The state’s sixth tallest building has been sold for $70 million.
BMO Plaza, a 28-story Class A office tower at 135 N. Pennsylvania St. in downtown Indianapolis, was acquired by a group of real estate investment companies from Michigan and Florida. The new owners announced the acquisition this week.
The $70 million price marks a whopping 75 percent increase over the $40 million that Chicago-based Hearn Co. and Boston-based equity partner CrossHarbor Capital Partners paid in early 2016 to buy the building from White Plains, New York-based True North Management Group.
The new ownership group is made up of Miami-based real estate investor Black Salmon, an affiliate of real estate developer TSG Group, and Detroit-based developer and investor Redico LLC.
JLL brokers Adam Broderick, John Robinson, Bruce Miller and Nooshin Felsenthal represented Hearn in the sale.
According to Black Salmon, Hearn spent about $6 million on a redevelopment plan to upgrade the tower’s lobby, common areas and fitness center, and add a tenant lounge and game room. Hearn also relocated its restaurant space, which has been a "revolving door," from the second floor to street level, and filled it with King David Dogs.
The improvements help raise occupancy from about 73 percent to more than 80 percent.
Key tenants in the 444,644-square-foot building include BMO Harris Bank, the U.S. Department of Defense and General Electric Capital Services.
In terms of square footage, the building is the eight largest office complex downtown. The only taller buildings in the state are Salesforce Tower, OneAmerica Tower, Regions Tower, Market Tower and 300 North Meridian.
CoStar Group, a real estate information service, said asking rents in the building range from $22.50 to $24.50 per square foot.
Developed by Phillip R. Duke and Associates, BMO Plaza opened in 1988 and was originally called First Indiana Plaza after anchor tenant First Indiana Federal Saving Bank. It became M&I Plaza in 2008 when Milwaukee-based Marshall & Ilsley Corp. acquired First Indiana and was renamed BMO Plaza in 2011 after Bank of Montreal bought M&I.
Black Salmon said it plans to make further upgrades to BMO Plaza’s common areas.
“We continue to identify key markets throughout the U.S. that are rich in opportunities for value investments,” said Ignacio Murman, head of acquisitions and managing partner for Black Salmon, in a written statement. “Our client base is composed of international participants, whose appetite is strong to streamline the investment process and diversify their portfolios with quality assets.”
True North took ownership of the building in October 2009 after former owners New York-based Crown Properties Inc. and Connecticut-based Greenfield Partners defaulted on their loans.
At the time, the building had just lost its largest tenant, the law firm of Bose McKinney & Evans LLP, and was less than 30 percent occupied.