John Merrill, a senior vice president with CB Richard Ellis' Investment Properties Institutional Group, says that Meridian Plaza generated strong interest from buyers across the nation and that more than a dozen qualified investors bid on the property. Merrill, who represented the seller, attributes the demand to the property's "excellent" location along the city's main north/south thoroughfare, and its history of high occupancies and consistent performance.
For new owner Argus, Meridian Plaza fits well into its current acquisition strategy. The company prefers to buy class A properties in class A locations that are at least 90% occupied with upside potential from leases at current market rates. Pricing also should be well below replacement cost. According to Argus, the replacement cost for Meridian Plaza is $170 to $175 per sf.
"This is an opportunistic value buy in Carmel, the fastest growing submarket in Indianapolis with a strong location play," Paul Gaines, senior vice president and chief investment officer for Argus, says in a statement. "We have an office complex adjacent to the best residential neighborhoods in the best school system and close to upmarket retail centers. Tenants can drive out, make a left turn and they're on an Interstate that loops the city, 20 minutes from the airport, 20 minutes from Downtown."
After the acquisition, Argus selected CB Richard Ellis to lease and manage Meridian Plaza, which is currently 92% occupied. Dan Richardson, first vice president for office properties with CBRE, says that demand for office space in the north Indianapolis submarket is at a 10-year high. "With Hamilton County on fire, growing at 30% annually and Carmel in the center of it, there is 530,000 sf of new office construction coming into this submarket to accommodate that demand with one 100,000-sf building already open."
Situated on 20 acres, Meridian Plaza is home to 52 businesses. Major tenants include Charter One Bank at 33,545 sf, Decision One Mortgage at 17,568 sf, Officescape at 15,416 sf, American Health Network at 16,468 sf and Lone Star Industries/Buzzi Unicem with 15,887 sf.
LaSalle Bank of Chicago provided a $27.6-million in fixed-rate, 10-year permanent financing for the acquisition. The seller, Hartford-based Talcott Realty Investors, bought the property in 2002.
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