue for $60 million, about half its 2017 valuation.

— Andrew Terrell