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With Regions Tower facing foreclosure, could a repurposing be ahead?

Regions tower facing foreclosure

INDIANAPOLIS (WISH) — Regions Tower in downtown Indianapolis is facing a foreclosure lawsuit as more companies’ employees transition to working from home.

That’s meant office spaces such as the high-rise have struggled. But, real estate experts are optimistic about repurposing these buildings.

Doug McCoy, the director of the Center for Real Estate Studies at Indiana University, says redeveloping an office building is costly and time-consuming. He expects some demand for office space to return, but says working from home has significantly reduced the need.

“If not office, it could be another mix of things like multifamily and retail and condominiums or what have you,” McCoy said. “We go through these cycles, right, where we have to transition real estate?”

McCoy says building conversions are not possible in every case.

“It’s challenging. It’s going to be building by building. It’s going to depend on how that building was built,” McCoy said. “How friendly it would be to modernize it and build it out, whether it’s worth the cost, and so forth. It’s not really one blanket answer for all buildings.”

Cities have a vested interest in seeing buildings repurposed to keep their tax base strong. “It will hurt the tax base because your real estate values are based on the assessed value of whatever building it is and, so, when buildings lose value, we lose real estate taxes,” McCoy said.

The foreclosure lawsuit suit, filed Friday in a Marion County court, claimed a loan had been scheduled to be paid in full by last Oct. 1, to the tune of $74,894,311.90. The lawsuit asked a judge to foreclose and appoint a receiver to manage the building, which is Indiana’s and Indianapolis’ third tallest.

Regions Tower website says Dallas-based architect Thomas E. Stanley designed the 36-story building, which was developed in 1970 as the headquarters for Indiana National Bank. The high-rise sits a block northeast of Monument Circle, and across Pennsylvania Street from the Birch Bayh Federal Building and U.S. Courthouse. It’s been updated multiple times, especially after receiving damage from weather, including tornado-strength winds in April 2006.

Court records show the tower is owned by NG 211 N. PENNSYLVANIA ST LLC, and REGIONS TOWER MF LLC. Regions Bank is a tenant of the bank but does not own it.