The North by Northwest Business Park near 86th Street and Georgetown Road has been sold to firms in Minneapolis
and Baltimore for $29.6 million. The sale of the seven-building, 1.1-million-square-foot industrial complex closed Dec. 30.
The park was sold by an affiliate of Multi-Employer Property Trust to a joint venture of Minneapolis-based Biynah Industrial Partners and Baltimore-based Alex. Brown Realty. The property is a mix of mid-sized flex industrial and modern bulk warehouse space. MEPT retained an unspecified amount of land in the park.
Life & Annuity in Des Moines, Iowa, provided financing, and Alex.Brown's ABR Chesapeake Fund
III committed $6.9 million in equity to the joint venture.
The amount paid for the industrial portfolio makes it one of the largest local deals in 2009, according to John Merrill, an investment broker for the local office of CB Richard Ellis. But last year was a down year for sales because of the recession, and the price—about $27 a square foot—is lower than it would have been four or five years ago. The same property might have sold for $40 a square foot before the economy turned, Merrill said.
Jeff Josephs, Biynah’s managing director, said his firm’s experience with another Indianapolis industrial property sealed the deal.
“This is one of the few markets in the Midwest where we have seen positive absorption and a strong velocity of deal flow,” Josephs said. Biynah, in partnership with Alex Brown Realty, also owns a three-building, 360,000-square-foot industrial complex on the east side, at 250-258 Kitley Ave. That property is 90 percent leased.
Dallas-based Trammell Crow Co. launched development of North by Northwest in the 1990. The complex of industrial buildings is 84 percent occupied. The newest property in the park, built in 2008, is a 100,000-square-foot structure that houses a warehouse and transportation center and a small retail outlet for Goodwill Industries.
Josephs said the complex was attractive because of its variety of tenants, none of which occupies more than 11 percent of the total square footage. The tenant mix and absence of any major leases that are about to expire makes North by Northwest attractive from an income standpoint, he said.
The purchase was contingent on the seller completing lease renewals with four tenants representing 22 percent of the park’s space. Leases that account for another 25 percent of the space have at least seven years remaining.
Among the tenants renewed as part of the transaction is Kent H. Landsberg Co., a packaging operation that occupies 73,000 square feet. Sales contingent on lease renewals are a growing trend, said Merrill of CBRE.
Colliers Turley Martin Tucker has been responsible for leasing at North by Northwest and is being retained. CTMT’s Michael Weishaar, who handles leasing at the Kitley Avenue property on the east side, is now the lead broker at North by Northwest.
Former CTMT industrial broker John Huguenard was the seller’s broker. Huguenard has since left CTMT for Jones Lang LaSalle.