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The owner of central Indiana’s largest office park has secured a new loan for the property as part of a continued effort to revamp the complex on East 96th Street with new amenities and secure new tenants.
Philadelphia-based Rubenstein Partners, which acquired the 1.2 million-square-foot office park in 2016, completed a recapitalization of the multibuilding campus in September. It’s located over several blocks east of North Meridian Street and sandwiched between 96th Street and Interstate 465.
Recapitalization is essentially a long-term refinancing of a property that allows the owner to retain control of the asset while bringing in more equity, either on its own or through a partnership.
Brian Simel, vice president of asset management for Rubenstein, said the process to recapitalize the Parkwood property was “slow moving” and resulted from a need to meet its obligations with the previous lender, whose loan was coming due at the end of this year.
The move includes a new equity investment from Rubenstein as well as a replacement loan. Simel declined to disclose terms of the loan or the amount of equity the firm put in as part of its effort to reposition the property.
He said the company struggled to secure tenants for Parkwood throughout 2023 and early 2024, because prospective tenants are generally hesitant to sign a long-term lease if a property is at risk of changing hands. The campus was about 68% occupied as of last October, according to IBJ’s most recent list of central Indiana’s largest office complexes.
“That [challenging] perception and reality was solved by this recapitalization, with us putting in new money and us getting a new long-term loan,” Simel said. “So, we really feel like we’re on the other side of that, … and now we’re competing with other assets that will be going through that.”
Rubenstein and Indianapolis-based Strategic Capital Partners acquired Parkwood Crossing in 2016 for $162.9 million, buying the complex from Duke Realty Corp., which developed the campus from 1989 to 2005. Strategic Capital Partners is no longer part of the ownership group, and the property is wholly owned by Rubenstein and its affiliates.
Major tenants include Katz Sapper & Miller LLP, Merrill Lynch Wealth Management, CBIZ Inc., Morgan Stanley Wealth Management, Liberty Mutual, Travelers Insurance and ONB Insurance.
Simel said $36.4 million has been invested into the campus over the past eight years, with updates to building systems, indoor and outdoor amenities, lobby spaces, restrooms and facades.
Upon acquiring the campus, Rubenstein worked with Strategic Capital Partners to develop the 14,000-square-foot, two-story Parkwood Amenity and Recreation Center, which features water views, multiple dining options, a full-service fitness center, state-of-the-art meetings spaces and a tenant lounge with an indoor-outdoor fireplace and wrap-around deck.
The investments also included the Village Green, an outdoor space with a putting green, pickleball courts, shuffleboard, cornhole and billiards.
In March 2023, IBJ reported Rubenstein was working with Carmel officials to incorporate Parkwood Crossing’s three largest office buildings, a large parking lot and a pond into a mixed-use development known as Carmel Gateway.
The project, which would be a partnership between the city and Rubenstein, is woul add 1.2 million square feet of housing with nearly 1,200 apartment units, more than 86,000 square feet of retail space and 87,000 square feet of hotel space, while replacing surface lots with parking structures to increase capacity to 3,651 spaces.
Simel said while Rubenstein plans to “continue to invest very aggressively” in the property over the next several years—to the tune of tens of millions of dollars—the Carmel Gateway plans are on hold in the short-term.
“We could still someday do a bigger, denser development like that, but our short-range and mid-range focus has shifted more toward” renovations to the existing property, he said.
The property is still expected to be rebranded as Carmel Gateway.
Rubenstein’s current overhaul plans for other portions of the office park include new amenities like two green spaces for pickup athletic events, co-worker collaboration and relaxation. They also could include leasing space for bar and restaurant offerings, both for those working on the campus and the general public. The company is also continuing to renovate dozens of restrooms across the Parkwood campus.
With ownership of both Parkwood Crossing and Lakefront at Keystone, which comprises more than 870,000 square feet at East 96th Street and Keystone Avenue, Rubenstein is the single-largest owner of office park space in central Indiana.
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Disappointed but not surprised the ambitious plan is on hold. For some reason people really think we need even more office space.