Whitsett Plans to Convert 190,000 SF Former Indianapolis Star HQ into Apartments

by Adriana Pop, Associate Editor

The Whitsett Group is planning to redevelop the Indianapolis Star’s downtown headquarters into apartments. According to the Indianapolis Business Journal, the company has recently acquired the 190,000-square-foot property at 307 N. Pennsylvania Street and its 500-space parking garage from Star’s parent company, Virginia-based Gannett Co. Terms of the transaction were not disclosed.

Dubbed Pulliam Square, the mixed-use redevelopment project will bring 500 apartments contained in three buildings, along with a small retail component. Browning Day Mullins Dierdorf Architects is in charge with the plan’s preliminary design. Construction is expected to begin next summer, once the newspaper finalizes its move to a smaller location downtown.

Upon completion, Whitsett’s project will become one of the largest residential developments in downtown Indianapolis. According to Tikijian Associates, the 525-unit Riley Towers currently ranks as the area’s largest apartment complex, followed by Lockefield Gardens (493 units) and The Gardens on Canal Court (421 units).

In other news, the Indianapolis Business Journal reports that Eli Lilly and Co. has sold the Rolls-Royce Meridian Center in downtown Indianapolis to American Realty Capital for a reported $90 million. The complex had been on the market for about a year.

“The firm was interested in the property due to its long-term lease and high-quality tenant, and it’s in a central business location,” Lilly spokesman Ed Sagebiel told the newspaper.

Located on South Meridian Street, the building is fully occupied by aircraft engine maker Rolls Royce Corp. The company signed a long-term lease for the 405,000-square-foot property in March 2011 and invested about $20 million in renovations.

Formerly known as the Faris Campus, the Rolls-Royce Meridian Center offers more than 320,000 square feet of office space, a 48,000-square-foot fitness center, a cafeteria, a conference center and more than 2,000 parking spaces. In 2001, Lilly invested $58 million to develop the complex.

Photo credits: Browning Day Mullins Dierdorf Architects

Kite Realty Acquires Castleton Crossing in Indianapolis for $39M

by Adriana Pop, Associate Editor

Kite Realty Group Trust Inc. has purchased the 280,000-square-foot Castleton Crossing retail center in Indianapolis for $39 million. According to property records, Texas-based American National Insurance Co. is the seller of the property.

The center is fully leased and includes TJ Maxx, HomeGoods, Burlington Coat Factory and Shoe Carnival among its tenants. It is located at 5520 E. 82nd Street, near the intersection of I-465 and Allisonville Road and serves a 5-mile trade area with average household incomes of $87,600 and a population density of 168,400.

“Castleton Crossing is an excellent addition to our retail portfolio reflecting our continued success in acquiring high-quality shopping centers in off-market transactions. This property is located at one of the premier intersections in Indianapolis,” company Chairman and CEO John A. Kite said in a written statement.

In April, the Indianapolis-based real estate investment trust has also purchased the 224,000-square-foot Cool Springs Market in Franklin near Nashville for $37.5 million. The property is 95 percent occupied, with Dick’s Sporting Goods, Marshall’s and JoAnn Fabrics as anchor tenants.  

In regional news, the Indianapolis Business Journal reports that Investment Property Advisors of Valparaiso and the city of Muncie are planning to develop a $60 million mixed-use project near the Ball State University campus.

The development would replace the University Square building located in the Village commercial district. Plans call for 228 apartments, as well as commercial space and an approximately 340-space parking garage.

The project is currently being reviewed by the Muncie Redevelopment Commission. Construction on the parking facility could be completed by November, while the first residents are expected to move in by the fall of 2014.

Photo credits: kiterealty.com

Milhaus’s $26M Downtown Redevelopment Obtains Rezoning, Design Approvals

by Adriana Pop, Associate Editor

Milhaus Development has received design and rezoning approvals from the Historic Preservation Commission to repurpose the former Mitchell & Scott industrial site in downtown Indianapolis into a five-building apartment complex.  

Located in the Chatham-Arch historic district, the $26 million project will bring a total of 236 apartments, including studio, one-, two- and three-bedroom units. Rents will range between $900 and $2,000 per month, Milhaus announced. 

Plans call for the construction of four new buildings, about four or five stories tall, and include the complete renovation of the historic two-story former office facility of Mitchel & Scott Machine Co. Approximately 7,000 square feet of first floor space could be developed as either residential or commercial.

Construction on the project is expected to begin this summer and be complete by next spring. Upon completion, the complex will offer residents an abundance of community space, an outdoor entertainment deck, a plaza, pool, an indoor bar, art gallery and lounge. 

“This new project reflects our company mission to rebuild neighborhoods and is an important link between Lockerbie and Chatham-Arch. It will bolster the local economy with additional shoppers, diners and ticket buyers,” said David Leazenby, principal of Milhaus Development.

For the project’s design, Milhaus has partnered with Blackline Studio for Architecture, Anderson + Bohlander Landscape Architecture and CEC Engineering. Milhaus Construction LLC is in charge of construction, while The Gene B. Glick Co. will handle leasing.

In downtown Indianapolis, Milhaus is also developing the mixed-use, multi-phase residential project known as “Artistry”. The company’s recently completed projects in the region include the Mozzo apartments in the heart of the city’s downtown, the Solana Apartments at the Crossing near Keystone at the Crossing, as well as the Penn Circle Apartments in Carmel.

Photo credits: http://www.milhausventures.com

Fishers Medical Office Building Wins BOMA’s TOBY Award

by Adriana Pop, Associate Editor

The Building Owners and Managers Association (BOMA) has named the St. Vincent Medical Center Northeast, a medical office building in Fishers, the North Central Region winner of The Outstanding Building of the Year (TOBY) program.

Developed and managed by Duke Realty, the approximately 119,800-square-foot facility at 13914 Southeastern Parkway opened in 2008. The building is part of Ascension Health’s newly built St. Vincent Fishers Hospital.

“When St. Vincent Medical Center Northeast opened, it was the first freestanding emergency department in the state. We’re very proud that this successful facility is being replicated by other hospital systems in Indiana and throughout the United States,” said Ryan Rothacker, Duke Realty’s vice president of Asset Management & Customer Service.

Earlier this year, the facility won the local Indianapolis TOBY award, qualifying it to compete in the North Central Region program. Regional winners will now enter the final, international level of the competition. The finalist will be announced live at the TOBY banquet on June 25 during the BOMA International 2013 Every Building Conference & EXPO in San Diego.

In other news, during a meeting of the Broad Ripple Village Association, local developer Browning Investments has unveiled its plans for a proposed $18 million mixed-use apartment project on College Avenue north of Broad Ripple Avenue in Indianapolis.

According to Indystar.com, the five-story building will be anchored by a 35,000-square-foot ground floor specialty grocer. Plans also call for 80 to 88 apartments and a 275-space parking garage.

The developer and its partner Sheehan Construction will now need to rezone a portion of the site to allow for retail. They may also apply for tax increment financing, the newspaper reports.

 “This would be a good location for a specialty-type grocer because of the abundance of nearby housing and upscale incomes”, said Jamie Browning, vice president of real estate development for Browning.

Photo credits: http://www.northwestradiology.com

Hertz Investment Acquires 650,000 SF Office Property in Indianapolis

by Adriana Pop, Associate Editor

Hertz Investment Group of Santa Monica has closed on the purchase of the 650,000-square-foot Capital Center Office Tower Complex in Indianapolis.The seller was Invesco Real Estate, which was represented by the local office of CBRE.

According to the Indianapolis Business Journal, the complex is the 12th-largest in the city and the fifth-largest downtown.

Located on Illinois Street, between Ohio and New York streets, the two-building Class A office property is comprised of the 17-story North Tower and the 22-story South Tower. Amenities include an underground parking structure with 525 spaces, two restaurants, conference facilities, a sundry shop, a coffee shop and a fitness center.  

Connected by a lobby atrium, the buildings are 78 percent leased to tenants including Cummins, the Associated Press, BKD CPAs & Advisors, Fifth Third Bank, Burgess and Niple, HCC Medical Insurance Services, RCR Technology and The Huntington National Bank. The property’s net operating income is $4.5 million, the newspaper reports.  

“We are delighted to take on the Capital Center towers, with an extraordinary existing roster of national and regional leaders who need to be here, at the very epicenter of Indianapolis. The project has high quality amenities – on site and nearby – which are simply not matched in the City of Indianapolis,” Gary Horwitz, president of Hertz Investment Group said in a prepared statement.

In other news, the Indianapolis Business Journal reports that two local developers are repurposing the former Litho Press building into 111 apartment units.The 105-year-old historic property is located on North Capitol Avenue in downtown Indianapolis.

The Whitsett Group and Ambrose Property Group are behind the $16 million redevelopment project known as 800 North Capitol Apartments. About forty percent of the units will be affordable.

Upon completion towards the end of the year, the new complex will include an interior courtyard and rooftop pool. Local architecture firm DkGr Architects is the designer of the project.

According to George Tikijian of brokerage firm Tikijian Associates, the downtown apartment market has very good absorption. Currently at 96 percent, the area’s occupancy level is expected to remain strong this year, even as new units are being delivered.

Photo credits: http://www.hertzgroup.com/capitalcenter.html

Hendricks Breaks Ground on $30M Redevelopment of Retail Strip in Indianapolis

by Adriana Pop, Associate Editor

Construction has begun on the $30 million Ironworks at Keystone apartment and retail development in suburban Indianapolis.

Developed by Hendricks Commercial Properties of Wisconsin, the five-story mixed-use project will replace the vacant Woodfield Centre retail strip at the southwest corner of Keystone Avenue and East 86th Street with 120 high-end apartments and 36,000 square feet of ground-level retail space. According to the Indianapolis Business Journal, a 10,000-square-feet-restaurant could soon become the property’s anchor tenant. The developer expects to have a commitment by June, the newspaper reports.

Plans also call for 350 surface parking spaces for shoppers and a 150-space underground garage for residents. Construction is expected to be complete by next summer.

“This is a great day for Hendricks Commercial Properties,” Hendricks President Rob Gerbitz said in a statement. “We are excited to build our first development in Indianapolis, and we’ve assembled a team of exceptional local companies to ensure this project is a success.”

The company’s local partners include Shiel Sexton (construction), Sitehawk Retail Real Estate (commercial leasing), Buckingham Companies (residential leasing and management), Wooden & McLaughlin LLP (legal), Civil and Environmental Consultants, Inc. (environmental and engineering), and EUA (architect).

Hendricks purchased the 6.4-acre development site in 2012 from Jacksonville, Fla.-based Everbank. Jordan Klink, an investment specialist with the local office of Marcus & Millichap told the newspaper that Ironworks could be fully leased by the time of its opening next year.

In other news, leading owner, operator and developer of industrial real estate Prologis Inc. has signed a build-to-suit agreement with Subaru of America for a new 715,000-square-foot distribution center. The facility will be located in the Northwest Indianapolis submarket at Prologis Park Lebanon.

“The record low supply of large industrial facilities continues to drive build-to-suit solutions in many markets around the country, including Indianapolis. With occupancies rising for the past two years, Indianapolis remains a compelling regional market,” said Jim McGill, senior vice president, Prologis.

Within the Indianapolis market, Prologis owns and manages approximately 5.1 million square feet of logistics and distribution space.

Photo credits: Hendricks Commercial Properties

Eli Lilly Plans $180M Expansion of Insulin Cartridge Plant in Indianapolis

by Adriana Pop, Associate Editor

Locally based pharmaceutical giant Eli Lilly and Co. is considering an additional $180 million investment in its Indianapolis-based insulin manufacturing operations.

Plans call for an 84,000-square-foot expansion of the company’s $140 million plant currently under construction in the southwest area of downtown Indianapolis. The new facility will increase the company’s insulin-active-ingredient manufacturing capacity and create a second insulin-cartridge-filling line. The production area is expected to become operational in March 2014, while construction on the insulin-cartridge-filling line would be complete by 2016.

Once it becomes fully operational, the new plant would employ about 175 full-time, high- skill workers. Lilly has also announced it would spend about $80 million on several ancillary projects in the city, including a product-inspection center.

“Lilly could have made this investment anywhere in the world, but the fact that it continues to expand in Indianapolis is a testament to the great business climate and workforce in our city,” said Mayor Greg Ballard. “I want to underscore that despite challenging economic times, in the past six months, Lilly has announced proposed plans to invest more than a quarter of a billion dollars in our city and create jobs for many highly skilled people. This is great news for Indianapolis.”

In multifamily development news, Pedcor Investments is planning a $13.1 million affordable housing complex for seniors on the west side of Indianapolis. According to the Indianapolis Business Journal, the project has recently been awarded $1.2 million in federal tax credits.

Called The Retreat on Washington, the new development will be located on the site of the former Central State Hospital campus, along West Washington Street. The project will consist of a three-story building with one- and two-bedroom units. The one-bedroom apartments are expected to rent from $300 to $625, while rents for the two-bedroom homes will range from $350 to $725. Construction could begin in August or September and last until next fall.

In December, Pedcor completed another affordable housing development at the 150-acre site of the former psychiatric hospital which closed in 1994. The $20 million Steeples on Washington complex offers 144 apartments to residents earning 60 percent or less of the area’s median income. The seven-building project has received $2 million in federal tax credits, the newspaper reports.

Photo credits: lilly.com/news/media-center

Vista Capital Arranges $7.7M CMBS Loan for Extended-Stay Property in Indianapolis

by Adriana Pop, Associate Editor

Vista Capital Co. has negotiated and closed $7.7 million of financing for the five-story Staybridge Suites hotel in downtown Indianapolis. The 10-year CMBS loan was provided by a European-based group of investors who were attracted by the market and the strong performance of the asset.

The extended-stay, InterContinental-branded hotel was built in 2000 by its current owner. The property offers 146 rooms, along with a variety of amenities, including a business center, a fitness center and an indoor pool.

The pricing for the non-recourse, fixed-rate financing arranged by the Los Angeles-based real estate capital intermediary is approximately 4.5 percent. The funds will retire the existing loan on the property, and support a renovation project in 2015.

“Ownership was able to accomplish a number of difficult objectives via this transaction,” said Zak Selbert, the founding principal at Vista Capital. “Despite the fact that many lenders are over-allocated in hospitality paper, the borrower benefited from Vista’s ability to structure long-term, fixed-rate hospitality financing that will guarantee a smooth renovation in 2015. The financing will also decrease the owner’s cost of capital,” Selbert added.

This is the second hotel financing transaction Vista Capital has closed in the last four months in metropolitan Indianapolis. In November, the company announced it arranged $17.3 million of financing for the Crowne Plaza Union Station. Located in the heart of the city’s downtown area, the 273-room hotel is listed in the National Register of Historic Places.

In other news, Greystone announced it has closed a $34.6 million HUD loan for Lake Castleton Apartments, a 1,261 unit multifamily apartment community in Indianapolis.

Greystone insured Lake Castleton through a Section 223(a)(7) loan, just 44 days after submission.

“The Section 223(a)(7) program is an expedited way for a borrower who already has a HUD insured loan to refinance its loan for the purpose of lowering the interest rate. We are proud of our experience working with HUD and delighted to be able to provide financing quickly and at the extremely attractive interest rates,” said Betsy Vartanian, head of Greystone’s Federal Housing Administration business.

Photo credits: http://www.ihg.com

Mayor Greg Ballard Plans Redevelopment of Former Market Square Arena Site

by Adriana Pop, Associate Editor

The City of Indianapolis is ready to take another shot at redeveloping the former Market Square Arena (MSA).

During his annual State of the City speech, Mayor Greg Ballard announced that his administration is now seeking plans and proposals to repurpose the northern half of the former MSA site into something better than surface parking.

IndyStar reports that the officials’ vision for the nearly two-acre parcel at the northeastern corner of Market and Alabama streets in downtown Indianapolis involves a high-rise building with apartments or condominiums on the upper floors, as well as a major retail component on the first floor. Officials also hope that the project would help spur development on the southern half of the city-owned site.

The announcement marks the city’s third attempt to repurpose the land. In 2004, a group of investors called Market Square Partners proposed a $140 million project that would have brought more than 400 condominiums, 175,000 square feet of retail and 700 parking spaces on both lots. Two years later however, the project crumbled after the developers could not to sell enough condos to meet financing requirements.

In 2007, the city was presented with another two development proposals. As recession hit, both projects eventually fell through.

Built in 1973 for $23 million, the arena was the Indiana Pacers’ home until it was imploded in 2001. The site hosted a multitude of important events, such as Michael Jordan’s first return from retirement in 1995, or Elvis Presley’s final concert in June 1977.

“It has been nearly 36 years since “Elvis left the building”. It is time for the MSA space to make its architectural mark again on our city, to bring new residents and retail to the near east side, and to put that prime piece of real estate back on the property tax rolls”, Ballard said.

Developers will be able to submit proposals until April 22.

Photo credits: Bob Hall via Wikimedia Commons

Baldwin & Lyons to Spend $20M-$30M on New HQ Facility in Carmel

by Adriana Pop, Associate Editor

Baldwin & Lyons, one of Indiana’s largest insurance companies, plans to relocate its headquarters from downtown Indianapolis to Carmel. According to the Indianapolis Business Journal, the company’s lease for 81,000 square feet in the Landmark Center at 1099 N. Meridian St. will expire in August.

In Carmel, Baldwin & Lyons has agreed to invest between $20 million and $30 million to acquire and improve a 184,000 square-foot facility at 111 Congressional Blvd. Rick Trimpe and John Vandenbark of CBRE represented the seller, Lauth Property Group, while Baldwin & Lyons was represented by Rich Forslund and Matt Waggoner of Summit Realty.

In February 2012, Lauth purchased the office building from Nationwide Mutual Insurance Co. for $7.1 million and spent an additional $2 million to upgrade the property.

Baldwin & Lyons currently employs about 350 people in Indiana and intends to create another 133 jobs by 2018. If it meets its hiring target, the Hoosier insurer will receive up to $3.5 million in conditional tax credits from the Indiana Economic Development Corp., as well as $200,000 in training grants. The city of Carmel is considering additional incentives, the company announced.

“We are very excited to welcome Baldwin & Lyons to the Carmel community,” said Carmel Mayor Jim Brainard. “This is exactly the type of investment the city is looking for in its economic development partners. When a company with a solid reputation such as Baldwin & Lyons decides to locate its headquarters in Carmel and expand its facilities here, the city realizes a long-term gain through local investment and job creation. This is not only good for Carmel, but the region as well.”

Founded over 80 years ago in Indianapolis, Baldwin & Lyons provides property and casualty insurance products and risk management services. In 2012, the global insurer set several revenue and profit records, ending the year with nearly $1 billion in assets.

Photo credits: http://www.lauth.net