Apartments and Residential Real Estate and IUPUI and Real Estate & Retail

High-rise in works near canal

November 12, 2007

A strong demand for student housing downtown is driving a $40 million plan for a high-rise apartment tower a couple of blocks east of the Central Canal.

The developer, a partnership of Fishers-based Paramount Realty Group and Indianapolis-based Alboher Development Co. Inc., hopes to build the 16-story Paramount Tower on a OneAmerica parking lot. It has agreed to buy the 2.3-acre lot east of Capitol Avenue between Michigan and North streets, for an undisclosed price.

Plans call for 200 rental units, with a total of 550 beds, along with first-floor retail, said Stephen Shea, president of Paramount Realty Group. The tower would face Capitol Avenue and parking would be behind the tower on a surface lot with access on North Street. A Safeco parking garage occupies the eastern portion of the block.

Apartment occupancy rates have hovered around 99 percent in the vicinity of the IUPUI campus. And a 3-year-old on-campus apartment complex already is full.

The partnership isn't the only group hoping to capitalize on a hot market for apartments downtown. One block west of the Paramount Tower site, a $33 million apartment project is about to break ground. That project, Cosmopolitan on the Canal, calls for 218 apartment units and 18,000 square feet of retail space. The developer is locally based Flaherty & Collins Properties.

"We think all development is good; it just builds momentum for downtown," said Jim Crossin, Flaherty's vice president of development. "The more housing we get downtown, the more retail we'll get, and that helps everybody."

The Cosmopolitan project won't be aimed at students in particular, but Flaherty has considered its own student-focused housing project.

IUPUI has on-campus residential space for only about 1,100 of its 30,000 students, but many more live nearby or would if more options were available, said Karen Whitney, IUPUI's dean of students and vice chancellor for student life.

"The downtown area is very desirable for our students," Whitney said. "What I hear from students is, 'I wish I [could] find housing closer to campus.' They want to be where the action is."

In 2004, the campus added about 700 beds of on-campus housing and is working on plans for another 1,000. Those plans will be finalized in 2008, Whitney said.

The long-term goal for IUPUI is to provide on-campus housing for 10 percent of the student population, which leaves plenty of opportunity for private developers to fill the gap. Whitney likes the Paramount proposal, the first such project she has seen.

"It looks very promising," she said. "I think quality, affordable housing in the downtown area is a beautiful thing."

There's plenty of demand to fill 200 new apartments as long as the pricing is realistic--which could be a challenge considering the added cost of high-rise construction, said George Tikijian, owner of the locally based apartment brokerage Tikijian Associates.

The newest on-campus apartments go for $845 for a one-bedroom and $735 for a private room in a two-bedroom. The nearby Lockfield Gardens apartments rent for $620 to $720 for a one-bedroom, while two-bedrooms range from $700 to $900.

Paramount's prices aren't final, but they should be in the range of the on-campus project, Shea said. A flat rate would cover rent, utilities and use of an exercise facility.

The developers hope to start construction next spring and open in time for 2009's fall semester, Shea said. Plans call for two-, three- and four-bedroom units, furnished with furniture from Indianapolis-based University Loft Co.

The building will have a limestone face that looks similar to downtown's Conrad Indianapolis hotel, Shea said. The architect is locally based Browning Day Mullins Dierdorf.

No rendering was available at press time, in part because the site of the project changed in recent weeks. The developers had been working on plans to build the tower at 700 N. Illinois St. But they jumped at the opportunity to build closer to campus.

Shea, a former executive at Simon Property Group Inc., has developed more than a dozen Barnes & Noble-anchored shopping centers and, most recently, a 120-acre mixed-use project called Gateway Crossing in McCordsville.

His partner, Mike Alboher, is a locally based retail broker and developer. Alboher told IBJ he is working with Shea to develop student housing downtown, but said none of the details has been finalized.

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