Insurance and Real Estate & Retail

Sourwine planning to sweeten its local office offerings: Second-generation real estate firm has two new buildings in the works that could nearly double its holdings

August 15, 2005

When Jim Sourwine was 4 years old, he would sit outside the closed door to his father's home office and play with his toy cars.

Barred from entering the adult-only world, sounds of paper shuffling and adding machine clacking piqued his interest in his family's real estate business.

"I wanted in," Sourwine recalls.

By the time he was old enough to file and wash windows for the firm, his father had moved Sourwine Real Estate Services out of his home and into space in its first office building, a 25,000-square-foot building at 50 E. 91st St.

During summers home from college, Sourwine hung out at the latest project construction site, gaining a sense of what his parents' business was like outside the office.

"Their goal was to build a business that would survive them," Sourwine said. "They accomplished that."

About five years ago, after working with his father since graduating from Indiana University in 1981, Sourwine took the reins, allowing his father to retire. He runs a second-generation company that now owns nearly 300,000 square feet of local office and retail space.

The company focuses on smaller tenants who typically need less than 10,000 square feet of space; many lease from 350 square feet to 2,500 square feet.

In addition to still owning and leasing that first building built in 1974, the company owns another office building at 91st and Meridian streets, and two at Keystone Crossing, the 8395 and 8365 buildings.

Sourwine's office space totals 180,000 square feet, but it could get significantly larger next year.

Plans call for two projects, including one that will claim the last coveted Keystone Crossing address. Sourwine plans to build a 60,000-square-foot office building at 8335 Keystone Crossing.

The company also wants to take advantage of growth prospects and infrastructure upgrades on the west side by developing a 100,000-square-foot urban "lifestyle" office and retail project at 71st Street and Interstate 465.

Both buildings will be built on a speculative basis, meaning without tenants lined up before construction begins.

"We've run out of buildings to renovate," Sourwine said. "So it's time to start something new."

Sourwine also owns River's Edge Shopping Plaza at 82nd Street and Dean Road, a 110,000-square-foot regional strip mall.

Sourwine says the fact that he still owns the company's first building shows ownership consistency not often found in today's world of mergers and acquisitions.

"Indy is our home and our community," said Sourwine, whose parents bought their first house to sell in 1957 before they moved on to office and retail properties. "Maintaining consistency shows we care in the investment we've made here."

And that investment includes recent renovation of Sourwine's oldest properties, the ones at 91st and Meridian streets and 8395 Keystone Crossing. "Time isn't that friendly to buildings," he said.

While Sourwine declined to disclose how much the company spent remodeling the buildings, just about everything from brighter outside lighting-to accommodate workers staying later in the telecommuter era-to bathroom fixtures were replaced, he said.

"Our locations justified the investment," Sourwine said of the prime northeast side of the city. "We want our existing buildings to look new. Most renovations are purely cosmetic."

Sourwine also declined to disclose revenue.

Just as Sourwine paid close attention to detail during the renovations, he pays equally close attention to his tenants.

In what he calls a "tenant-centric" approach, Sourwine maintains a visible presence in all his buildings.

"We put a little more effort into our product, our space," he said.

Capital Insurance Center has been a tenant for nearly 20 years, leasing 3,000 square feet at 8395 Keystone Crossing. Its owner, Jim Tice, can vouch for Sourwine's commitment to tenants. His dozen employees experienced the renovations firsthand.

"We've appreciated everything they've done," Tice said. "There have been a couple times we've needed to make changes and they were very accommodating. We've expanded and still they met our needs."

In another change since taking over from his father, Sourwine three years ago hired Colliers Turley Martin Tucker, the city's largest commercial real estate brokerage, to market space in the company's buildings.

"We're small biz vs. big biz," Sourwine said. "We needed to understand how to compete; we didn't have the market knowledge CTMT has."

While CTMT provides Sourwine with more time for strategic planning, the relationship doesn't detract from his hands-on approach.

"He is very conscious of how he relates to and treats his tenants," said CTMT's Jeff Henry, who with Andrew Martin, represent Sourwine's office properties.

"With smaller tenants, he can build a different relationship, more one-on-one," Henry said. "He's the only person he has to answer to-there aren't layers or people in other cities making decisions."

Also, a building with many smaller tenants can hedge against the risk of losing a majority of square footage to one lease, Henry said.

Still, Sourwine isn't afraid to compete with what he calls institutional firms-large, publicly owned companies that lease to larger tenants.

"Our goal is to look our best but be competitive," Sourwine said. "No, I don't have more properties than you can list on one piece of paper, but there is a local alternative to the institution."
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