Indianapolis developer Keystone Group could spend more than $100 million to revamp the former Anthem headquarters on Monument Circle.
The company told IBJ late Monday that it expects the property to require extensive investment, both in the near term and as part of a longer-term redevelopment plan that is still coming together.
In a statement through a spokesperson, Keystone founder and CEO Ersal Ozdemir said plans for the 213,400-square-foot building that dominates the northwest quadrant of the Circle haven’t been finalized. But the company intends to collaborate with local and state officials and downtown decision-makers to determine a long-term strategy for the site.
“The building will require significant short- and long-term investment that could reach into the hundreds of millions of dollars, as well as a thoughtful, long-term approach to revitalization with input from local and state leadership, key stakeholders and the broader community,” Ozdemir said.
Keystone spent just $6 million to acquire the property in a deal that closed last week. The purchase price is a fraction of the $42 million that seller Franklin Street Partners spent to buy the building in 2010, according to county property records.
Indianapolis commercial real estate industry experts told IBJ that the sale price isn’t a surprise, given the challenges posed by the cool downtown office market and the cost to redevelop the four-story structure into non-office uses.
“Beating out several other competitive bids, we are told that the seller chose Keystone’s bid not just for purchase price but for our sterling reputation, deep resources, ability to close deals quickly with no contingencies and execute on complex transformational projects,” Ozdemir’s statement said. “With a track record of delivering on ambitious plans, Keystone is uniquely positioned to bring this most expansive section of the Circle back to life and help activate the center of our city.”
Earlier this year, Keystone completed a $120 million overhaul of the Illinois Building just a block away at 17 W. Market St. That conversion to the InterContinental Hotel was completed in tandem with the first phase of the company’s rehab work at 220 N. Meridian St., converting a 20-story office tower formerly occupied by AT&T to more than 200 luxury apartments. A second phase of that $124 million project is now underway to add another 57 units.
Commercial broker Andrew Urban said he’s not surprised by the sale price for the building. While he didn’t work with Keystone on the deal, he said he worked with some entities that had interest in the property, all of whom sought similar—or even lower—asking prices.
“A good majority of the bidders that looked at that asset viewed it as essentially a complete redevelopment of the site,” said Urban, senior vice president of occupier services for the Indianapolis office of Toronto-based firm Colliers International. “It’s not too crazy when you think about it as the value of a dirt site, where someone’s going to likely need to do substantial demolition or redevelopment.”
While specifics of the Keystone plans aren’t entirely clear—including whether the existing structure will remain partially or fully intact—Ozdemir said last week the company expects that any redevelopment would convert the property into a “hub of activity” featuring a mix of various features including “sweeping rooftop views, high-end outdoor amenities, parking and maximized retail and restaurant space for locals and visitors to enjoy.”
The plans to redevelop the building come as Downtown Indy Inc., the city and other partners continue to evaluate the potential for recasting Monument Circle.
Keystone’s purchase of the property comes after it sat mostly empty for seven years—except for a few retail spaces—after Anthem, now known as Elevance Health Inc., vacated the building to move to its current Virginia Avenue headquarters in late 2018.
Multiple scenarios have been examined for the property over the years, including the possibility of converting a portion of the four-story building’s basement level into parking.
The possibility of adding more retail tenants has also been floated in recent years, as has splitting up the building to accommodate multiple office users. Current storefront tenants include FedEx Office, H&R Block and Forum Credit Union, which collectively occupy a total of about 11,000 square feet.
The building first hit the market in October with an undisclosed asking price, through the Indianapolis office of Dallas-based brokerage CBRE. The shift to a sell-first strategy came after years of then-owner Franklin Street Properties, a Boston-based investment firm, looking to backfill the building with new office users.
Since 2023, a quarter of the Circle has been closed to vehicular traffic from early summer to late autumn to accommodate Spark on the Circle, a pop-up park. The past two years, Spark has been located directly in front of the Anthem building.
While there are no firm plans for continuing the activation after this year, there have been ongoing conversations about whether a portion of the Circle could be closed permanently to vehicles and made into a pedestrian-only space.
Keystone’s acquisition comes just over a week after plans to redevelop Circle Tower at 55 Monument Circle were unveiled.
That $40 million project from an affiliate of Holladay Properties is set to convert the upper floors of the art deco-style building into a 175-room AC Hotel, with the first three floors remaining office and retail space.
Another building on Monument Circle is also being eyed for potential changes. Indianapolis-based Emmis Corp. continues to seek a buyer for its property on the southwestern portion of Monument Circle. The firm listed the seven-story structure for $35 million in September 2023.
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