“Loft office buildings were teeming with demand and growing in value before the COVID-19 pandemic upended demand for workspace. Chicago developer R2 is betting they will again.
“The firm earlier this week acquired the vintage brick-and-timber office property at 303 W. Erie St., R2 CEO Matt Garrison confirmed. The sale has yet to appear in Cook County online property records, but a source familiar with the deal said R2 paid $7.5 million for the six-story, 70,000-square-foot building at the southwest corner of Erie and Franklin streets. That purchase price was 50% below the $15 million price that the seller, a venture of New York-based Alvarez & Marsal Property Investments, paid for the building in 2017.
“Yet the price at more than $100 per square foot is also higher than what many larger downtown office buildings have traded for over the past couple of years, demonstrating R2’s confidence that loft office buildings have a bright future as demand stabilizes for workspace in the Loop and its environs.
“Some buildings of that ilk are being targeted by developers as candidates to be turned into residential buildings, given weak office fundamentals and strong demand for rental units downtown.
“But R2 sees a future for boutique offices. The developer cut its teeth in the Chicago office market on owning creative office buildings coming out of the Great Recession, taking advantage of a boom in demand from tech companies for older buildings updated with modern office amenities. Now it is starting to wager on them again, this time taking advantage of depressed office property values.
“Garrison sees 303 W. Erie and vintage buildings like it as desirable office environments that can be profitable for landlords that retain tenants.
“R2 has been an active player in the Chicago office scene over the past few years despite the broader malaise of the sector. Among other projects, the developer early last year bought the 41-story office building at 150 N. Michigan Ave., which it recently rebranded as the Diamond, and is overseeing a renovation of the Chicago Board of Trade Building in the Loop.” (Ecker, Crain’s Chicago Business, 8/15/25)