Subscriber Benefit
As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe Now
Indianapolis developer Keystone Group could spend more than $100 million to revamp the former Anthem headquarters on Monument Circle.
The company told IBJ late Monday that it expects the property to require extensive investment, both in the near term and as part of a longer-term redevelopment plan that is still coming together.
In a statement through a spokesperson, Keystone founder and CEO Ersal Ozdemir said plans for the 213,400-square-foot building that dominates the northwest quadrant of the Circle haven’t been finalized. But the company intends to collaborate with local and state officials and downtown decision-makers to determine a long-term strategy for the site.
“The building will require significant short- and long-term investment that could reach into the hundreds of millions of dollars, as well as a thoughtful, long-term approach to revitalization with input from local and state leadership, key stakeholders and the broader community,” Ozdemir said.
Keystone spent just $6 million to acquire the property in a deal that closed last week. The purchase price is a fraction of the $42 million that seller Franklin Street Partners spent to buy the building in 2010, according to county property records.
Indianapolis commercial real estate industry experts told IBJ that the sale price isn’t a surprise, given the challenges posed by the cool downtown office market and the cost to redevelop the four-story structure into non-office uses.
“Beating out several other competitive bids, we are told that the seller chose Keystone’s bid not just for purchase price but for our sterling reputation, deep resources, ability to close deals quickly with no contingencies and execute on complex transformational projects,” Ozdemir’s statement said. “With a track record of delivering on ambitious plans, Keystone is uniquely positioned to bring this most expansive section of the Circle back to life and help activate the center of our city.”
Earlier this year, Keystone completed a $120 million overhaul of the Illinois Building just a block away at 17 W. Market St. That conversion to the InterContinental Hotel was completed in tandem with the first phase of the company’s rehab work at 220 N. Meridian St., converting a 20-story office tower formerly occupied by AT&T to more than 200 luxury apartments. A second phase of that $124 million project is now underway to add another 57 units.
Commercial broker Andrew Urban said he’s not surprised by the sale price for the building. While he didn’t work with Keystone on the deal, he said he worked with some entities that had interest in the property, all of whom sought similar—or even lower—asking prices.
“A good majority of the bidders that looked at that asset viewed it as essentially a complete redevelopment of the site,” said Urban, senior vice president of occupier services for the Indianapolis office of Toronto-based firm Colliers International. “It’s not too crazy when you think about it as the value of a dirt site, where someone’s going to likely need to do substantial demolition or redevelopment.”
While specifics of the Keystone plans aren’t entirely clear—including whether the existing structure will remain partially or fully intact—Ozdemir said last week the company expects that any redevelopment would convert the property into a “hub of activity” featuring a mix of various features including “sweeping rooftop views, high-end outdoor amenities, parking and maximized retail and restaurant space for locals and visitors to enjoy.”
The plans to redevelop the building come as Downtown Indy Inc., the city and other partners continue to evaluate the potential for recasting Monument Circle.
Keystone’s purchase of the property comes after it sat mostly empty for seven years—except for a few retail spaces—after Anthem, now known as Elevance Health Inc., vacated the building to move to its current Virginia Avenue headquarters in late 2018.
Multiple scenarios have been examined for the property over the years, including the possibility of converting a portion of the four-story building’s basement level into parking.
The possibility of adding more retail tenants has also been floated in recent years, as has splitting up the building to accommodate multiple office users. Current storefront tenants include FedEx Office, H&R Block and Forum Credit Union, which collectively occupy a total of about 11,000 square feet.
The building first hit the market in October with an undisclosed asking price, through the Indianapolis office of Dallas-based brokerage CBRE. The shift to a sell-first strategy came after years of then-owner Franklin Street Properties, a Boston-based investment firm, looking to backfill the building with new office users.
Since 2023, a quarter of the Circle has been closed to vehicular traffic from early summer to late autumn to accommodate Spark on the Circle, a pop-up park. The past two years, Spark has been located directly in front of the Anthem building.
While there are no firm plans for continuing the activation after this year, there have been ongoing conversations about whether a portion of the Circle could be closed permanently to vehicles and made into a pedestrian-only space.
Keystone’s acquisition comes just over a week after plans to redevelop Circle Tower at 55 Monument Circle were unveiled.
That $40 million project from an affiliate of Holladay Properties is set to convert the upper floors of the art deco-style building into a 175-room AC Hotel, with the first three floors remaining office and retail space.
Another building on Monument Circle is also being eyed for potential changes. Indianapolis-based Emmis Corp. continues to seek a buyer for its property on the southwestern portion of Monument Circle. The firm listed the seven-story structure for $35 million in September 2023.
Please enable JavaScript to view this content.
Rebuild the English Hotel https://historicindianapolis.com/then-and-now-english-hotel-and-opera-house-120-monument-circle/
YES
Why involve the state? If the state has any in this it’s bound to be awful.
*say
To get state/local money, in the form of either grants or tax credits/deferments.
Key quote: ““The building will require significant short- and long-term investment that could reach into the hundreds of millions of dollars, as well as a thoughtful, long-term approach to revitalization with input from local and state leadership, key stakeholders and the broader community,” Ozdemir said.”
To your point Pat, why involve the state? To get state money, the quote is developer speak for we will be asking for money if you want to provide input.
Because Keystone and the city just had a falling out over Eleven Park when they asked for even more money and the state might be needed to either step in with money or force the city to give them money.
How that isn’t mentioned in this article, I find interesting.
The old English cannot be rebuilt, but the design concept and spacial fenestration of the facade can sure be emulated, and should be! Please don’t try and imitate the 19th and 20th century architecture of the past.
I’ll repeat it for the umpteenth time, never ever close a portion of the circle space to traffic! Temporary events are excepted. This is the most iconic space in the entire city and state!!
The Circle is infinitely better being pedestrianized. Foot traffic is up, safety has been improved, and it has generally become a space people enjoy. You’re right in that it’s the most iconic space in Indy, but not because you can drive your car in a circle around it.
Legally, the Circle is not a thoroughfare. It doesn’t serve high traffic volumes and doesn’t have any major access points. The only argument to open it back up to cars at this point is just, “I’ve been mildly inconvenienced.”
The world is moving towards pedestrianization of public spaces so people can actually enjoy them, not just drive through them. We should follow suit.
too bad the redevelopment could not include the Sheraton Hotel, such a prominent location architecturally needs facade redesign.
“The purchase price is a fraction of the $42 million that seller Franklin Street Partners spent to buy the building in 2010” – That was near the bottom of the real estate market after the crash. Where did the value go?? Buying this for $6M is unbelievably cheap.
Since covid and the mostly peaceful riots, businesses aren’t exactly rushing to downtown.
Please demolish entirely or build upon it to build at least a mid-rise if not high-rise housing.
Indeed!!
For ~$100M you’re not getting a bigger or better building. Just a redevelopment.
There are (used to be?) stepback and max height requirements to protect the monument from being blocked of sunlight and views from other surrounding buildings.
It is fantastic to see great minds and money focus on making Monument Circle exciting again. I would add that the Indianapolis Symphony Orchestra has gone public with a brilliant plan to reimagine the Hilbert and parts nearby, on the south east side of the Circle.
Let’s work together to accomplish things beyond what any one of us could dream of!
As I recall, there are height restrictions for buildings on the circle.
There were up until 1963, but not anymore.
Well my reading of the article tells me this is part of a much larger future development. I see clues in the article.
“The building will require significant short- and long-term investment that could reach into the hundreds of millions of dollars, as well as a thoughtful, long-term approach to revitalization with input from local and state leadership, key stakeholders and the broader community,” Ozdemir said.”
This tells me he has eyes on the Sheraton and the parking garage next to it, since this property backs up to it and they are long overdue for redevelopment.
Many things could happen, but I see redeveloping the Sheraton into an upscale hotel or multiple flag property, maybe a mix of apartments and hotel. Use the Anthem Building to be a multi story lobby with rooftop dining/bar.
I may not be thinking big enough. Developers are being big and bold in Indy. The Bottleworks, the plan for the Indy 11 Stadium that Hogwarts killed, and Circle Center redevelopment are helping to redefine large swaths of downtown. I don’t see Ozdemir doing anything small here.
When I was much younger, I did soils testing in the elevator shafts when they gutted Penney’s to make Anthem. Found lots of pieces of marble and limestone from the English Hotel. I wish I had picked up a few pieces
Bottleworks was done by the same people who are doing the Circle Center Mall, not Keystone Group.
When I see the Keystone Group, I see a mixed record on “big projects”. Did they finish the InterContinental? Yep. Also took 11 years. Even if you want to blame COVID, that’s a long time for a property purchased in 2013.
Eleven Park died when it became apparent that they needed even more taxpayer money on a project that was never going to be able to deliver an MLS franchise, because MLS doesn’t think Ersal Ozdemir is well capitalized enough to be an owner in their league. Keystone is now trying a very similar “big project” in Westfield, but it’s apparently dependent on the state giving them a special taxing district.
Look, Keystone got a steal on the building and location, likely because it became apparent that whoever bought this building was going to have to demolish it and start over. And I do think Keystone has admirable ambitions and wants to deliver good projects. But the past makes me question if they’re capitalized well enough to pull off what they want to do, and I just don’t have much confidence that this project takes less than 15 years and/or that it won’t be asking for a boatload of government subsidies or handouts.
Really only one developer is doing quality work here, and they aren’t even based in Indiana.
Wow all these comments and no one has said a Target! Shocked. Lol
Maybe they’ve finally realized it isn’t going to happen.
Downtown needs about 10,000 more people living in the Mile Square before a Target can become sustainable.
As long as the ground floor is commercial and has a dollar tree, a dry cleaner, a dentist, and a branch bank then I think all state laws will be covered.