INDIANAPOLIS-Any city’s downtown would be overwhelmed when a 404,000-square-foot corporate campus came back on the market. For a city the size of Indianapolis, with 11.5 million square of office space in its CBD and a vacancy rate of 20.3% at the end of the fourth quarter 2010, backfilling such a space seemed inconceivable.
Yet, the former Eli Lilly Faris campus at 450 S. Meridian St. has been taken off the market. Rolls-Royce – the company that makes integrated power systems and aircraft engines, not the luxury car manufacturer – signed a long-term lease to occupy the $58 million campus, which Eli Lilly vacated in December 2009 when it reduced staff and relocated 1,000 employees to other locations.
“In this market, a 10,000-square-foot office lease usually makes the list for largest deals, and sometimes we have one for 75,000 square feet,” says Michael Cook, senior vice president of UGL Services-Indianapolis. “The Rolls-Royce deal is the largest lease transaction I can remember in more than a decade.”
Cook led the team that represented Rolls-Royce in lease negotiations. UGL team members included Dave Byard, senior vice president, and Eric Steiner, vice president. The UGL Services team represented Rolls-Royce through every step of the process from preliminary site selection, definition of total term occupancy and capital costs, through lease negotiations with Lilly and the procurement of an economic incentive package.
Jeff Luebker and Zane Brown of CB Richard Ellis are the listing agents for Faris Corporate Office Campus on behalf of Eli Lilly and Company.
Rolls-Royce will consolidate six local offices into the campus, which will now be called the Rolls-Royce Meridian Center. Next month, it will relocate roughly 2,500 employees into the 10-year-old property, which consists of two office towers with a conference center, gym and cafeteria in the middle. It offers roughly 320,000 square feet of class A office space, 40,000 square feet of conference and cafeteria space and another 40,000 square feet of gymnasium space.
“We all thought it would take an extremely unique circumstance for the campus to be re-occupied by a tenant other than Lilly,” he tells GlobeSt.com. “It was serendipity that Lilly vacated the space at the same time Rolls-Royce was looking for space that would consolidate its workforce and provide a more consistent corporate image.”
Rolls-Royce’s new headquarters location in the southeast quadrant of downtown creates a critical mass of corporate campuses that includes Eli Lilly and WellPoint, Cook contends. The company is the second largest private sector in the city behind Eli Lilly.
Cooks says the former Lilly campus is nearly perfect for Rolls-Royce’s needs. “It meets 97% of the company’s requirements,” he notes, adding that Lilly and Rolls-Royce are of a similar mind regarding space planning and usage. “Rolls-Royce was not going to go into just any facility. They were looking for a corporate campus [that would project] the image they were trying to cement worldwide.”
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