R2 Companies has Deal to Buy Vacant Chicago Loft Offices

As some landlords exit the Chicago office game, others are doubling down.

R2 Companies is in talks to acquire a seven-story loft office building at 550 West Randolph Street as seller W.P. Carey unwinds its global office holdings, CoStar reported.

The 168,750-square-foot building, which dates back to 1909, has long sat vacant despite previous efforts by the New York real estate investment trust to land a large anchor tenant and expand the property into an adjacent 11,500-square-foot surface parking lot.

The site sits just west of Ogilvie Transportation Center and a short walk from the Fulton Market District, one of Chicago’s strongest leasing submarkets.

W.P. Carey, which acquired the building in 1990, listed the property in January with a Cushman & Wakefield team led by Tom Sitz, Cody Hundertmark and Dan Deuter. The deal is still in negotiations and could still fall apart, especially as developers weigh macroeconomic uncertainty and cost pressures tied to the potential for a global tariff war.

The price was not disclosed, and R2 has not publicly commented.

If finalized, the deal would mark another addition to R2’s growing portfolio in the West Loop and downtown core. The firm is known for redeveloping vintage properties into modern office, residential or mixed-use assets, often targeting distressed or underutilized buildings in need of repositioning.

Recent projects include a 117-unit office-to-apartment conversion with Campari Group at 79 West Monroe Street, the city’s first publicly subsidized conversion. It’s also working on upgrades to 150 North Michigan Avenue tower after buying the building at a nearly 50 percent discount from a venture of CBRE Investment Management last year.

The 550 West Randolph deal stands to show continued movement among office owners retreating from the sector.

W.P. Carey announced in 2023 it would exit office real estate, spinning off 59 properties into a new REIT, Net Lease Office Properties. That spinoff did not include the Randolph building, but the firm had 39 remaining office assets globally at the end of last year, according to CoStar.

If the sale closes, the transaction would pair one firm’s sector retreat with another’s ongoing bet on value-add repositioning in core downtown locations.

— Judah Duke