Original post https://commercialobserver.com/2021/02/prime-finance-stutz-s9-someraroad-indianapolis/
Turner Woodard, the longtime local owner of the historic Stutz factory complex in downtown Indianapolis, has sold a majority of his ownership in the 400,000-square-foot property he rescued in the 1990s to real estate investment firm SomeraRoad Inc.
The deal, which closed Thursday, includes both the Stutz Business and Arts Center at the corner of 10th Street and Capitol Avenue, and the property known as Stutz II, which sits adjacent to the south.
Both Woodard and SomeraRoad declined to discuss financial details of the transaction, including the sales price and the percentage of ownership that Woodard and his son Turner John “T.J.” Woodard retain.
SomeraRoad CEO Ian Ross said he is not yet prepared to reveal his firm’s plans for the building, other than to say that it intends to retain the historic character of the 110-year-old property.
“We love its authenticity, its architecture, its spirit, and our goal really is to preserve that,” he said.
The Stutz complex was built in 1911-1912 by Harry Stutz, who founded the Stutz Motorcar Co. The facility produced cars until 1935, when the Great Depression forced the manufacturer to close. Eli Lilly and Co. purchased the complex in 1940 and operated a packaging division there until 1982. The property then stood vacant until 1993, when Woodard purchased it.
Woodard redeveloped the property and subdivided it into tenant spaces ranging in size from 150 square feet to more than 6,000 square feet. Today, the complex is about 90% occupied and has 200-plus tenants—dozens of artists have studios there, but tenants also include a range of manufacturing and tech companies.
SomeraRoad will work with existing tenants, the Stutz Artists Association and neighbors to determine “what makes most sense to take this building into the next phase,” Ross said. “We want to be as locally-minded and locally-oriented as possible. We don’t want to disrupt anything that’s here already.”
Woodard said SomeraRoad’s plans include numerous physical upgrades such as installing a new heating and air conditioning system, new elevators, and likely new windows and skylights. Plans also call for a new museum-type space for Woodard’s car collection, which will be relocated from its current space on the second floor of the building.
“It’s a landmark property,” Woodard said of the Stutz complex. “They’ve promised to keep it that way and make it better.”
Artist Amy Carroll, a Stutz tenant and the president of the Stutz Artists Association, said SomeraRoad has already met with some of the building’s artists. Based on that meeting, Carroll said she’s optimistic that the new owners will bring vibrancy to the building.
“They definitely said they want to keep the arts highly involved,” she said.
Carroll also acknowledged that some of her fellow artist tenants are more tentative and concerned, especially amid the pandemic and its uncertainties.
“Change is hard, and it’s (the ownership change), an unknown in a time of unknowns,” she said.
As recently as 2018, Woodard told IBJ that he was not interested in selling the Stutz.
“There’s been plenty of interest over the years, but it’s just not for sale,” the developer said at the time.
Woodard, 72, said several factors helped changed his mind: SomeraRoad wanted to retain the Stutz’s historic character, and the firm was persistent, contacting him several times over the past year to express interest in buying the property.
“That told me that they truly were interested,” Woodard said. “It wasn’t a passing interest.”
SomeraRoad, which has dual headquarters in New York City and Nashville, Tennessee, had the good timing to approach as he was working on his estate planning and thinking about the long-term future of his properties, Woodard said.
The new owner is bringing in the real estate firm Colliers to handle leasing and property management, employing many of the dozen or so people who had worked at the building for Woodard’s management company, Turner John Management.
Woodard said a few of his management employees are staying with him, and both he and they will relocate by the end of the summer to launch a new redevelopment project that he’s not yet ready to discuss.
“Stay tuned,” he said.
Formed in 2016, SomeraRoad has done more than 50 projects around the United States, with a focus on acquiring and redeveloping properties in markets like Nashville, Louisville, Pittsburgh and Kansas City.
The firm has done some other deals in the Indianapolis market. In November 2019, SomeraRoad and Farmington Hills, Michigan-based Friedman Real Estate acquired the former Marsh Supermarket corporate offices at 9800 Crosspoint Blvd. in Fishers. The two firms sold the property last year to local tech firm Knowledge Services.
SomeraRoad also acquired, and later sold, several of Marsh’s former grocery store locations.
SouthSide Works is coming to life.
With new leasing announcements, new development, and a focus on local and lifestyle, the property’s new “inside outside” perspective is activating greenspace, connecting the trail to town center, and bringing new opportunities to one of Pittsburgh’s oldest neighborhoods.
The tenant mix at SouthSide Works remained diverse and exciting- from office tenants like Amazon, General Dynamics, and American Eagle to a mix of local and national retail tenants like Shop 412, The Cheesecake Factory and REI.
New property owners Somera Road are currently developing the new Town Center concept which will include all seasons outdoor food and beverage concepts, a stage for live performances, and the addition of greenspace and stylish common areas. The plans also include development of the property’s expansive green spaces with the addition of a dog park—complete with a food and beverage stop for a refreshing romp with your furry friends, a children’s playground, and several public art activations. Somera Road has currently dedicated $37 million to property updates and enhancements on all fronts.
In addition to this exterior evolution, the old cinema is being converted into innovative office space, aptly named Box Office. The plans convert the theater space to 77,000 square feet of class A steel and glass and will offer prime office space geared toward companies looking to find a home in Pittsburgh or expand their current footprint.
Somera Road’s vision for the development adds an estimated 500 people to the daily traffic on the property, offering an added incentive for its new retail tenant mix. Add in the proximity to the trail and riverfront, large open-air patio overlooking the property, and new outside amenities and Box Office is a work-campus opportunity tailor made for post-2020 life.
The property will also be safely activating community programming and special pop-ups starting with the 2020 Holiday Season. The property is also swapping out the old holiday tree for more experience-based holiday lighting dubbed The Light Garden. The Light Garden is set up for seasonal selfies or family photo opps and will be active through January.
2021 will also bring additional development projects and leasing announcements. Somera Road is planning to develop a multi-family riverfront residential and office project that not only opens up the Monongahela Riverfront to future property residents and professionals but to the community at large.
With 230 multi-family units and 200,000 square feet of waterfront office space planned, the ownership group is focused on taking advantage of the beautiful downriver city view while preserving the integrity of the natural riverfront surroundings.
Innovative programming and partnerships are also on the menu at SouthSide Works in 2021. Look for announcements and highlights coming soon.
Colliers International will start overseeing a 26.2-acre office campus in Overland Park that recently changed hands and underwent a rebranding.
SomeraRoad Inc. hired Colliers to manage 5200 Metcalf Ave., a five-story building just south of Interstate 35 with nearly 300,000 square feet of leasable office space.
SomeraRoad, a New York-based commercial real estate debt and equity investment firm, bought the property in late July from Lexington Realty Trust, a New York-based REIT focused on single-tenant commercial properties, for an undisclosed sum.
5200 Metcalf was left vacant in December 2018, after then-Missouri Gov. Eric Greitens lured Swiss Re to One Kansas City Place in Downtown with $20 million in incentives. Cargill also moved out in late 2018 when it consolidated its area offices in Olathe.
In 2019, Lexington Realty Trust’s lender foreclosed on 5200 Metcalf, after the New York-based REIT reportedly had not made payments on the building’s loan since Swiss Re’s departure.
As of June 30, 2020, Lexington had an outstanding aggregate principal balance of $50,525 for nonrecourse mortgage loans secured by 5200 Metcalf and a second office property in Boca Raton, Fla., its latest quarterly report shows.
5200 Metcalf — now rebranded as Summit52 — no longer is in default, foreclosure or receivership and is “ripe for repositioning,” SomeraRoad Vice President Basel Bataineh said in a Monday release from Colliers.
Summit52 offers flexible floor plates with as much as 78,000 contiguous square feet on a single story. The building could accommodate users as small as 4,000 square feet or serve as corporate headquarters for a single tenant occupying its full 300,000 square feet.
SomeraRoad also immediately is slated to begin renovations of the lobby, café, conference facilities, fitness space and multiple outdoor patios, according to Colliers’ release. The current 679 parking spots could be expanded to as much as 1,622, leasing materials show.
“Our new ownership team is well-capitalized and ready to do deals,” Bataineh said in the release. “We know the greater Kansas City market well, and we are excited to transform Summit52 into a modern workplace destination just like we have done with the 3Y and Lightwell buildings” — the firm’s previous two office acquisitions in the metro area.
Colliers’ Kansas City office’s Management Services Group oversees a portfolio of more than 8 million square feet of third-party commercial real estate investments.
Somera Road Inc. will open a second headquarters in mid-July in Nashville, a move that comes as the New York-based commercial real estate firm continues to gain a presence throughout Music City
A release does note the location of the future office.
Somera Road’s primary headquarters will remain in New York City. However, two key senior team members of the company — Jonathon Reeser, vice president of acquisitions and Joe LeMense, vice president of construction — will relocate to Nashville to co-head the office. The two will soon be hiring additional employees to bolster the local presence.
Somera Road’s Nashville portfolio includes the Voorhees/Downtown Antique Mall site on Eighth Avenue South in The Gulch (read here), WeHo Crossing (read here) in Wedgewood-Houston, 501 Great Circle Road in MetroCenter (home to Nashville-based JumpCrew; read here) and PINS Mechanical Co. in the North Gulch. The company plans to soon announce future projects for Wedgewood-Houston, Germantown and East Nashville.
“Nashville is a perfect second headquarters as we continue to grow our foothold and development pipeline in [the city],” Ian Ross, Somera Road managing principal, said in the release. “Nashville’s proximity to other focal markets with active projects such as Memphis, Louisville, Kansas City and Indianapolis is an added perk.
“The markets we invest in offer an unparalleled value proposition to both employees and employers, offering a lower cost of living and a higher quality of life in forward-thinking, hyper-connected live-work-play environments,” Ross (pictured) added. “Nashville was a natural choice for our HQ2, as it simply reinforces our firm’s primary investment thesis over the past five years.”
Somera Road garnered headlines in mid-March when it announced it had offered a $17 million property purchase and leaseback package as an alternative to the Watkins College of Art and Belmont University merger announced in late January (read here). That effort did not materialize.
The announcement of the future Nashville co-headquarters follows Somera Road’s launch of a division focused on ground-up development. Andrew Donchez, formerly with Boca Raton, Florida-based Mill Creek Residential, will oversee the division as vice president, head of development. Donchez is expected to spend some time in Nashville given Somera Road’s multiple projects in the city.
Jul 1, 2020, 12:35pm CDT
A real estate developer from New York is so smitten with Nashville that it’s opening a permanent office in mid-July — and tipping its hand about where its next projects will occur.
Somera Road Inc. announced that three employees will move from New York to Nashville, to elevate what had been a part-time office into a full-time operation. Two of those three transplants will jointly lead the Nashville office: Joe LeMense, the company’s vice president of construction, and Jonathon Reeser, vice president of acquisitions. Somera Road will look to hire three additional employees in Nashville, for what it’s dubbing a “second headquarters.”
Somera Road illustrates how quickly so many out-of-state developers have become smitten with the city’s growth, prospects and vibe. Somera Road joins a growing group going as far as opening an office in the city.
Somera Road sealed its debut investment less than three years ago, buying a former Gibson Guitar warehouse in the Gulch. Today, it’s home to two entertainment concepts, Pins Mechanical Co. and 16-Bit Bar+Arcade. Somera Road’s other developments include revitalizing an industrial building in Wedgewood-Houston, spending $18 million to buy an office building in MetroCenter, and paying $30 million at the end of 2019 for 2.6 acres of land near the Gulch on Eighth Avenue South, including the Voorhees Building.
Ian Ross, founder and managing principal of Somera Road, said Nashville sits in the “pole position” of all the markets the company invests in (referring to the most favorable spot to begin a car race).
“Nashville’s proximity to other focal markets with active projects, such as Memphis, Louisville, Kansas City and Indianapolis, is an added perk,” Ross said in a statement. “These cities allow for increased productivity, improved retention and a happier and more fulfilled workforce – allowing people to embrace some of the American Dream elements that have become out of reach in high-cost gateway cities.”
Somera Road said new projects will “be announced shortly across Wedgewood-Houston, Germantown and East Nashville.”
“In addition to being a thriving city with a diversified employment base, Nashville’s location is ideal for us as we continue to expand our platform, located within a two-hour drive or flight to the majority of our portfolio,” Ross said. “And most importantly, our team and our families have fallen in love with the city.”
The Somera Road team is excited to welcome Andrew Donchez to our ranks. Andrew will serve as Vice President of Development, overseeing all aspects of Somera Road’s ground up multi-family & mixed-use development platform. Andrew will lead the acquisition, underwriting, design, entitlement, construction and operations of ground up development projects for Somera Road.
Prior to joining Somera Road, Andrew worked for Mill Creek Residential Trust, where he served as VP of Development, overseeing all development activities in the Northeast. At Mill Creek, he was involved in and led the development of a diverse pipeline of development projects, totaling over 1,400 residential units and exceeding $600MM of total development value throughout New Jersey and New York.
Andrew brings over 15 years of experience developing ground up, residential, commercial and mixed-use projects. Prior to joining Mill Creek, Andrew was a Development Executive for RXR Realty where he helped build the residential development platform and oversaw the development of 1,453 residential multifamily apartments with total development values of over $700 million. Andrew helped lead the team that reshaped the downtowns of suburban Westchester County, New York through innovative transit-oriented projects and a pioneering public/private partnership with the City of New Rochelle. The innovative Master Development partnership entitled over 10 million square feet of by-right development potential and secured the acquisition of parcels entitled for over 4 million square feet of development potential.
Prior to his tenure at RXR, Andrew was a Senior Project Manager for Toll Brothers, Inc. in Westchester, New York and began his career as a Development Associate at Ashley Development in the Lehigh Valley, Pennsylvania.
Somera Road is also excited to announce the hiring of Sam Schifman as an Associate supporting Acquisitions and Asset Management. Sam joins Somera Road from Equus Capital Partners where he most recently supported the asset management and disposition of their suburban office product.
Please join us in welcoming Andrew and Sam to the Somera Road team.
To see the whole team please visit Somera Road .
Despite the pandemic, one national retailer is making plans to expand in St. Louis.
Dollar Tree (NASDAQ: DLTR), which has more than 60 locations throughout the region, has signed a long-term lease for roughly 11,000 square feet at Village Square in Hazelwood, the once-defunct shopping center that New York-based Somera Road Inc. bought in late 2018. Terms of the Dollar Tree lease were not disclosed, but the retailer is expected to open this summer.
“Dollar Tree is a recession proof business. Their low price point attracts a variety of shoppers, and they are positioned to excel in both good and challenging economic times,” said Michael Ervolina, senior associate at Somera Road.
In addition to Dollar Tree, Axes Physical Therapy and civil construction firm Millstone Weber, which is working on the Interstate 270 project, also signed new leases at Village Square. Concentra urgent care also signed a long-term extension of its lease at Village Square. The leases follow the more than $1 million Somera Road has invested in facade improvements to the property at Lindbergh Boulevard and Interstate 270.
Ian Silberman of Location CRE and Rob Goltermann of DCM Group represented Somera Road in the leases.
Although the pandemic hasn’t impacted the center’s leasing, it has led to Somera Road to pause its grant program that would have given free rent and startup capital for small businesses and entrepreneurs. Over 200 applicants applied but the final “Shark Tank” event that would have determined the winners has been postponed until it is safe to hold the event publicly, Ervolina said.
Retail space in north St. Louis County leases for $10.87 per square foot on average, the lowest across the St. Louis metro area, according to the latest available data from Newmark Grubb Zimmer.
Somera Road acquired the property from special servicer LNR Partners in late December 2018 for $2.3 million according to data from Reonomy. At the time, Village Square was appraised for $4.2 million but owed more than $18 million on its mortgage.
By Steph Kukuljan – Reporter, St. Louis Business Journal
Apr 27, 2020, 2:15pm CDT