Hendricks closes on $85M purchase of Circle Centre Mall
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Circle Centre Mall has a new owner. Hendricks Commercial Properties LLC on Wednesday completed a deal to acquire the downtown Indianapolis campus ahead of an expected decade-long revamp that could in total reach $600 million.
Wisconsin-based Hendricks spent $85 million to buy most of the mall structure as well as intellectual property and various management contracts from longtime ownership group Circle Centre Development Co.
Hendricks is still working to finalize a separate deal with the city of Indianapolis and the Indiana Economic Development Corp. that will include incentives for the larger project as well as the acquisition of the L.S. Ayres building, the parking garages and the land beneath the mall. A preliminary agreement indicated the project would receive at least $64 million in tax credits and loans, as well as other funding mechanisms like tax-increment financing bonds.
For now, the mall will remain open and operating largely as it is today. Hendricks will take over management of the property from JLL. That includes management of the Ayres building, which was most recently the home of Carson’s.
The acquisition of the mall property comes four months after Hendricks first told IBJ it had reached an agreement in principle with the ownership group, with plans to reimagine the nearly 30-year-old mall as an open air, pedestrian-focused neighborhood with retail, office and residential areas.
While work on the $100 million, first phase of the project could start as early as 2025, the redevelopment will likely take up to a decade to be fully realized.
“We are thrilled to add the Circle Centre Mall to our portfolio of dynamic businesses and properties,” said Rob Gerbitz, CEO of Hendricks, in written remarks. “We are committed to investing in the future of Indianapolis and believe that a new vision for the Circle Centre Mall property will bring more vibrancy to the heart of the downtown area and also create new opportunities for economic growth and community engagement.”
The mall was sold to Hendricks by the 17-member Circle Centre Development Co, which has owned the mall since it opened in 1995. The city still owns the land beneath the mall, but is expected to sell it as part of its deal with the IEDC and Hendricks.
Adam Collins, an attorney who represents the mall ownership group, said the group views Circle Centre as a “critical hub” for downtown—something it expects will continue with Hendricks.
“Ownership is grateful for such a long, successful run and truly appreciates the support of the city and the state, which made the transition to Circle Centre’s next phase possible,” said Collins, partner at Wallack, Somers & Haas and legal counsel to Circle Centre Development Company.
“Hendricks Commercial Properties’ track record of stewardship and transforming public spaces in Indiana is unparalleled, and we are confident that they will do an incredible job on the next iteration of this project.”
The agreement between Hendricks and Circle Centre Development Co. focuses on the transfer of the mall property and related leases with the city. The deal also includes rights to the Circle Centre name, although the new development is expected to be branded differently.
The city last July tentatively agreed to provide a $24.4 million no-interest loan for the project (which would be awarded through the Indiana Economic Development Corp.) that could be used toward the purchase of the mall property. Up to $10 million of the loan could be forgiven if Hendricks meets certain benchmarks, according to the term sheet. The state at that time was expected to provide $42 million in rehabilitation tax credits for the project.
Gerbitz said it could be early next year before Hendricks finalizes that development agreement with the city and state.
“We have a lot of work to do on that yet,” he said. “As far as the strategy, we have a lot of that done already. Now that [the deal has] officially closed, we can dig into the details.”
The Central Indiana Regional Development Authority is also weighing whether the project will benefit from any of the $45 million in grant funds the area was allocated as part of the Regional Economic Acceleration and Development Initiative, or READI.
Gerbitz said work on the mall redevelopment may not begin until late 2025 or early 2026, as the company works through construction documents and planning processes.
But he said he is hopeful some work can begin on the former Carson’s building at the southwest corner of Washington and Meridian Streets sooner rather than later, starting with replacing windows and making other aesthetic improvements.
“That’s one we want to really zero in on pretty quickly,” Gerbitz said.
The revamp of Circle Centre is expected to clear parts of the existing structure—particularly the central, interior hallway that currently runs the length of the building, from the mall’s north end at Washington Street to its south end at Georgia Street.
He said the southern half of the campus, bounded by Maryland Street to the north and Georgia Street to the south, is still expected to be a major part of the development’s first phase, but that could shift as discussions continue with the city and state.
The developer envisions replacing that hallway with an outdoor, elevated promenade that would be flanked to the east and west by a dozen four-story buildings with a mix of residential, parking, entertainment, retail and office space encompassing 1.9 million square feet.
Circle Centre was developed by fusing a number of existing buildings and facades with new structures, creating a traditional mall structure with just a few key entrances and stores facing an interior hallway. That type of structure has fallen out of favor with shoppers and developers.
Hendricks plans to modify that to create a campus that’s more like a village, with some of the existing buildings torn down—either in whole or in part—and others retrofitted and given new facades and designed to operate as stand-alone buildings connected by the outdoor promenade, plazas and green space.
As currently proposed, the revamped campus is expected to consist of 376,000 square feet of retail space, including 135,000 square feet along the central promenade, and about 471,000 square feet of office space.
Plans for residential space remain more tentative. The initial concept calls for 228,000 square feet of apartments, condos and other residential options, although Gerbitz said specific unit counts and rent rates are still being discussed.
Hendrick was first was approached in mid-2022 by the city and state to make a pitch for the mall property, after building good will with the parties for its work on the Bottleworks and Ironworks developments.
In the nearly two years since, Hendricks has been in conversations with the city and state about incentives and priorities for the project, while separately negotiating with the mall’s ownership about the property’s acquisition.
“The entire team—at Hendricks, the mall ownership, the city and the state—really worked pretty hard at this for a long time,” Gerbitz told IBJ said. “It was a complicated deal, but everybody got through it. I told them, ‘You guys think this was hard? Now we’ve got the real hard stuff to do.’”