SRAM, R2 Cos. Take Ownership Stakes in Chicago Headquarters

A Fulton Market pioneer is planting a new flag just east of its old turf, putting a stake on a century-old loft for its growing headquarters.

Bike-parts maker SRAM teamed up with local developer R2 Companies to overhaul and partly occupy 550 West Randolph Street, a seven-story building that’s been vacant for years but sits in the slipstream between Fulton Market’s boom and the more traditional office core to the east.

The joint venture bought the 168,750-square-foot property, first reported by CoStar. The expected sale price was roughly $14 million, or $83 per square foot, though the number hasn’t surfaced in public records.

SRAM will take about half the building for its global headquarters, with R2 steering the redevelopment toward a 2027 completion.

Sram will exit 1KFulton, at 1000 West Fulton, deepening uncertainty in Fulton Market for Massachusetts-based landlord Office Properties Income Trust, which filed for Chapter 11 bankruptcy last month and is facing major tenancy losses.

The move gives SRAM something most tenants aren’t in this market: equity in its own future. It’s a twist on current office-market math, where investors are chasing distressed pricing and tenants are upgrading space to bolster in-person work. Here, the tenant becomes part-owner.

R2 CEO Matt Garrison said the deal offers the security of a built-in anchor lease and shared upside. He said R2 and SRAM are aligned culturally and financially on the project’s vision.

The seller, W.P. Carey, offloaded the building after roughly 35 years as part of a global office liquidation and pivot toward industrial assets. Before hiring Cushman & Wakefield brokers to run the sale, the New York firm had pitched the site as ripe for expansion.

R2 and SRAM instead will stick with the 1909 structure, adding new interiors but keeping the original floors. Some space is slated to be delivered as soon as next summer, with the full overhaul expected by summer 2027. Amenities will include a gym, conference center, lounge, rooftop deck and surface parking, plus quick access to restaurants.

SRAM won’t settle for vanilla office space. Its buildout will mirror — and expand on — its 1KFulton digs, which famously feature a test track and fan hub for Tour de France season. The company plans another track at Randolph, along with design, testing, sales, service and machine-shop functions. About 250 employees, plus staff from the nonprofit World Bicycle Relief, will make the move.

— Eric Weilbacher