CHICAGO, INDIANAPOLIS—Cap rates are on the rise in many US core markets, and both institutional investors and private buyers are paying more attention to smaller metro areas. As a result, some firms have decided to expand the services provided to clients across the Midwest.

Lee & Associates, the largest broker-owned commercial real estate firm in North America, recently brought on industry veteran Rebecca Wells as a senior vice president in the Indianapolis office, a move that will strategically grow its capital markets business in secondary metros around the Midwest. During her more than 23-year career, Wells has successfully executed over $1 billion of investment sale transactions on behalf of institutions, REITS, developers and private clients.

“It was a missing component for us,” Scot Courtney, president of Lee & Associates Indianapolis, tells GlobeSt.com.

“Having me on the team adds to the services available to our existing client base, and can also attract additional clients,” adds Wells. The firm has a great deal of leasing and management expertise, for example, which it can tap into when advising potential sellers on positioning properties for sale.

And Indianapolis is a great place for a capital markets group.

“It's been a very strong market, especially in office,” she says. It has also been strong in retail, at least for smaller deals, especially if it involves a grocery store, and industrial properties.

Lee & Associates specializes in middle-market properties worth between $5 million and $20 million, and Wells believes investors' interest in Indianapolis deals of this size will continue. “We're not overpriced,” she points out, “but we're big enough that it's a safe investment.” In fact, buyers here can expect gain an advantage of up to 200 bps over similar properties in top core cities.

“We've recovered exceedingly well from the recession,” says Courtney, a recovery that was greatly helped by the metro area's economic diversity. It has very strong finance and real estate sectors, both hard hit during the downturn, but also more resilient businesses in healthcare, bioscience and high-tech. The energy from these latter groups have combined to create, in a good way, “a perfect storm for our economy.”

The expansion into Indianapolis of Salesforce.com, a San Francisco-based cloud computing giant, best illustrates the city's robust tech scene. The company anchors an eight-floor, historic building in the downtown, but recently decided to take on an additional 227,781 square feet in Chase Tower, a traditional, modern office building, the state's tallest, that was recently renamed Salesforce Tower.

“That was a major event,” says Courtney. The downtown has even started to see some new ground up construction, and “the population growth has been off the charts.”

“It was a missing component for us,” Scot Courtney, president of Lee & Associates Indianapolis, tells GlobeSt.com.

And Indianapolis is a great place for a capital markets group.

“That was a major event,” says Courtney. The downtown has even started to see some new ground up construction, and “the population growth has been off the charts.”

Instant Insights /

Indy, Midwest Get Stronger as Markets for Investment

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