ARCO/Murray to Buy Distressed Chicago Loft Office

Another century-old Randolph Street loft is poised for a reboot, this time driven by a construction heavyweight looking to consolidate its Chicago footprint.

Investors tied to design-build firm ARCO/Murray are under contract to buy the seven-story, 123,800-square-foot office building at 549 West Randolph Street for about $14 million, or $113 per square foot, according to people familiar with the deal, Costar reported.

That’s a steep discount from its pre-pandemic valuation and the latest sign of owner-users stepping into a battered office market.

ARCO/Murray already occupies roughly 8,500 square feet in the building, but the firm plans to expand to multiple floors over the next several years. The move would pull together staff now scattered across River North’s 311 West Huron Street and 500 West Monroe Street in the Loop. The strategy mirrors a transaction completed this week across the street at 550 West Randolph, where developer R2 and bike-parts maker SRAM teamed up to buy a similar loft for $14 million, with SRAM slated to occupy half the building.

The building at 549 Randolph, completed in 1909, is 39 percent vacant and has had a tumultuous run since its last sale.

Local investors bought it for $34.95 million in 2019, backed by a $29.8 million loan from Heitman, only to hand the keys back via a deed in lieu of foreclosure in late 2022. Office values across the city — particularly for older, non-trophy assets — have cratered since the pandemic, leaving landlords squeezed by rising rates, weak leasing and maturing debt.

Neither ARCO/Murray nor Heitman commented to the outlet on the pending deal.

ARCO/Murray, based in Downers Grove, a far-west Chicago suburb, and affiliated with national builder ARCO, has worked on everything from industrial boxes to Topgolf venues. Investors tied to the company also picked up a Downers Grove office building in 2022 for $3.15 million, signaling an appetite for strategic real estate plays as part of its broader growth.

The Randolph corridor, sitting at the hinge between Fulton Market’s boom and the Loop’s slower grind, has increasingly drawn firms willing to own rather than lease. Transit access is a major part of the pitch: the building sits near Metra and CTA lines and offers an easy jump to suburban expressways — a logical fit for a company with a large suburban workforce.

— Eric Weilbacher