The Timbers in Milwaukee is one of more than a dozen properties R2 Cos. purchased from Sara Investment Real Estate.
Chicago real estate investment firm R2 Cos. has gone on a $61.3 million buying spree of historic buildings adapted to new uses, picking up two portfolios from Madison, Wisconsin-based Sara Investment Real Estate and bulking up its presence in Minneapolis and Milwaukee.
“We achieved the majority of the goals we set out to when we acquired the properties,” said Ben Adank, vice president of business development for Sara, though he did not describe the transactions in detail. “It was the right time to sell.”
The Minneapolis portfolio is in Northeast, an arts district north of the Mississippi River that has become one of the city’s most desirable neighborhoods. Sara bought the properties in June 2015, paying $25.6 million to the Minneapolis company that renovated much of the area, Hillcrest Development.
In turn, R2 paid $35.7 million for the properties, including 4.2 acres of vacant land and five industrial buildings ranging from 65- to 114-years old that encompass about 288,000 square feet, according to sales documents available to CoStar.
The largest and most elaborate property is the Crown Center, a complex centered around a two-story, 142,000-square-foot brick structure that was built in 1904 and long used by Crown Iron Works, from which it gets its name. Hillcrest bought the site in 2008 and transformed its crumbling brick buildings into chic office and retail space. The revamp attracted a number of high-profile tenants and is now home to an outlet for modern furniture retailer Blu Dot, craft brewery Bauhaus Brew Labs and a medical device company called Tactile Medical, among others.
In Milwaukee, R2 paid Sara $25.6 million for a portion of the Tannery, a collection of historic industrial buildings on the south bank of the Menomonee River that date from 1846 to 1930. According to the development’s website, seven of the buildings on the site have been turned into office space, with names that reference earlier uses: the Bottling House, Grainery and Stables.
Sara bought into the Tannery in 2014, though in a statement it issued the firm disclosed neither the price nor precisely which buildings it had purchased.
Over the past month, only four transactions tied to the Tannery have appeared in the Wisconsin Department of Revenue’s log of real estate trades. Adank confirmed that the buildings included in the transaction with R2 were the Atlas, Stables, Trade Center and the largest at the site, the Timbers, a seven-story yellow brick structure that was constructed in 1891.
Tenants at the Timbers include Springfield College; Rising Medical Solutions, a medical bill review company; and the logistics firm M.E. Dey & Co.
Sales documents also indicate the deal included a property at 744 Bruce St. that appears to be vacant land.
Most of R2’s holdings are concentrated in its hometown of Chicago.
In addition to its latest acquisitions, the company owns two buildings in downtown Minneapolis, the Flour Exchange and 15 Building. R2 is also in the process of redeveloping a site it bought in October 2017 about two blocks west of the Crown Center, at 1325 Quincy, where it is turning an existing industrial building into a 100,000-square-foot creative office and retail space.
In Milwaukee, R2 is the owner and future developer of the downtown post office, a 941,000-square-foot building that sits on 9 acres of land.
Please see CoStar COMPS #4538542 for more information on this trasnaction.