Chicago real estate firm partners with Goldman Sachs on 4 deals in two days

August 22, 2014  |  Staff Writer  |  Print Article  |  Email this Article

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R2, a new Chicago based real estate investment platform comprised of South Street Capital Principals, and AIMS Real Estate (AIMS RE), a business unit of Goldman Sachs Asset Management (GSAM), announced a strategic partnership to acquire & recapitalize four creative office assets in Chicago & Minneapolis.

The R2 brand has been developed and launched by members of South Street Capital (SSC) as a new institutional investment platform, and will be led by Matt Garrison. In Chicago, R2 & AIMS RE announced the recapitalization of two well known loft office buildings, 900 North Franklin and 224 North Desplaines, located in Chicago’s River North and West Loop neighborhoods, respectively. SSC originally acquired 900 North Franklin in 2012 and 224 North
Desplaines in 2013 in distressed situations, bringing both properties from troubled assets to approximately 100% occupancy.

“We’re thrilled to provide a significant return to our original investment partners, and continue to participate in the management and upside of these assets with Goldman Sachs and this exciting new platform,” said Matt Garrison, Managing Principal of South Street Capital. “While substantial value has already been created, we believe in the buildings & locations, and believe that considerable upside exists as the creative, loft-office space consolidates and becomes an institutional asset class. Our goal is to achieve scale within Chicago, Minneapolis and beyond. This partnership with Goldman Sachs gives us a strategic advantage.”

Both R2 and AIMS RE had independently identified Minneapolis as a target market in which to acquire creative office assets. AIMS RE recently acquired the TractorWorks Building, an approximately 350,000 square foot creative loft office building that anchors the North Loop sub-market. In a strategic partnership, R2 and AIMS RE have acquired two complementary assets, 15-33 South Fifth Street, totaling approximately 181,000 square feet. The 15-33 buildings border the Central Business District (CBD) and North Loop neighborhoods and are Skyway connected to a proposed Conrad Hotel development. They are also adjacent to the light rail line and Target Field.

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