California firm snaps up downtown office towers

Hertz Investment Group said Wednesday that it has completed its purchase of the nearly 650,000-square-foot Capital Center in downtown Indianapolis.

Hertz, based in Santa Monica, Calif., bought the two-tower complex and the 525-space underground parking garage from an Invesco-managed German fund that had owned the property for about 12 years. Terms of the purchase were not disclosed.

The towers at 201 and 205 N. Illinois St. are the 12th-largest office complex in the city, according to IBJ statistics, and the fifth-largest downtown. They’re 78 percent leased with net operating income of $4.5 million.

Invesco was represented in the sale by the local office of CBRE. IBJ reported in May that the property was under contract.

Tenants include Fifth Third Bank, the BKD LLP accounting firm, and the Frost Brown Todd LLC law firm.

In Indianapolis, Hertz also owns Market Square Center, known as the “Gold Building,” and an 11-story building at 251 E. Ohio St.

Class A office properties such as Capital Center have found their way back to market recently as the financing environment for real estate transactions has improved.

Massachusetts-based CommonWealth REIT in 2012 agreed to pay $201 million—about $190 per square foot—for the 48-story Chase Tower and an adjacent building on Monument Circle. And in 2010, another Massachusetts company paid $196 per square foot for the Monument Circle headquarters of WellPoint Inc.

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