MIDDLE MARKET HIGHLIGHT, OCTOBER 2007

South Bend
Dan Marcec

The past few years in South Bend, Indiana, have seen an increasingly tenant-driven market in commercial real estate, as new construction has been closely tied with existing businesses outgrowing their space and expanding. In the retail sector, more than 1.5 million square feet of space has been developed in the past 4 years, which is equal to the total amount of development in the area for the previous 10 years.

“Although South Bend is prominently known for the University of Notre Dame, it is home to five institutions of higher education totaling more than 22,000 students,” says Bill Schalliol, economic development planner for the Department of Community & Economic Development in South Bend. “The city also is a center for the healthcare industry, and we’re experiencing massive growth in that sector.”

Some of the medical projects to which Shalliol refers include development of a $40 million heart and vascular center as well as a $79.4 million expansion at Memorial Hospital; a $40 million expansion to The South Bend Clinic’s downtown site, as well as the construction of a $3 million branch on the northwest side of town; and Madison Center’s recent completion of an 80,000-square-foot Geropsychology Institute, providing care for older adults, in addition to a children’s service center and ADHD clinic.

With a population of more than 40 million within 1 day’s ground service from South Bend, the region has become an important logistics hub, bringing key warehouse and distribution companies to the area. DHL, UPS, Federal Express and locally-based Towne Air Freight all maintain facilities here, and A.J. Wright, Clark Food Services, Coca-Cola, Pfizer, Tech Data and USF Holland all run major distribution centers in South Bend as well.

South Bend offers incentives to recruit such high-quality companies to the area. The St. Joseph Valley Metronet is an infrastructure created by the city of South Bend in collaboration with private institutions to support business use of technology and innovation.

“The Metronet provides South Bend with the infrastructure to compete with much larger metropolitan areas for high-tech businesses,” Shalliol says. “We’re ready to serve demanding, data-centric businesses, including data centers, disaster-recovery facilities and companies that need massive data storage with big pipe transmission needs; through all this, the Metronet is a key tool in strengthening job retention and attracting new, high-paying, high-tech jobs.” 

In fact, the recent $14 million investment by a developer for the former Studebaker Administration building to become a high-tech office was spurred by the Metronet.

“There is no greater symbol of South Bend’s 20th-century manufacturing heritage than the Studebaker Administration building, and with this announcement, this landmark building will become a new symbol for the high-tech transformation that is occurring now,” Shalliol says.

Some key developments underway include Eddy Street Commons’ first phase. The project is located adjacent to the University of Notre Dame campus. When all is said and done on the $215 million project, which is being developed by Kite Realty Group of Indianapolis, it will include 86,500 square feet of retail space, 75,000 square feet of office space, 134 townhomes, 52 condominiums, a 1,281-vehicle parking garage, and two hotels (a nine-story, 248-room Marriott that includes three floors of condominiums, and a six-story, 123-room Springhill Suites).

In addition, the proposed $378 million Portage Prairie project is poised to bring 3,000 to 4,000 jobs to the northwest side of the city. South Bend-based Holladay Properties plans to convert 500 acres into a master-planned, mixed-use community with residential, office and retail space. The town center will boast more than 500,000 square feet of retail and vast open green space.

“In general, the South Bend market has many factors in its favor, including affordability, access to a number of quality higher learning institutions and medical facilities, a business friendly attitude, available development sites, the Metronet, and a strong commercial and freight airport system,” Shalliol says.

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