INDIANAPOLIS—This metro area is perhaps best known in the world of commercial real estate as the home of a vast array of big box distribution facilities. But the region also has a plethora of smaller buildings appropriate for small- and mid-sized users. And investors are finding a lot of opportunities within that latter group.

Brennan Investment Group, LLC, a private real estate investment firm that acquires, develops and operates industrial properties on a national basis, has just acquired an industrial portfolio from Iron Point Partners LLC consisting of four multi-tenant, light-industrial properties with a total of ten buildings and about 544,810 square feet. The properties are located in three Indianapolis submarkets and within close proximity to I-465, the 53-mile beltway surrounding the city. HFF managing partner Pat Sullivan represented the seller in this transaction. The price was not disclosed.

"We like Indianapolis because its a great market with very strong fundamentals," Scott McKibben, co-founder and chief investment officer for Brennan, tells GlobeSt.com. It "has demonstrated exceptional fundamentals, as evidenced by 19 consecutive quarters of positive net absorption." And the Rosemont, IL-based firm has first-hand experience with buying and managing industrial property here. 

As reported in GlobeSt.com, last year the company bought Jackson Industrial Park, a portfolio in Indianapolis that consists of four multi-tenant, light-industrial facilities totaling about 260,400 square feet. At the time, tenants occupied slightly more than 70% of these facilities, but Brennan got that number into the upper 90s in just eight months, McKibben says. That success, and the firm's proven ability to run these types of multi-tenant properties, has made it willing to buy up similar product.

"Small- and mid-sized companies located here have been experiencing a lot of growth," he adds, leading Brennan officials to believe that properties serving this group will continue fill up spaces currently vacant. Developers have mostly concentrated on building vast distribution buildings that serve customers across much of the US, but few have launched the construction of structures with less than 100,000 square feet. "There is no new stock coming on, but there is still a lot of positive absorption."  

"We have bought some big box facilities," he adds, "but the cap rates are quite a bit lower since there is significantly more competition." But in a market as vibrant as Indianapolis, buying B product also makes a lot of sense. "We go where the opportunities are and where we think we can make money."