Capital Center at 201 and 251 N. Illinois St. (Image courtesy of Google)
The Chicago-based owner of the Capital Center office towers in downtown Indianapolis has listed the complex for sale.
Zeller Property Group, which purchased the 648,000-square-foot, two-tower property in 2018 for $63 million, has not disclosed its reason for selling the property, nor did it disclose an asking price.
The property consists of a 17-story tower to the north, at 251 N. Illinois St., and a 22-story south tower at 201 N. Illinois St. The buildings, completed in 1986, are connected by a glass atrium. Their tenants include Sponsel CPA Group LLC, Fifth Third Bank and accountants BKD LLP, as well as the Indiana Supreme Court.
According to Chicago-based brokerage JLL, which has been contracted to manage the sale of the buildings, the complex is about 61% occupied, with at least 199,000 square feet available for lease.
Zeller and JLL representatives did not respond to messages requesting comment for this story.
The owner in recent years has spent more than $18 million to revamp the property, with upgrades to conference space, a fully renovated lobby with an expanded bar and coffee area, a new outdoor patio and improvements to the complex’s fitness center. Zeller also modernized the properties’ elevators and built out multiple move-in ready spaces for prospective tenants.
The listing comes as two downtown office towers face foreclosures.
IBJ reported on Feb. 5 that the owners of the 36-story Regions Tower are facing a foreclosure suit after allegedly failing to pay off nearly $75 million of loans last year.
The owners, NG 211 N. Pennsylvania St LLC and Regions Tower MF LLC, missed an Oct. 1 deadline to cover the outstanding balance, according to Cleveland firm KeyBank, which is the debt servicer for the building.
In the foreclosure filing, Delaware-based Wilmington Trust National Association, which represents KeyBank, asked that the full amount of the outstanding debt be repaid immediately—along with accruing interest and legal fees—or the property would be foreclosed upon.
Foreclosure would send the deed to the Marion County Sheriff’s Office, which would put the property up for bid at auction, with Wilmington having an option of bidding to take control of the site.
In August, the owner of Circle Tower on Monument Circle was sued over alleged failure to repay debt. Chicago-based Expansive, through 55 Monument Circle Level Office LLC, has allegedly fallen behind on payments for its $13.5 million loan, also failing to maintain adequate communication with the bank about operations as required in loan documents.
The company owes about $12.94 million on its loan, according to that lawsuit.
Downtown is also continuing to face growing office occupancy problems, with the Indianapolis office of Cushman & Wakefield reporting a vacancy rate of 22.2% at the end of 2023.
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