The owner of 16 downtown apartment complexes again is attempting to sell the properties after failing to attract a suitable buyer during a previous attempt four years ago.
The privately owned Zender Family Limited Partnership, an Indianapolis-based property management firm, is listing the buildings—many of them historic—without asking prices, said Tim Zender, who runs the business with his four brothers and sisters.
Zender, who declined to estimate an overall value for the 16 properties, said the family is expecting better results this time because it's willing to break up the portfolio and sell the buildings individually. In addition, the multifamily housing market has improved since 2008.
“I think we just missed the window last time,” Zender said. “I don’t think we’re going to miss it this time.”
Zender said the family previously fielded several offers that “weren’t what we expected.”
The original portfolio included 18 complexes listed for an estimated $40 million. Absent from the listing now is the Drake at 3060 N. Meridian St. and the Whitestone a block north. A sale is pending on those properties with a single buyer, Zender said.
The 16 available properties consist of a total of 873 units and are mostly located on North Delaware, North Meridian and North Pennsylvania streets. Some were built in the 1920s—or earlier—and have never been renovated, while others were constructed in the 1950s and rehabbed in the late 1980s. They are clustered downtown and just north of the city center, in areas that continue to experience improving occupancy rates and rising rents.
For example, rents range from $400 a month for a studio apartment to $2,000 a month for a penthouse at the 48-unit Admiral, built in 1929, at 3025 N. Meridian St.
“The portfolio is doing very well now and the downtown is as strong as it’s ever been,” said the family’s broker, George Tikijian of Indianapolis-based Tikijian Associates. “The ability to buy 873 units downtown all at once is unprecedented.”
The downtown apartment occupancy rate is nearly 96 percent and average rent is $1.18 per square foot, which is “dramatically” higher than any submarket in the city, said Steve LaMotte, a senior vice president at the Indianapolis office of CBRE.
An abundance of cheap cash available at very affordable rates also should make the properties attractive, LaMotte said.
“There is far more capital than available product to invest in,” he said. “And that’s particularly true here locally, where we see very little quality product on the market today.”
Zender said the decision to sell is motivated more by personal reasons than by any rush to cash in on the current market. The five partners all want to explore different interests.
“We’ve been doing this since my father started it in 1970,” Zender said. “In some form or fashion, we’ve been involved in this business for 42 years.”
Zender and his siblings all are involved in day-to-day management.
The Zenders’ parents, Jim and Grace, are no longer involved in daily operations but have an interest in the portfolio. Jim handed the reins to his children about 20 years ago, but he remains active in the general partnership.
“The Zender family is a longtime fixture in the apartment market,” LaMotte said. “They do a nice job.”