HEARTLAND SNAPSHOT, AUGUST 2004

Indianapolis Retail Market

In the Indianapolis area retail market, there is continual development of new neighborhood and strip centers, according to David Martin, senior advisor of Sperry Van Ness – Martin Commercial Group. Clay Terrace, a joint venture between Simon and Lauth Property Group, is a 570,000-square-foot, open-air lifestyle center that will open next spring in Carmel. In Noblesville, Duke Realty Corporation is developing the 454,637-square-foot Stoney Creek Market Place, which is set to open next spring, and Maefield Development is developing the 300,000-square-foot Hazel Dell Crossing, which will open next summer. Other upcoming developments include Cool Creek Commons in Westfield, Villages at Geist in Fishers and Raceway Plaza in Avon. Dick’s Sporting Goods has opened stores at Castleton Commons and Greenwood Park Mall. “Because these new developments are springing up around the Indianapolis area, some of the older malls have been struggling to maintain tenants,” Martin says.

“The majority of activities appear to be occurring in the suburban areas — particularly on the north side of town in Hamilton County and northern Marion,” he says. “This area of Indianapolis, including Carmel, Fishers, Noblesville, Zionsville and Westfield, has seen explosive growth in new housing development in recent years.” Hamilton County has one of the fastest population growths of any county in Indiana. Significant growth also is being seen in Hendrix County. Avon, Plainfield and Danville have seen a considerable amount of new single family and multifamily housing in recent years. “This area is close to the Indianapolis International Airport, which currently has a major expansion underway as well as a growing warehouse and distribution area — all of which are creating jobs,” Martin says. Several south-side communities, such as Greenwood, have enjoyed significant growth as well.

The active retail developers in the area include Simon, who has its national headquarters in Indianapolis, Skinner & Broadbent, Premier Properties USA, Lauth Property Group, Tharpe Investments, Flynn & Zinkin, Duke Realty Corporation, P.K. Partners, Paragon and KITE. New retailers to the market are Dick’s Sporting Goods, Saks Fifth Avenue and Wal-Mart’s new neighborhood grocery store concept.

“Vacancy rates in newly constructed centers in the suburban markets are very low, generally zero percent to 10 percent,” Martin says. Vacancy rates in older centers tend to bear the effects of the newer constructed retail centers.

“The north, south and west markets will continue to see new retail development over the foreseeable future,” he says. “There is ample undeveloped land with excellent accessibility to major interstates and arterial roadways.” There also will be new activity downtown, which has a major push for new housing in the city center, specifically in the former market square arena area. The city also is considering expanding the convention center and building a new football stadium for the Indianapolis Colts. “All of these factors would benefit and support new retail activity in a submarket that has proven very viable for retail,” Martin says.

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