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Duke Realty sells six-building local office complex

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Two Illinois companies have acquired a six-building, 446,000-square-foot Indianapolis flex office complex from locally based Duke Realty Corp.

Duke sold the Hillsdale Technecenter, situated east of Interstate 465 and Interstate 69 on the northeast side, as part of an ongoing plan to reduce its ownership of suburban office buildings.

Financial terms of the deal, which closed in December, were not disclosed, but industry sources said the buildings sold for more than $20 million, or $45 per square foot.

The buyers, Middleton Partners and Romanek Properties, hope to build on an 88-percent occupancy rate for the buildings and potentially expand the complex. Key tenants include Verizon Wireless, with about 38,400 square feet; Community Health, with 34,300 square feet; and Ingersoll-Rand, with 29,300 square feet.

The six single-story buildings in the campus were developed in 1986 and 1987 and range in size from 64,000 square feet to 84,050 square feet each.

The purchase marks a return to the market for Romanek, which in late 2011 sold the three main office buildings at Intech Park on the west side of Indianapolis to Boston-based REIT Management & Research. Those buildings have a total of about 430,000 square feet.

"The Hillsdale complex is highly regarded in the marketplace and considered an excellent in-fill location close to major highways and local demand drivers," Romanek principal Peter Holstein said in a prepared statement. He noted the potential for expansion for medical-related tenants.

Duke Realty, meantime, continues to divest suburban office properties as it evolves from an office powerhouse to a more diversified player with heavier focus on industrial and medical office space.

The publicly traded company's biggest such deal has been its $1.08 billion sale of 82 suburban office buildings in Atlanta, Chicago, Columbus, Dallas, Minneapolis, Orlando and Tampa to the private equity giant Blackstone Group LP in late 2011.

Duke has said its long-term goal is have 60 percent of its holdings in industrial, 25 percent in office and 15 percent in medical office.

John Huguenard and Peter Harwood of Jones Lang LaSalle represented Duke Realty in the transaction. Middleton and Romanek did not have a broker.

Duke shares were up 7 cents Wednesday morning, to $14.48 each.

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  1. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

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