INDIANAPOLIS—The massive expansion of distribution and logistics hubs across the US has had a transformational effect on some centrally-located cities such as Memphis and Indianapolis. Confidence in these regions has increased substantially, and some big coastal investors have started to place big bets.
“We have a couple of properties in Indianapolis that we hold in a joint venture with Duke Realty,” Philip L. Kianka, executive vice president and CEO of Chambers Street, a real estate investment trust in Princeton, NJ, tells GlobeSt.com. “That allowed us to get a better handle on the market and understand its dynamics.” But the trust recently decided it felt comfortable enough with the burgeoning Indianapolis industrial market to strike out on its own.
Chambers recently completed the $30.2 million purchase, its first solo buy in the region, of 445 Airtech Parkway, the new 622,440-square-foot warehouse and distribution property finished last year by Prologis/Browning Investments at AirTech Business Park in suburban Plainfield.
“We have properties across the country with a good concentration along the East Coast,” Kianka adds. “But we’ve also been trying to expand our portfolio in the logistics sector and have been looking at Indianapolis for a period of time, but this deal came to us; it was a marketed deal.”
Aside from the intense activity in Indianapolis, Kianka says what drew Chambers to 445 Airtech was “the capacity to expand the building since we now have the necessary vacant land.” The adjoining parcel has enough land for a 227,000-square-foot expansion of the building.
“We pretty much have a wait-and-see attitude when it comes to a possible expansion of the building,” he says, “and for now we just plan to work with the existing tenant.” And that tenant was another of the property’s big selling points. Shortly before the Prologis/Browning partnership finished the building, the first speculative industrial development in Indianapolis since 2008, it signed Hartz Mountain Corp., a pets product supplier, to a triple net lease for the entire space.
“We’re looking across the country for similar opportunities, not solely at Indianapolis, but if a prospect were to come up within the area, we’ll certainly take a look at it.”