The historic Flat Iron Arts Building in Wicker Park, where for decades artists and other creative businesses have rented out studio spaces, was just purchased for $19.7 million, but the new landlords said there’s no reason to fear drastic change.
“The previous owner did a great job keeping the property as it is,” said Savas Er, principal of Chicago-based North American Real Estate. “It’s a well-oiled machine, so we’re not planning changes at this point.”
Er and partner David “Buzz” Ruttenberg, the founder of real estate developer Belgravia Group, bought the three-story terra cotta building at the intersection of Milwaukee Avenue and North Avenue from Berger Realty Group. It was built in 1918, converted to artists’ studios in the late 1960s, and Berger, which county records show paid $346,000 for the property in 1993, preserved its upper floors as affordable studios even as the surrounding neighborhood gentrified.
Erica Berger, proprietor of Berger Realty Group, which also owns the Fine Arts Building at 410 S. Michigan Ave., said she wasn’t simply looking for the highest bidder. She wanted a local buyer who would sustain the building’s community.
“It’s one of the only remaining buildings in Wicker Park with spaces like that, so we were looking for someone with a similar ethos, and Buzz is a huge philanthropist in the arts,” she said.
Berger won’t be surprised if Flat Iron eventually sees some change. The new owners need to generate enough revenue to maintain and improve the century-old structure, while preserving its artistic legacy.
Get the latest business news headlines, delivered to your inbox midday weekdays.
“Owning old buildings isn’t easy,” she said, “so I don’t know what the future holds, but I’m optimistic and hopeful Savas and Buzz will figure it out.”
Competition for the 63,000-squre-foot property at 1579 N. Milwaukee Ave. was intense, with more than 100 investors expressing interest, according to Patrick Forkin, a director of Baum Realty Group, which brokered the deal. The brokers began sifting through potential buyers, identifying ones with the financial heft to close the deal and a commitment to Berger’s vision.
“We had a wide array of choices, but when it came to Buzz and Savas, we were very confidant,” Forkin said.
Er said the location, at the center of Wicker Park’s nightlife and retail district and near the CTA Blue Line stop on Damen Ave., helps make Flat Iron a worthwhile purchase. About half its 21,000 square feet of ground-floor retail space is available, including a corner location left vacant when Bank of America’s lease expired in June, and they are already talking to potential tenants, including several entertainment venues and restaurants.
“This was a once-in-a-lifetime opportunity to own a landmark location,” Er said. “We don’t see properties like this come to market often, especially in great buildings like this.”
There is also a possible opportunity to transform the building’s giant rooftop into an amenity such as a fitness center, lounge or cafe, Er added. But that’s a long way off and will take planning.
“I’d love to see something new on the rooftop, but is it something we are looking at to do immediately? Not at all. We want to own this building for a very long time.”