Former HHGregg HQ campus on market as industrial park, lures new-to-Indiana tenants

The former headquarters campus of HHGregg Inc. has been redeveloped as a three-building industrial park with two outlots for sale or lease. (Image courtesy of Citimark and Colliers)

A local developer has invested about $30 million into the former HHGregg Inc. headquarters campus on the far north side of Indianapolis, with hopes of fully leasing the property by next year as an industrial park.

Indianapolis-based Citimark has already leased about one-quarter of the old appliance retailer’s home at 4151 E. 96th St.—which it acquired in December 2021 for $14 million—to a pair of companies that will use their spaces for showroom, office and warehousing purposes.

Citimark has largely converted the 30.6-acre property to a 313,100-square-foot industrial park named 96th Street Commerce Park. It invested about $16 million to tear down the iconic two-story HHGregg showroom on the north side of the site and separate the remainder of the previously connected buildings into three freestanding structures on the south, west and east sides of the park.

It has expanded the western-most building, nearly doubling its depth, and tore down a former Steak ’n Shake at 4105 E. 96th St. It’s marketing that site and an adjacent outlot parcel to the east along 96th Street for retail, restaurant or medical office users to either lease or purchase.

Citimark’s efforts come after a couple of failed attempts to jumpstart development there following HHGregg’s demise in 2017.

Indianapolis contractor Deem LLC in 2020 saw its deal for the property fall apart during the rezoning process. In early 2019, Napleton Automotive Group called off plans to open a new Kia dealership on the site, opting to move to a multi-use building along Keystone Avenue.

“While other [groups] had looked at this for different potential uses, the industrial world changed pretty significantly” in recent years, said Tim Hoffman, managing director and chief investment officer for Citimark. “The timing of that was perfect for us, because we’re at the forefront of that product type. Rental rates in industrial have increased significantly, over the years to a point where it made sense for this project … to be viable.”

Virginia Tile, a Michigan-based flooring and decor company, is leasing about 51,800-square-foot space in the eastern building for a new Indiana showroom, which opened last week. Likewise, Springfield Electrical Supply Co. has expanded to Indiana with a 28,800 square feet space in the western building.

Jimmy Cohoat, a commercial real estate broker with the Indianapolis office of Toronto-based brokerage Colliers International, said an additional 232,000 square feet is still available for lease, with spaces ranging from 12,000 to 145,100 square feet.

Cohoat and Colliers industrial broker Tyler Wilson are representing Citimark on lease negotiations.

Cohoat said the average cost for users taking smaller portions—about 20,000 square feet—is around $9 per square foot per year, but the rate fluctuates depending on space needs. Rents also can be dependent on costs associated with space buildouts.

The southernmost building is entirely vacant—145,100 square feet—and features two built-out office spaces, warehousing areas and 28 docks for semi-trailer parking and loading at the rear.

The eastern 89,700-square-foot building, for which just under 38,000 square feet is still unoccupied, has an office space and eight total docks. The 78,300-square-foot western property has 49,500 square feet of vacant space, including two office spaces and 13 docks.

The former Steak ’n Shake outlot is about 2.76 acres, while the other vacant outlot, adjacent to the campus’ water retention and detention ponds, is about 1.2 acres.

Cohoat said the marketing focus is generally on local and regional companies that are trying to establish a stronger presence in central Indiana, whether they are servicing consumers, contractors or logistics firms. The hope, he added, is to fully lease the existing structures by mid-2025.

“Looking at the crystal ball, if activity continues to trend as it’s been recently, the next 12 months or so would be ideal,” he said. “But obviously that can change with the different types of users. All three buildings are seeing good activity, but some of the smaller, sub-50,000-square-feet groups right now, especially, have been rather active. We have a number of proposals out and are waiting to hear back from some of those groups right now.”

Citimark is currently seeking a variance of development standards from the city to allow for outdoor storage on the property, which among other uses would permit equipment rental companies to lease space and store their products on-site.

The request is set to go before the Metropolitan Development Commission on April 3 with a recommendation for approval from the hearing examiner, contingent on Citimark meeting commitments related to what specific uses would be allowed.