CHICAGO, MILWAUKEE—R2 Cos., a Chicago-based real estate investment firm, has just bought for about $13.5 million the Post Office Building on Milwaukee's downtown riverfront. The iconic four-story structure was a build-to-suit for the United States Postal Service in 1968, and the agency has occupied it ever since. What will happen with the 9.3-acre site is not yet known, as the post office will continue to operate it as a central mail sorting facility for at least five more years.

“We've got a very patient outlook from a capital perspective," Matt Garrison, R2's managing principal, tells GlobeSt.com. “If we have to keep it for five years, or even ten, we're fine with that." In a way, the property's status opened up an opportunity for R2, which has started looking for deals in secondary Midwest markets. Investors that were attracted to a property with a rock-solid tenant like USPS also preferred one with a longer lease, and most developers looking for a quicker payday did not want to wait five years. "It was a bit of a tweener."

But Garrison says the company is already working on its plans. He envisions a mixed-use development “anchored by a large retailer, probably a grocer, with creative office space on the top floor,” which could also include a huge outdoor space. “It's a concrete loft with 24' clear ceilings everywhere; it needs to be opened up, but we are planning to cut spaces into the walls to let more natural light in.”