Stos, Cardinal, Long Wharf Sell 1.3 MSF Indianapolis Portfolio
The portfolio's occupancy was 97 percent at the time of the sale.
A joint venture of Stos Partners, Cardinal Industrial and Long Wharf Capital has sold the Hoosier Infill Industrial Portfolio, a collection of 13 parks that total 1.3 million square feet across 38 buildings in metro Indianapolis. Colliers represented the sellers.
Berkeley Partners acquired the collection, a Colliers spokesperson told Commercial Property Executive.
The trio had purchased 34 of the buildings in 2021 for $98 million. The deal was Central Indiana’s biggest single transaction of that year. Colliers brokered that sale and had also arranged a $67.5 million loan issued by Wells Fargo.
Since that purchase, Stos, Cardinal and Long Wharf invested approximately $6 million in capital expenditure, modernizing operations and replacing the roofs on roughly 30 percent of the buildings.
All renewed or originated leases during the venture’s hold period were triple-net, Jason Richards, partner at Stos Partners, told CPE. At closing, 227 tenants had been converted to NNN leases, according to Colliers.
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The owners closed about 325 new and renewed leases during the hold period. At the time of this sale, the collection was nearly 97.5 percent leased to 251 tenants. The weighted average lease term clocked in at almost 2.3 years, while rents were on average 6.1 percent below market, with 11 percent of the leased space renting 28 percent under the market.
Most of the warehouses are near the interchange of interstates 465 and 69, about 15 miles northeast of downtown Indianapolis.
Colliers Vice Chair Alex Cantu, together with Executive Vice President Alex Davenport, brokered the deal on behalf of the sellers. Notably, Cantu arranged another transaction earlier this year, a 182,000-square-foot transaction in Westfield, Ind.
Small-bay Indianapolis warehouses in short supply as rents surge
Across metro Indianapolis, just 2.2 percent of the total industrial supply can accommodate tenants requiring up to 2,000 square feet of space, according to Colliers data.
As a result, multi-tenant, light industrial assets and shallow-bay warehouses have experienced a rent increase of more than 50 percent over the past five years, while their vacancy rate has averaged below the 4 percent mark. Meanwhile, Indianapolis’ entire industrial market had a 9.3 percent vacancy in September, down 171 basis points year-over-year, according to a Colliers report.
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