News

Indianapolis–In a $40 million deal, Chicago-based HEARN and equity partner CrossHarbor Capital Partners have purchased the 28-story BMO Plaza office building in downtown Indianapolis.

Avison Young brokered the transaction on behalf of the seller, an entity managed by White Plains, N.Y.-based True North Management Group.

Located at 135 North Pennsylvania St., BMO Plaza ranks as the sixth-tallest building in Indianapolis. The high-rise was built in 1989 and is home to several prominent tenants, including BMO Harris Bank, the U.S. Department of Defense, General Electric, Quarles & Brady and Rubin & Levin.

According to Blake Hillemeyer, executive vice-president for HEARN, there is significant potential for the company’s latest acquisition.

“Indianapolis has done a tremendous job stewarding development and growth of the downtown area,” Hillemeyer said in prepared remarks. “We anticipate increasing demand for professional office space, and the BMO Plaza building presents a prime location for potential tenants.”

True North took ownership of the property in October 2009 as the lender for New York-based Crown Properties Inc. and Connecticut-based Greenfield Partners, which were in default. Hearn is now planning to increase BMO Plaza’s occupancy rate of 73 percent by upgrading its fitness center, corridors, restrooms, lobby area and restaurant space, the Indianapolis Business Journal reported.

James Hanson and Erik Foster, Avison Young principals based in Chicago, worked on the transaction in conjunction with Bill Ehret, a principal of Avison Young and managing director of the firm’s Indianapolis office, and Nancy Merritt, a senior associate, also based in Indianapolis.

“This has been a great success story for True North Management Group, which first recognized the potential of BMO Plaza and the opportunity to significantly enhance value through an aggressive modernization and leasing effort,” added Hanson. “With the repositioning successfully completed, True North was then able to sell the asset while still providing upside potential for the buyers.”

The Indianapolis central business district office market has grown steadily over the last few years, with vacancy decreasing and employment growing at twice the national average. Millennial workers are returning to the CBD, greatly increasing the number of residential units planned for the CBD and creating demand for jobs and offices downtown.

Image courtesy of Avison Young