LaSalle Buys 1.2 MSF Office Park in Indianapolis
- Jul 16, 2014
A LaSalle Investment Management fund has made its first acquisition in Indianapolis, purchasing the 21-building, 1.2 million-square-foot Precedent Office Park in the Keystone Crossing submarket. It was the largest office park transaction in Indianapolis since Precedent was sold in 2005.
The seller and the price paid by the LaSalle Income & Growth Fund VI were not disclosed by the Chicago-based investment manager. However, the Indianapolis Business Journal reported the LaSalle fund paid about $120 million – $100 million for the majority of the property owned by Cayman Islands-based Global Property Investment Fund and $20 million for two buildings owned by Pace Properties of St. Louis. The IBJ.com website noted that Global Property had paid $143 million for the office park in 2005.
Precedent Office Park is comprised of mid-rise, two-story and single-story office properties in a park-like campus. Amenities include a 6,000 square-foot fitness facility, a mile-long walking trail around a lake, a daycare center, conference center, and numerous restaurants and banks. The office park is 94 percent leased by tenants including Zurich Insurance, Rockwell Automation, Honeywell, M&J Insurance, WebMD, Defender Security and Stonegate Mortgage.
“Indianapolis has a stable, diversified and rapidly growing economy with strong population and job growth,” Jim Hutchinson, president of LaSalle Income & Growth Funds, said in a news release. “Tenants are attracted to the location and amenities of the Keystone submarket. We believe that our ability to offer tenants diverse and flexible space options within the park will aid us in our leasing efforts. The property will generate a strong income return for our investors.”
The LaSalle Income & Growth series is the firm’s flagship value-added fund series in the United States. It launched in 1996 and invests in value-add real estate opportunities across the office, retail, industrial and multi-family sectors.
LaSalle Investment Management is a member of the Jones Lang LaSalle group. The Indianapolis office of JLL has been named leasing agent and property manager for Precedent. JLL Managing Director John Robinson and Associate Tammy Recker have been appointed the office park’s exclusive leasing agents. Ryan Room, who recently joined JLL, was named as the complex’s General Manager and leader of JLL’s Property Management division in Central Indiana.
“For a major, international investment management firm like LaSalle to invest in Indianapolis is a huge vote of confidence on the great momentum we’ve seen in the local economy,” Robinson said in a separate news release. “Precedent Office Park is truly a Class A asset in every sense of the word and we are excited to work with ownership to drive additional value.”
With the new assignment, JLL now leases a portfolio of 38 office properties totaling nearly 6.5 million square feet in Indianapolis.
LaSalle Investment Management has approximately $50 billion of assets under management of private and public property equity investments across the globe for clients that include public and private pension funds, insurance companies, governments, endowments and private individuals.
While this is LaSalle’s first investment in Indianapolis, activity in the office market – both sales and leasing – has been robust in the second quarter, according to JLL’s Office Highlights report for Indianapolis Q2 2014. The report noted that Precedent was largest office park transaction but also said there was “an uptick in the sale of medical office property as more than 27,000 square feet of product was traded.” JLL also said Regions Tower, one of the city’s tallest buildings at 662,000 square feet, was under contract to an undisclosed buyer.
In leasing activity, more than 800,000 square feet was signed during the second quarter. The report also noted that there were 18 leases of more than 10,000 square feet signed in the second quarter of 2014 compared to three leases of more than 10,000 square feet in the first quarter.