BMO Plaza latest downtown office building to hit market

October 6, 2015

One of the city’s biggest downtown office buildings is on the block, as the owner tries to capitalize on the city’s hot office market.

White Plains, New York-based True North Management Group is accepting offers on the 28-story BMO Plaza at 135 N. Pennsylvania St. At 432,300 square feet, it’s the sixth-largest office building downtown.

True North took ownership of the building in October 2009 as the lender for New York-based Crown Properties Inc. and Connecticut-based Greenfield Partners, which were in default.

BMO Plaza, known as M&I Plaza before BMO Harris’ 2011 purchase of M&I Bank, had just lost its largest tenant, the Bose McKinney & Evans LLP law firm, to Chase Tower, and was less than 30 percent occupied.

The local office of Toronto-based Avison Young Inc. is the leasing agent for the building and has helped increase occupancy to 73 percent, said James Hanson, an Avison Young principal based in Chicago.  

“[True North] acquired a distressed asset with a strategy, and they executed on that strategy and generated a return on that investment,” Hanson said. “The next owner can build on that by completing the lease-up of that building.”

True North is shopping the tower without an asking price, Hanson said. Its assessed value, including the nearly one acres of land on which it sits, totaled about $35.2 million last year, according to county records.

BMO Plaza is the latest in a string of downtown office buildings to hit the market in recent years.

CommonWealth REIT paid $201 million, or $190 per square foot, in July 2012 to buy the 46-story Chase Tower, downtown’s largest office building, and an adjacent building on Monument Circle from Boston-based Beacon Capital Partners.

In April 2013, Santa Monica, California-based Hertz Investment Group completed its purchase of the nearly 650,000-square-foot Capital Center on North Illinois Street and the 525-space underground parking garage from an Invesco-managed German fund. The two buildings comprising Capital Center fetched $49 million, or $76 per square foot.

Last year, New York City-based The Nightingale Group LLC paid $65 million, or $98 per square foot, to buy the 36-story Regions Tower from a local group that included Michael S. Maurer, a shareholder in IBJ Media, publisher of IBJ.

And Chicago-based Zeller Realty purchased the 30-story Market Tower out of foreclosure for $52.7 million, or $102 per square foot, after a Marion Superior Court judge ordered the owner, an affiliate of embattled Indianapolis developer HDG Mansur, to sell the building after it defaulted on the loans.

“From a national perspective, downtown Indianapolis is such a great story,” Hanson said. “You have such a diverse economy, and now the population base [is growing], and some major Fortune 500 companies are there. It’s just a great place to invest money.”

Hanson said True North invested about $5 million in BMO Plaza to improve the property in its quest to attract more tenants.

Among the upgrades: updating the fitness center, lobby and exterior plaza, and adding a tenant lounge and business center where companies can conduct large meetings.

New tenants include the Rubin & Levin PC and Hackman Hulett LLP law firms, in addition to CareSource and Strategic Marketing & Research Insights.

BMO Plaza was built in 1989.


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