$85M for 3-Building Indianapolis Office Portfolio
- Nov 21, 2011
November 21, 2011
By Nicholas Ziegler, News Editor
Despite “weak” demand for suburban Midwest office properties, an institutional investor has snapped up Intech I, II and III, a 433,972-square-foot portfolio in the Northwest market of Indianapolis. Transwestern’s investment-services group, in conjunction with Jones Lang LaSalle, brokered the sale on behalf of the seller, Romanek Properties Ltd.
“Recently, there have been very few large suburban office transactions in the Midwest as investor demand for suburban office product has remained weak,” Gary Nussbaum, managing director with Transwestern, said. “However, institutional investors are still attracted to modern, Class A core suburban office assets if they have credit tenancy and long-term leases.”
Situated in Intech Park, the largest self-contained office development in Indiana, the property is 97 percent occupied, anchored by the U.S. General Services Administration. The GSA leases 56 percent of the project on behalf of various units within the Department of Homeland Security. Intech I is a 140,231 square foot building located at 6325 Digital Way. Its major tenants include Indiana Wesleyan University, TriMedx and the GSA. Intech II, located at 6650 Telecom Dr., is a 141,466 square foot building that is 100 percent occupied, 94.6 percent of which is the GSA. Intech III is a 152,230-square-foot building located at 6600 Telecom Dr. Its largest tenants include the GSA and Blackboard Inc.
According to a third-quarter report by Marcus & Millichap, the Indianapolis market is still seeing some downward trends, but positive indicators have begun to appear. Office vacancy rose 120 basis points in the first two quarters of this year, but, “after 14 consecutive quarters of trending upward, vacancy levels will improve 40 basis points in the latter half of the year to 20.7 percent,” the report notes. Additionally, construction in the city has slowed to a crawl, with only 16,000 square feet of office space coming online thus far in 2011.