Space is filling up in the Ash Skyline Plaza – a multimillion-dollar downtown project that is creating a more competitive market for commercial space.
DuCharme, McMillen & Associates Inc. on March 17 became the latest tenant announced for the development in the heart of downtown Fort Wayne.
The tax consulting firm plans to spend $2.5 million to relocate its office from Fort Wayne’s north side into the Ash Skyline.
In February, Barnes & Thornburg LLP announced it signed a 15-year lease for 17,000 square feet of space in Ash Skyline at 888 Harrison St., Suite 600. The law firm has about 30 employees in its downtown office in the Indiana Michigan Power Center on Wayne Street. It expects to move in mid-August to Ash Skyline.
Although new buildings can be particularly appealing, owners of older properties can still make their space attractive for businesses reviewing where they want to operate when leases expire, local commercial property professionals say.
Zacher Co. President Steve Zacher said natural light – often through increased window space – and open floor designs that can easily be adjusted are a draw for many tenants needing efficiency and flexibility.
"There’s fewer hard walls, the characteristics of the space is different than it used to be," said Zacher, whose company provides periodic market reports assessing retail and office space demand.
"Sometimes," Zacher said, "I think these users are finding it’s better to start over from scratch than to try to reconfigure what you have, and sometimes they find they can go into less space, but better space, which leads to workers being more productive and just a better working environment."
Zacher Co. released a report in February that said more than 2.8 million square feet of commercial space was started or completed last year in northeast Indiana, more than double the 1.4 million in 2014.
The vacancy rate at the beginning of this year was 5.25 percent, representing about 5.5 million square feet of space. That was down from the 6.52 percent vacancy rate, representing 6.6 million square feet, at the start of 2015, the report said.
Ash Skyline will have nine floors and about 141,000 square feet of commercial and retail space and an attached parking garage. It’s part of a $98 million development announced in 2013 that will include a new headquarters for insurance company Ash Brokerage.
Other confirmed tenants announced for Ash Skyline are a branch of Lake City Bank, a DeBrand Fine Chocolates store, an executive branch of the Fort Wayne YMCA, The Golden restaurant and The Find, a sister store to The Trove in Roanoke.
Allie Braun, marketing and communications consultant for DuCharme, McMillen & Associates, said her firm will move into Ash Skyline from 6610 Mutual Drive on Fort Wayne’s northwest side when the lease expires.
The firm wouldn’t disclose how much space it currently has with its offices near Coldwater Road, but a news release said DuCharme, McMillen & Associates will also have 17,000 square feet on the sixth floor of Ash Skyline. DuCharme, McMillen & Associates has been in Fort Wayne since the early 1970s. It employs 48, but expects to add up to 43 jobs by 2020.
"We are just looking forward to a more open space that will create a better work environment and culture for our current employees and will be used as a visual appeal for the new employees we will be attracting over the next five years," Braun said.
Ash Skyline was one of five locations DuCharme, McMillen & Associates considered for relocation.
"They were a mix of new and old, and suburban and downtown," Braun said.
The committee deciding on the location included a mix of employees, and a primary goal was having everyone on the same floor. The firm’s current office space includes an upstairs and basement level, Braun said.
Diana Parent, CEO of Sperry Van Ness/Parke Group LLC, said the Ash project has helped increase interest downtown.
Parent said it’s difficult to say what other older properties can do to ensure they’re attractive to tenants because each building is different.
SVN/Parke Group manages more than 1 million square feet downtown.
"The activity downtown is very strong right now," Parent said. "We’ve done rehab projects. We’ve done some redevelopment projects."
Bill Bean is vice president of Hanning & Bean Enterprises, which owns the Indiana Michigan Power Center that Barnes & Thornburg is moving from for space in Ash Skyline.
"It’s just like houses. Sometimes there’s nothing wrong with the house, but people want a change of scenery," Bean said, acknowledging a certain amount of excitement being generated by the Ash project. Initially, Bean’s firm was going to develop the residential component of the Ash project, but pulled out in 2014 citing concerns about delays.
Bean’s firm just completed a more than $4 million investment in the Indiana Michigan Power Center, which is 100 percent occupied. The utility Indiana Michigan Power occupies about 80 percent of space in the 27-floor building, which had been known as One Summit Square until the name change in 2014.
In November, Bean said all leases for the building expire. Indiana Michigan Power has agreed to a 15-year lease that will start when the existing one expires, Bean said. JP Morgan Chase is another existing tenant that Bean said has renewed its lease.
Recent updates to the building include gutting and reconfiguring space, updating the HVAC system and improving lighting and aesthetics, Bean said.
"It created some very nice collaborating spaces inside the building. A lot of work was done to create the most conducive workplace environment for the employees," he said. "Basically you put money back into (older properties) and you update the features of the building and refresh the conditions."