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City’s first spec office building in 5 years opening doors

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Sourwine Real Estate Services is about to deliver to the Indianapolis market the first speculative office building since 2008.

The $12 million project with 80,700 square feet of Class A space for lease should be finished by mid-June, the Indianapolis-based developer says.

sourwine spec office building 15colSourwine is offering 80,700 square feet of space in 8335 Keystone Crossing. (IBJ Photo/Aaron Bernstein)

Dubbed 8335 Keystone Crossing, the three-story structure is the third building in the company’s Keystone Office Centre southeast of 86th Street and Keystone Avenue. As a so-called "spec" building, it was constructed without a commitment from a major tenant as an anchor.

The building could serve as a barometer for demand within the Indianapolis-area office market as it begins to rebound from the economic downturn.

The area's office vacancy rate for Class A space recently has hovered around 20 percent. But without much office development in the pipeline, office brokers expect the rate to slowly decline.

Last year, the entire metropolitan market logged about 700,000 square feet of positive absorption, mostly in the northern suburbs, said John Robinson, managing director of the Indianapolis office of Jones Lang LaSalle.

“With no new construction, it doesn’t take an economics major to figure out supply and demand,” he said. “The key right now to successful office leasing is having a large tract of space available.”

Just one building in the Keystone at the Crossing submarket, Three Woodfield Crossing, can match Sourwine’s latest entry by offering 80,000 square feet of contiguous office space, Robinson said.

Each of the three stories at Sourwine’s building has 25,000 square feet of leasable space. The first floor also has a fitness center.

Sourwine has yet to sign a tenant for the building. But company leaders are encouraged about prospects, particularly since one of Sourwine’s buildings within Keystone Office Centre is fully leased and the other is 96-percent occupied.

“We have belief not only in our own product but a belief in the Keystone submarket to perform above average,” said Joe Sourwine, the developer’s asset manager and son of company President Jim Sourwine. “We just think it’s an advantageous time to bring this to the market.”

Healthy activity in the Keystone at the Crossing area helped persuade Sourwine to undertake the spec project. Besides the high occupancy rates at its own two existing buildings, Sourwine was encouraged by increasing demand for office space within the nearby Keystone at the Crossing complex.

That complex, owned by Philadelphia-based Equus Capital Partners Ltd., is 93-percent leased, according to Jones Lang LaSalle statistics.

Simon Property Group Inc.’s continued investment in The Fashion Mall also contributed to Sourwine's optimism. In addition, construction of the $30 million mixed-use Ironworks at Keystone development at the southwest corner of 86th Street and Keystone Avenue should help the spec building attract tenants, Joe Sourwine said.

“For us, the signs are very positive, especially in the Keystone submarket,” he said. “Keystone has lots of great amenities.”

The most recent speculative office building to open in central Indiana was Lake Pointe Center 5, completed five years ago by Indianapolis-based Edgeworth Laskey Properties at the southwest corner of Interstate 465 and Allisonville Road.

Sourwine will own and manage its new building. CSO Architects was the designer of the brick-and-glass structure, and Shiel Sexton the construction manager.

The Indianapolis office of the Cassidy Turley brokerage is handling leasing. Sourwine is asking $21.50 per square foot, a “very competitive rate” for Class A office space in the Keystone at the Crossing submarket, Joe Sourwine said. Rents at the Keystone at the Crossing complex range from $19 to $22.50, according to the most recent IBJ statistics.

Sourwine also owns the three-building 9100 Meridian Square office complex at 91st and Meridian streets.

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  1. I think the poster was being sarcastic and only posting or making fun of what is usually posted on here about anything being built in BR or d'town for that matter.

  2. Great news IRL fans: TURBO the IMS sanctioned movie about slugs running the Indy 500 has caught the Securities and Exchange Commission because Dreamworks had to take a $132MILLION write down...because the movie was such a flop. See, the Indy/IMS magic soiled another pair of drawers. Bwahahahahahaha! How's CARTOWN doing? HAHAHAHA...Indy is for losers.

  3. So disappointed in WIBC. This is the last straw to lose a good local morning program. I used to be able to rely on WIBC to give me good local information, news, weather and traffic on my 45 minute commute.Two incidents when I needed local, accurate information regarding severe weather were the first signs I could not now rely on WIBC. I work weekend 12 hour nights for a downtown hospital. This past winter when we had the worst snowfall in my 50 years of life, I came home on a Sunday morning, went to sleep (because I was to go back in Sunday night for another 12 hour shift), and woke up around 1 p.m. to a house with no electricity. I keep an old battery powered radio around and turned on WIBC to see what was going on with the winter storm and the roads and the power outage. Sigh. Only policital stuff. Not even a break in to update on the winter storm warning. The second weather incident occurred when I was driving home during a severe thunderstorm a few months ago. I had already gotten a call from my husband that a tornado warning was just southwest of where I had been. I turned to WIBC to find out what direction the storm was headed so I could figure out a route home, only to find Rush on the air, and again, no breaking away from this stupidity to give me information. Thank God for my phone, which gave me the warning that I was driving in an area where a tornado was seen. Thanks for nothing WIBC. Good luck to you, Steve! We need more of you and not the politics of hatred that WIBC wants to shove at us. Good thing I have Satellite radio.

  4. I read the retail roundup article and tried Burritos and Beers tonight. I'm glad I did, for the food was great. Fresh authentic Mexican food. Great seasoning on the carne asada. A must try!!! Thanks for sharing.

  5. John, unfortunately CTRWD wants to put the tank(s) right next to a nature preserve and at the southern entrance to Carmel off of Keystone. Not exactly the kind of message you want to send to residents and visitors (come see our tanks as you enter our city and we build stuff in nature preserves...

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