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|  Tuesday, July 31, 2007 |
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Downtown, suburbs report higher vacancy rates
Vacancy rates downtown and in the overall suburban markets were up in the first half of the year, compared with rates at the end of last year, according to Meridian Real Estate.
The vacancy rate for multi-tenant office buildings downtown increased to 14.6 percent in the first six months of the year, compared with a 12.8 percent vacancy rate at the end of 2006.
The report includes Class A and Class B buildings. Downtown net absorption for the period was 15,354 square feet, Meridian said.
Vacancy in the overall suburban market increased just less than 1 percent, to 18.5 percent.
Among the suburban markets, the west/southwest area had the highest vacancy rate at 30.6 percent, but that was an improvement over a 32.6-percent vacancy rate at the end of 2006.
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|  | The east/southeast suburban market had the lowest vacancy rate in the first six months of the year at 1.2 percent, a significant improvement over an 11-percent vacancy rate at year-end.
Vacancy in the North Meridian/Carmel suburban market increased to 14.8 percent, from 11.1 percent.
Meridian could not immediately be reached to provide additional information.
Sales/acquisitions
A 321,600-square-foot industrial building in Plainfield Business Center at Airwest was the only local property in a portfolio of nine buildings bought by California-based KBS Real Estate Investment Trust. The total portfolio sold for $124.5 million. The seller of Building 8, as the local building is referred to, and the other eight structures was Opus Corp., based in Minneapolis. Building 8 is fully occupied by Brightpoint Inc.
Leases/leasing contracts
- Sagamore Institute for Policy Research has leased 3,717 square feet at 1630 N. Meridian St., the former Indiana Energy headquarters now owned and occupied by Metropolitan Indianapolis Public Broadcasting Inc. Chris Carmen of Carmen Commercial Real Estate Services Inc. represented the tenant. David Buchanan of Mansur Real Estate Services represented the local public broadcasting organization, which recently moved its radio and television stations from the 1400 block of North Meridian Street into about half of the 94,000-square-foot building. Most of the rest is still available for lease. Sagamore Institute is relocating from 340 W. Michigan St.
- Craig Kastle, CEO of Bowl West LLC, will lease a 65,000-square-foot building in Avon being built by Urbahns Cos. Inc., which also will own the building. The building will house Storm Zone Entertainment Complex.
Investments/financings/stock sales
- Simon Property Group Inc. had funds from operations in the second quarter of $373 million, an increase of 4.1 percent over the year-ago period. Occupancy at Simon's regional malls is 92 percent and nearly 93 percent at its lifestyle centers. Among its ongoing projects, Simon is developing Hamilton Town Center, a 950,000 square-foot open-air mall in Noblesville. The first phase of the center is slated to open in about nine months. During the quarter, the local mall developer, along with Farallon Capital Management, closed on its acquisition of The Mills Corp. for $1.6 billion.
- Duke Realty Corp. reported second-quarter funds from operations of $87.3 million, up 11 percent from the year-ago quarter. Duke attributed the increase to gains on sales of properties in the period. At June 30, Duke's 692 properties spanned 108.6 million square feet and were 93.7 percent leased. Its pipeline consisted of $1.6 billion of developments, about half of which it plans to sell within a year of completion.
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| Housing
- U.S. foreclosure filings totaled 573,397 in the first six months of the year, according to RealtyTrac. Foreclosure filings include default notices, auction sale notices and bank repossessions. The number is 30 percent higher than during the prior six months and 55 percent higher than the first half of 2006. It represents one foreclosure filing for every 134 households across the country. Indiana ranked No. 10 nationally in the first half of the year with 24,388 foreclosures, or one in every 112 households. Indiana's January through June numbers are 13 percent higher than in the prior six months.
- The pace of mortgage loan applications was at a five-month low last week, falling 3.6 percent from the week before, according to the Mortgage Bankers Association. Refinancings accounted for 38.5 percent of all applications, up from 37.7 percent in the prior week. Interest rates on 30-year mortgages averaged 6.59 percent, down from 6.61 percent. Rates on 15-year loans fell to 6.24 percent, from 6.29 percent.
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| - Sales of new homes nationwide fell 6.6 percent in June, from the month before, to a lower-than-expected annual rate of 834,000, the Commerce Department said. Economists had expected sales to fall to an 890,000 annualized pace in June. Analysts say an improvement in sales likely won't occur until next year at the earliest. Once built, a home takes six months to sell-the longest since 1993. At the end of last year, it was taking 4.3 months after completion to sell. Sales in June were down 22.3 percent from a year ago. Last week, IBJ Real Estate Weekly reported home sales in central Indiana last month dropped 19.8 percent, to 2,961, from the same month in 2006.
People
 - Curt Bailey has joined Duke Realty Corp. as senior vice president, national retail development. Most recently, Bailey was with Archon Group LP's Midwest office.
- Real estate developer David Boncosky has been named director of Indiana Economic Development Corp.'s life sciences initiative. Boncosky is developing Georgetown at the Crossing-16 upscale townhouses near 86th Street and Keystone Avenue, where a Whole Foods Market is slated to go up. At one time, Boncosky was senior development manager for Duke Realty Corp.'s Anson project.
- Rachel Weifenbach has joined Century 21 Scheetz in Carmel as a Realtor.
Marian College plans new dorm
 Marian College is about to add its first new student housing in more than 40 years. Construction is set to begin this summer on a 78-room, 144-bed residence hall, designed by locally based CSO Architects Inc. The 114-acre campus just south of 38th Street and Cold Spring Road also is getting a new athletic facility, in part to host a new football team.
Read the item above and more real estate conversation starters at Property Lines, IBJ's real estate blog. You can link to the blog, which is hosted by real estate beat reporter Cory Schouten, at www.ibj.com.
Edited by Tracy Donhardt
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