16 Tech pencils in plans for two more buildings after early leasing success

A rendering of the Waterway Labs @ 16 Tech building. (Image from 16 Tech, courtesy of NexCore Group)

With most of its existing office space already leased and more than 280 apartments now under construction, 16 Tech Community Corp. is embarking on plans for the next phase of development at its eponymous 50-acre campus on the northwestern edge of downtown Indianapolis.

The master developer has begun pre-leasing two new buildings planned for the entrepreneurism-innovation district south of the intersection of West 16th Street and Indiana Avenue: a 100,000-square-foot laboratory building and a 40,000-square-foot office structure that would be dedicated to sports- and health-focused tenants.

No timelines have been set for the buildings’ construction.

The lab building, to be known as Waterway Labs, is slated for development by Denver-based NexCore. With a development cost estimated at $50 million to $60 million, the five-story structure would include a mix of build-to-suit lab space, offices and fully furnished labs that are move-in ready for growing companies.

The building is expected to be constructed just east of 16 Tech’s Innovation Building 1, which houses Indiana Biosciences Research Institute and offices for the Indiana University School of Medicine.

Emily Krueger, CEO of 16 Tech Community Corp., said there has been early interest in the development but that leasing discussions are still in their infancy, with some commitments expected by the end of this year.

While a brokerage team has not been announced—that is expected this fall—the build-to-suit lab space is expected to cost at least $40 per square foot per year. Once most of the building has been pre-leased, 16 Tech would allow NexCore to move ahead with construction.

The Indy Sports and Health Innovation Center, the other building that is in pre-leasing, is expected to be built at the southeast corner of Indiana Avenue and Gent Avenue. Krueger said the goal is to “build off the strengths” of 16 Tech’s proximity to both Indianapolis Motor Speedway and the IU Health hospital campus under construction at West 16th Street and Capitol Avenue.

“We have some really neat anchor tenants that we’re talking with there, which would be in the sports technology and health technology spaces,” she said, adding that no formal agreements have yet been reached.

The efforts to further develop 16 Tech come as construction gets underway on The Vanguard, a 285-unit apartment complex from Indianapolis-based Browning Investments and Barrett & Stokely Inc. The project, which IBJ first reported in 2021, is expected to feature a 293-space parking garage and 1,900 square feet of retail space. It will be at the north end of the campus, adjacent to the Machyne Makerspace.

The apartment project, initially expected to cost at least $50 million, will have a mix of studios and one- and two-bedroom units ranging from 490 square feet to 1,243 square feet. The complex is also expected to include at least 15 units accommodating individuals and families making up to 30% of the area’s median income, with the rest of the units at market rate. The development is expected to open in early 2025.

Also under construction is a 342-foot-long vehicular and pedestrian bridge over Fall Creek connecting 16 Tech to the hospital and IUPUI, which in July 2024 will be split into the separate IU Indianapolis and Purdue at Indianapolis campuses. The bridge is expected to be completed in 2024.

Krueger, who assumed the role of CEO in 2021, said the bridge is key to future development, including a proposed hotel that would hug the riverbank directly north of the bridge. In total, there are eight shovel-ready sites controlled by 16 Tech, including those earmarked for the hotel, Waterway Labs and the Sports and Health Innovation Center.

Krueger said 16 Tech is meeting own its expectations for growth, particularly in light of the pandemic.

“The biggest challenge for 16 Tech is the timeline, and in many respects that’s been out of our control because no one predicted the COVID-19 pandemic,” she said. “But in the grand scheme of things, I think we’re doing a fabulous job in achieving our mission and vision.”

To date, $109 million has been invested by private developers into 16 Tech, while another $104 million has been invested in infrastructure work, including the bridge and site preparation for available parcels. Another $40 million to $50 million is expected to be invested in public infrastructure in the coming years to help realize the master plan, Krueger said.

Innovation Building 1 is fully leased, while the HqO Innovation Hub has about 85% of its office space leased. And Machyne, which offers dedicated areas for creators and startups focused on prototype and small-scale manufacturing, is 100% occupied.

EMC2, which is considered part of the 16 Tech campus but owned and operated by another entity, is fully occupied on office space and 60% leased on the manufacturing side.

In total, Krueger said, more than 90 companies work in the district, not including the 25 food vendors at The AMP food hall.  The development corporation says that at least 43 are startups, 33 are focused on education, workforce or talent incubation, and at least 13 are engaged in university research.

16 Tech was one of 20 institutions selected to join the Global Institute on Innovation Districts, a collection of fewer than 50 entities worldwide.

“Projects like 16 tech are big bets and they require a long-term commitment from the community and from the partners,” Krueger said. “So, we’re in the midst of that.”