Walker & Dunlop Lists Milhaus’ Artistry, Indianapolis’ Iconic Mixed Use Apartment Complex

Rhea-AI Summary

Walker & Dunlop's Midwest Investment Sales team is serving as the exclusive advisor for Artistry, a prominent mixed-use apartment complex in Indianapolis. Artistry, consisting of 554 units, offers significant investment potential in a market known for strong rent growth. The acquisition includes favorable terms, such as a full-term interest-only period at a below-market rate. Artistry, part of a three-phase complex, includes high-end amenities and is strategically located near major employers and attractions. The property is expected to drive rents and offers potential for significant return through upgrades. Walker & Dunlop, a leader in multifamily property sales, completed over $8.7 billion in property sales in 2023.

Positive

• Artistry offers 554 units in a high-demand market known for strong rent growth.
• Favorable acquisition terms include a full-term interest-only period at a below-market rate.
• Significant potential for rent increases and returns through interior and amenity upgrades.
• Walker & Dunlop completed over $8.7 billion in property sales in 2023, showcasing their expertise.
• Strategic location near major employers like Salesforce, Eli Lilly, and Indiana University.
• High-end amenities include a rooftop infinity pool, dual-level fitness centers, and chic gathering spaces.

Negative

• Increasing rents in a competitive market could pose affordability concerns.
• 40,000 square feet of vacant commercial space may require substantial investment to reshape.
• The property market's reliance on strong rent growth predictions may not materialize.

Insights

Real Estate Market Analyst

The acquisition of Artistry in Indianapolis represents a significant opportunity in the multifamily real estate market. Indianapolis, ranking as the #4 rent growth market in the nation according to Yardi Matrix, provides a favorable environment for real estate investments. The potential for 3%+ rent growth in 2024, as forecasted by RealPage, further strengthens the attractiveness of this deal.

Strategically located near major employers and boasting a range of high-end amenities, Artistry is well-positioned to attract and retain tenants. The inclusion of 40,000 square feet of vacant commercial space also offers additional revenue streams through potential commercial leases or redevelopment into amenities that can enhance tenant experience and drive higher rents.

Moreover, the option to assume an existing Fannie Mae loan with favorable terms - including a full-term interest-only period at a below-market rate - can be highly attractive for potential buyers, providing financial flexibility and reduced initial expenditure. Investors should also consider the potential for rent increases given the mention of rent gaps of up to $1,000 among top assets in the competitive set.

Financial Analyst

The financial aspects of this acquisition are particularly compelling for investors. The mention of existing Fannie Mae loan terms, including a full-term interest-only period at a below-market rate, reduces initial financial burden and enhances cash flow management. The opportunity to acquire an asset below its replacement cost is a key highlight, signaling potential for long-term value appreciation.

Walker & Dunlop's track record of completing over $8.7 billion in property sales volume and originating over $24 billion in debt financing volume, including $20 billion specifically for multifamily properties, bolsters confidence in their ability to execute this sale efficiently. Investing in a high-density urban asset like Artistry, especially with positive leverage on in-place, tax-adjusted NOI, can lead to significant returns.

Urban Development Expert

For those interested in urban development, this acquisition highlights the ongoing transformation within Indianapolis. Artistry, part of a three-phase complex, not only redefines urban living but also stimulates local economic growth by attracting residents and businesses to the area. Its proximity to major employers like Cummins, Salesforce and Eli Lilly, alongside Indiana University's presence, ensures a steady demand for residential units.

The development's focus on premium amenities like a rooftop infinity pool, dual-level fitness centers and chic gathering spaces suggests a commitment to providing a high-quality living experience, which can further enhance the property's marketability. The potential to reshape the streetscape with the vacant commercial space aligns with broader urban renewal initiatives, encouraging vibrant community spaces that benefit both residents and local businesses.

BETHESDA, Md.--(BUSINESS WIRE)-- Walker & Dunlop, Inc.'s Midwest Investment Sales team announces its role as the exclusive advisor for Artistry, an iconic mixed use apartment complex in the cornerstone of Indianapolis' urban residential landscape. Comprising 554 units, Artistry presents a prime opportunity to acquire both size and scale in one of the Midwest's most vibrant markets. According to Yardi Matrix, the Indianapolis metro area is the #4 rent growth market in the nation and as RealPage reports, continues to dominate the multifamily leaderboard as one of six US markets forecast to achieve 3%+ 2024 rent growth.

Artistry Apartments. (Photo: Business Wire)

The newly acquired Walker & Dunlop Indiana Investment Sales team, led by Steve LaMotte Jr., is a longtime advisor to client, manager and developer, Milhaus. The team is looking to identify a buyer who will acquire the Artistry free and clear or with the option to assume the existing Fannie Mae loan. The buyer will enjoy favorable terms, including a full-term interest-only period at a below- market rate.

“The acquisition of Artistry offers an excellent single investment opportunity that carries a flag in one of the most predictable and best performing metros in the nation,” said Andrejs Kancs, vice president of finance and asset management at Milhaus. “We are looking forward to working with our colleagues at Walker & Dunlop again, who have in-depth expertise and experience in the Indianapolis market.”

Artistry, the cornerstone of a three-phase complex including Mentor & Muse and Mosaic, has redefined urban living in Indianapolis. With an unmatched amenity package boasting a rooftop infinity pool overlooking the skyline, putting greens, dual-level fitness centers, and chic gathering spaces, Artistry delivers an unparalleled lifestyle. Situated strategically across from Cummins' global distribution headquarters and near major employers such as Salesforce, Eli Lilly, and Indiana University, Artistry offers diverse employment opportunities. Its prime location also grants easy access to premier amenities, entertainment venues, and top attractions, solidifying its status as the pinnacle of urban living.

"With 554 units at center of everything downtown Indianapolis, Artistry is the most walkable asset and recognizable brand in this powerhouse Midwestern market. Its acquisition brings with it the opportunity to drive rents which are among the lowest in its competitive set. Artistry also produces positive leverage on in-place, tax-adjusted NOI, unlike most Indianapolis deals over the past 24 months," said Steve LaMotte, Jr., managing director of Investment Sales at Walker & Dunlop. "We are excited to work with our partners at Milhaus again in bringing this terrific asset to market."

The acquisition of Artistry allows investors to secure a high-density urban asset below replacement cost. With potential rent gaps of up to $1,000 among top assets in its competitive set, there is significant upside potential through interior and amenity upgrades. Additionally, 40,000 square feet of vacant street-level commercial space offers the potential for reshaping the Artistry streetscape.

Walker & Dunlop is a leader in multifamily property sales, having completed over $8.7 billion in property sales volume in 2023. The firm is also one of the top providers of capital to the U.S. multifamily market. Over the same period, Walker & Dunlop originated over $24 billion in debt financing volume, including lending over $20 billion for multifamily properties. To learn more about our capabilities and financing options, visit our website.

About Walker & Dunlop

Walker & Dunlop (NYSE: WD) is one of the largest commercial real estate finance and advisory services firms in the United States. Our ideas and capital create communities where people live, work, shop, and play. The diversity of our people, breadth of our brand and technological capabilities make us one of the most insightful and client-focused firms in the commercial real estate industry.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240603861307/en/

Investors:

Kelsey Duffey

Investor Relations

Phone 301.202.3207

investorrelations@walkeranddunlop.com

Media:

Nina H. von Waldegg

VP, Public Relations

Phone 301.564.3291

info@walkeranddunlop.com

 

Source: Walker & Dunlop, Inc.

FAQ

What is Walker & Dunlop's role in the Artistry acquisition?

Walker & Dunlop is the exclusive advisor for the acquisition of Artistry, a mixed-use apartment complex in Indianapolis.

How many units does Artistry in Indianapolis have?

Artistry has a total of 554 units.

What are the acquisition terms for Artistry?

The acquisition terms include a full-term interest-only period at a below-market rate.

What amenities does Artistry offer?

Artistry offers high-end amenities such as a rooftop infinity pool, dual-level fitness centers, and chic gathering spaces.

What is the potential for rent growth in the Indianapolis market?

The Indianapolis market is forecasted for 3%+ rent growth in 2024, making it a strong market for investment.

Who are the major employers near Artistry in Indianapolis?

Major employers near Artistry include Salesforce, Eli Lilly, and Indiana University.