Local accounting firm London Witte Group LLC’s decision last June to take a chance on an empty midtown office building is suddenly looking like a winner.
The former Grain Dealers Mutual Insurance building at 18th and Meridian streets is now essentially fully leased thanks to an agreement by Clarian Health Partners to occupy the bulk of the building.
Clarian in recent weeks agreed to lease 32,000 square feet for its ambulatory care offices. The hospital system previously had leased 23,000 for Clarian Health Plans, which moved to the building in February.
Clarian becomes the largest tenant in what is now known as One Independence Center. London Witte renamed the building and changed its address to 1776 N. Meridian St. after an extensive renovation.
“It was a good decision, and it looks like it will be profitable for us,” said Duane Mercer, a partner in the firm. Mercer wouldn’t disclose what the firm paid for the property.
London Witte occupies 20,000 square feet of the 86,000-square-foot building. The firm moved its 26 employees from 12,000 square feet in the OneAmerica Tower in January and now has room to grow, Mercer said.
He said free, on-site parking was an enticement as the firm tried to decide whether to buy or to sign another lease in the heart of downtown.
Free parking and rent that’s inexpensive relative to the city’s other concentrations of office space are likely to drive other tenants to the midtown area, said Matt Moore, an associate at Resource Commercial Real Estate LLC. Moore and Resource principal Tom Osborne worked with London Witte on the purchase of the building and were retained to lease the space.
“I think we’ll see other tenants trying to pop out of downtown” to save money on parking, which can run about $150 per employee per month, Moore said. And rents in midtown are generally less than the going rate in suburban areas where parking is plentiful. Moore said the advertised rent in One Independence Center was $16.95 a square foot, compared with rents topping $21 for some north-side suburban buildings.
The only thing holding the area back at this point is lack of product, Moore said. “There is certainly demand, but there needs to be more developers willing to come in and bring buildings up to modern standards.”
London Witte’s investment is a perfect example of what the neighborhood needs, said Chris Barnett, economic development coordinator for Near North Development Corp. Near North is a not-for-profit that works for improvements in a broad area north of downtown that includes the Meridian Street corridor up to 40th Street.
The other notable example, Barnett said, is the headquarters for local public broadcaster WFYI, which renovated and now occupies the former Indiana Gas Co. headquarters at 1630 N. Meridian St.
The presence of hundreds of employees in buildings that were all but empty a few years ago should help drive demand for more restaurants and convenience-type retail in the area, Barnett said.