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.