INDIANAPOLIS—The office markets in secondary cities have started to share in the recovery that gateway cities have enjoyed for several years, and investors have also started to trade properties in these regions. Cushman & Wakefield/Summit, for example, has just closed the $14.3 million sale of 8909 Purdue Rd., also known as College Park Plaza, a 180,637-square-foot class A office building located in Indianapolis's Northwest submarket.
C&W/Summit marketed the property on behalf of Griffin Capital Essential Asset REIT, Inc. Minneapolis-based Onward Investors, LLC purchased the asset, its first such acquisition in Indianapolis.
Republic Airways, which currently occupies 50% of the building, anchors the property. Other major tenants include Bindley Capital Partners, MyComputerCareer.edu, Staples Contract & Commercial Inc., and the US Department of Agriculture.
“The College Park Plaza transaction represents the current strength in the underlying fundamentals of the Indianapolis suburban office market,” says Alex Cantu, C&W/Summit capital markets vice president.
“Both regional and national investors recognize the value of Indianapolis's central location, strong local economy and the continual tightening in occupancy across all submarkets," he adds. "College Park Plaza provides investors excellent stability with the long term occupancy of Republic Airways and phenomenal upside through the leasing of the remaining vacancy.”
“A year ago, we were seeing the tech-heavy areas and energy-dependent cities like Houston generating most of the absorption,” John Sikaitis, JLL's managing director for local markets and office research, told GlobeSt.com. But “the overall geographic diversity has greatly improved, with many other markets making contributions.” Along with Cincinnati, Cleveland, Columbus, Indianapolis and even Detroit have all taken part in the recovery.
The Indianapolis office market showed solid growth in 2014, according to a recent report from JLL. The region saw nearly 240,000-square-feet in net absorption by year's end and 3.5-million-square-feet of investment activity. LaSalle Investment Management/Global Property Investment Fund purchased the Precedent Office Park, a 21-building office complex in the Keystone submarket. Furthermore, other class A downtown properties like the 515,000-square-foot Market Tower and the 705,292-square-feet Regions Tower changed hands during 2014.
“This improvement is due in part to stabilized local employment, with strong activity from companies in the high tech, business services, healthcare and legal sectors,” JLL said.
The C&W/Summit sales team representing Griffin Capital was led by Cantu, executive vice president Brian Nagle, director Jerrod Wigal and partners Matt Langfeldt and Rich Forslund. C&W/Summit will continue leasing and managing the property.
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
