'There's Too Much Blood': Why RCS' $132.5M Chicago Office Buy Defies Recent Deals

Real Capital Solutions founder and CEO Marcel Arsenault has unbridled confidence in the long-term outlook of the premium office market — and the bankroll to back his contrarian play. 

In mid-January, his firm shelled out for a high-quality Chicago office tower along the river at a price point not seen in four years, eschewing a run on the bargain bin that has defined the city’s office market in the past 14 months.  

Arsenault is taking a different approach.

“We can buy empty buildings. We know how to do that,” Arsenault said. “We just don't like the path forward. It's like trench warfare, and we don't like trench warfare. There's too much blood. And in the field, by the time you're done, some of that blood's yours.”

The industry veteran, who has helmed RCS for more than four decades, told Bisnow that investing in quality assets positions the company to triumph in battles with other property owners fighting over the same tenant pool.

The 35-story Magnificent Mile building the Colorado-based investor acquired for $132.5M is roughly 87% leased and has undergone $17M in renovations to its lobby, amenities and tenant experience in recent years.

The purchase wiped out all equity for the seller, a Walton Street Capital venture, and represented a discount to the $160M loan ING provided to the venture in a 2019 refinance. 

Although RCS secured the building at a discount, it was a different strategy from other recent office offensives. 

The dominant thought process behind Chicago office property purchases since the end of 2024 has centered on opportunistic investors scooping up distressed assets at significant markdowns. Then, new owners implement aggressive capital improvement and leasing plans. 

Last week, 601W Cos. and David Werner Real Estate Investments paid $41M for the 53% vacant, 1.4M SF office building at 175 W. Jackson Blvd. In November, Menashe Properties scooped up 125 S. Wacker Drive for $51.5M, a deal CEO Jordan Menashe described as a “pure lease-up play.” 

While other companies are acquiring properties with large swaths of vacancy and plotting courses to lease them up over time, Arsenault prefers to take over top-shelf buildings with higher in-place levels of occupancy — even if it means buying at a higher price. 

“We have to win the leasing wars, and that's what we do,” Arsenault said. “We don't just buy deeply discounted assets. We're buying assets that are leasable.”

RCS' Michigan Avenue purchase was about $177 per SF, well above Menashe Properties' $80-per-SF Wacker Drive acquisition and 601W Cos. and David Werner Real Estate Investments' Jackson Boulevard purchase of about $29 per SF. 

RCS’ deal for the nearly 748K SF office tower at 401 N. Michigan Ave. marked the highest price point for a Chicago office building since 2022. Arsenault said the acquisition was part of a strategy to deploy hundreds of millions into top-shelf office assets across the country in 2026. 

The company plans to make $733M worth of deals in 2026, almost all in office, or another $600M following the Michigan Avenue deal. RCS has hundreds of millions in cash to facilitate the purchases — a result of 26 office building sales between 2021 and 2023, Arsenault said.

RCS didn’t wait for the new year to begin buying. 

From the end of 2024 through 2025, it bought 10 office buildings, with the cash and the backing of partner banks to propel the acquisition spree, which is expected to accelerate this year. Arsenault said the company waited patiently for asset prices to come down, and they dropped further than it anticipated. 

“When things get very expensive, we go to cash, and when they get very cheap, we come out of the bunker and we start buying,” Arsenault said. 

RCS and Arsenault have navigated a pair of large-scale real estate disasters that the CEO said have prepared them for this market. RCS still has teams that it employed during the savings and loan crisis in the 1980s and early 1990s, as well as during the Global Financial Crisis in 2008, Arsenault said. 

Arsenault said the playbook for the “third rodeo” follows the same road map as the previous two major periods of distress: sell a lot of buildings, wait for the distress to arrive and then deploy capital. He said the discounts on office buildings he is seeing in 2026 are “much deeper” than during the Great Recession.

At the same time, when RCS is buying office buildings, it is making conservative projections on how fast it can lease them up. The company factors in potential headwinds like a recession or artificial intelligence weakening tenant demand, Arsenault said. 

“We tend to be safe and kind of negative, but I'm more worried about a recession in ’26, and we're prepared for that too,” Arsenault said. “We're prepared for AI. We're prepared for recession. We're buying things at such deep discount that frankly, it doesn't matter. We could lose a lot of tenants, and we'll still be fine.”

Arsenault said people who won’t touch Chicago office or don’t understand why anyone would buy it “don’t know how to read history.” The city has a long history of values rising and crashing, and people have similar concerns over long-term viability each time, he said.

“If you look at real estate and study it, it's a vicious cycle, and most people forget that,” Arsenault said. “At the bottom of the market, they think it can never get better. At the top of the market, they think it can never get bad. And they're wrong on both counts.”