Zender nears deal for 16-building apartment portfolio

Scott Olson
November 26, 2013
Back to TopCommentsE-mailPrintBookmark and Share

Zender Realty could be close to unloading a portfolio of 16 downtown apartment buildings on the market for more than a year after a previous deal fell through.

The privately owned Zender Family Limited Partnership, an Indianapolis-based property management firm, first listed the buildings—many of them historic—without an asking price in August 2012.

Zender Realty thought it had a buyer and expected to close on the deal earlier this month. But the transaction ultimately fell apart when the potential suitor couldn’t raise the funds, said Tim Zender, who runs the business with his four brothers and sisters.

“It was a little disappointing because of the time we spent [eight or nine months] with the interested buyer,” he said. “It all came down to capital.”

REW Spink building 15colThe Spink Apartments at 1433 N. Pennsylvania St. is among the 16 downtown properties for sale in Zender's portfolio. (IBJ Photo/Scott Olson)

All is not lost, though. Another interested buyer has stepped forward and is under contract to purchase the portfolio. Zender Realty could close on the deal within the next six months, Zender said.

George Tikijian of apartment brokerage Tikijian Associates is listing the portfolio. He said it has attracted some national interest, but the two serious offers have come from local firms.

“It’s a group of properties that are highly desirable because they’re downtown and they’re cool buildings,” he said. “But it’s a tough deal to do. It’s going to require a buyer that has the capital resources to get it done.”

Zender Realty originally listed a portfolio of 18 complexes in 2008 for an estimated $40 million. The Drake at 3060 N. Meridian St. and the Whitestone a block north since have been sold.

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.

Downtown apartment occupancy has fallen slightly this year due to the number of new units hitting the market but still is a very healthy 95.4 percent, according to Tikijian’s 2013 Indiana Apartment Market Overview. Overall, the city’s occupancy rate is 92.1 percent, the report said.

Average rent for the metropolitan area grew 2 percent year-over-year, to $718 per month, with downtown rent increasing even more, by 2.3 percent, to $916, according to the report.

At the 48-unit Admiral, built in 1929 at 3025 N. Meridian St., rents range from $615 a month for a one-bedroom unit to $970 a month for a two-bedroom, for instance. Studio or one-bedroom units are only available in many of Zender Realty’s older buildings.
The company is willing to break up the portfolio and sell buildings individually or in groups but prefers to sell the entire lot all at once, if possible.

“It does kind of limit your market,” Zender acknowledged. “It’s a big challenge for anyone coming in and trying to take that over.”

Michael Wernke, who leads the multi-family group at Colliers’ Indiana region, said the locations of the buildings make them attractive. But the large amount of new units opening in the downtown market could threaten their occupancy, he added.

“It will be interesting to see, with all the new construction downtown, whether tenants in the Zender portfolio might be inclined to move to newer units under construction,” Wernke said.

Earlier this month, a study from Indianapolis Downtown Inc. downplayed concerns the downtown housing market might become overly saturated with apartment units.

IDI commissioned the survey by the Indiana University Public Policy Institute to track the future of downtown living. The urban core has seen a huge boom in multi-family development as market dynamics have shifted in recent years to support renting instead of buying.

Between 2000 and 2012, nearly 2,000 new rental units were built, according to Tikijian, bringing the total number downtown to about 4,700. But within the next three years, 3,500 additional units are expected to become available.

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.

The Zenders’ parents, Jim and Grace, are no longer involved in daily operations but have an interest in the portfolio. Jim bought his first apartment building in 1970 and handed the reins to his children about 20 years ago. He remains active in the general partnership.


  • Zender
    As a resident of the Old Northside Historic Distric, where many of Zenders Apartments are, we will miss them as owners. They have managed their building well over the years and we hope the new owners do the same.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).