Real estate deals picking up around Fashion Mall

The owners of the Sheraton Indianapolis are converting the hotel’s south tower into luxury apartments.

The restaurant Ocean Prime is poised to anchor a redeveloped office building in front of The Fashion Mall at Keystone.

Several developers are vying to replace the vacant Woodfield Centre, and two of the last undeveloped parcels in the area are finally up for sale.

Of course, that’s on top of Simon Property Group’s plans to renovate the Fashion Mall, and Kite Realty Group’s addition of Nordstrom Rack and Container Store to Rivers Edge.

f you’re talking about big deals and new development in Indianapolis, chances are you’re talking about Keystone at the Crossing.

“The area is bulletproof,” said Cassidy Turley retail specialist Bill French. “It’s been a true powerhouse for 20 years.”

Undeveloped parcels hit market for first time in years

The owner of two of the last remaining undeveloped tracts of land in the Keystone at the Crossing trade area has put the properties up for sale with a total asking price of nearly $11 million.

John Tyner, whose family has owned land in the area for generations, is offering about 14 acres at the northeast corner of Interstate 465 and Keystone Avenue for $5.9 million, and 20 acres along East 96th Street across the street from the headquarters of electronics chain HHGregg for $5 million.

(IBJ Photo/ Perry Reichanadter)

The land off Keystone has “unmatched visibility” from I-465 and would be ideal for a hotel or an amusement center that could tie into the adjacent Woodland Bowl, said Michael P. Sloan, a broker with locally based The Broadbent Co. who is marketing the properties.

The most likely user for the parcel along 96th Street, where Tyner has a small home, is a car dealership, Sloan said. There are more than a dozen car dealerships along 96th Street on either side of Keystone Avenue.

Abbe Hohmann, a vice president and principal at Cassidy Turley, cannot recall the properties being offered for sale in more than a decade, though Tyner likely has had multiple opportunities to sell them over the years. (Tyner could not be reached.)

Hohmann figures the price on the 96th Street parcel is reasonable given the traffic and easy access, though there are few users that would take so much space.

Nailing down a buyer for the parcel with frontage on I-465 could be a bit tougher, since the flag-shaped site is accessible only via a narrow strip of land that juts out to 96th Street and the price seems a bit high, Hohmann said.

She could see a limited-service hotel there or a hospital group interested in a satellite campus. One advantage of the I-465 site: The Marion County address could offer flexible zoning options compared with the parcel north on 96th Street, which sits in Hamilton County.

(IBJ Photo/ Perry Reichanadter)

New users eye vacant Woodfield Centre

Five developers, including both local and national players, are pitching proposals to redevelop the vacant Woodfield Centre retail strip at the southwest corner of 86th Street and Keystone Avenue, said Scot A. Courtney, director of retail services for the local office of Lee & Associates.

The owner of the sagging retail center, Jacksonville, Fla.-based Everbank, first offered the 6.4-acre parcel for sale back in 2008, with an asking price of $6.75 million. That was about three times what market players were willing to pay, so the bank opted to wait.

Now, Courtney is marketing the property again, with an asking price of $5.5 million. He said the interest level is much stronger now.

A site plan prepared by Lee & Associates and shared with potential buyers at the International Council of Shopping Centers convention in Las Vegas last month suggests an eight-story hotel at the southern end of the site and about 40,000 square feet of shop and restaurant space for the portion along 86th Street.

Another possible use for the southern portion of the property is apartments.

“You can’t replicate the real estate,” Courtney said. “It’s not the Fashion Mall, but it’s as close as you can get.”

The bank took control of the property after a default by Premier Properties, which had planned to transform the aging center and adjacent properties into a $750 million retail, residential, office and hotel juggernaut called Venu.

(IBJ Photo/ Perry Reichanadter)

Apartment conversion planned for hotel tower

The owner of the Sheraton Indianapolis Hotel & Suites at Keystone at the Crossing is investing $8.2 million to convert the hotel’s 12-story, all-suites tower into luxury apartments.

The plans call for 102 one-bedroom apartment units and 27 two-bedroom units to replace 160 hotel rooms on the third through 12th floors of the south tower, next door to The Fashion Mall at Keystone. Apartment residents will have access to the mall and movie theater via a second-floor skywalk. A lobby and meeting rooms on the first two floors would remain part of the hotel.

The hotel owner, an affiliate of Bethesda, Md.-based Host Hotels & Resorts Inc., will own the apartments, while locally based Flaherty & Collins Properties is building the project and will manage the units. Flaherty & Collins officials declined to discuss the project.

The apartments would not be affiliated with the Sheraton, which is managed by Starwood Hotels & Resorts. The hotel had been the city’s fourth-largest, with 560 guest rooms, behind only the JW Marriott Indianapolis, Indianapolis Marriott Downtown and Westin Indianapolis.

Construction is under way on the 118,000-square-foot project and the first units are scheduled for delivery by fall, with completion by early 2012. The project follows a $17 million renovation of the hotel and lobby.

The conversion of a hotel into apartments is rare, particularly for such a well-located property, said George Tikijian, principal at apartment brokerage firm Tikijian Associates.

Though Tikijian was surprised the hotel’s owners would part with the rooms, he said they could make sense as corporate apartments because of their proximity to more than 2.5 million square feet of office space at Keystone at the Crossing and The Precedent Office Park. He also noted that the nearby 300-unit River Crossing apartments have done well.

High-end restaurant eyed as anchor for $12M project

An upscale restaurant chain called Ocean Prime is closing in on a deal to take more than 8,000 square feet in the $12 million redevelopment of a four-story office building and five acres of parking adjacent to The Fashion Mall at Keystone.

The seafood and steak chain, part of Columbus, Ohio-based Cameron Mitchell Restaurants, hopes to close on the deal within the next few weeks for its first location in Indiana, said Keith Rogers, restaurant development adviser for the privately held chain.

(IBJ Photo/ Perry Reichanadter)

Locally based PK Partners is renovating the first two floors of the 1980s office building at 8555 N. River Road into retail and restaurant space, and adding two stand-alone buildings, including a 5,200-square-foot Distinctive Diamonds store along East 86th Street.

PK Partners President Phil Larman told IBJ for a story in May that an upscale restaurant tenant was looking at the first-floor space, but he did not respond to requests to confirm the tenant is Ocean Prime.

The chain operates eight locations in six states, including Michigan and Ohio, with a ninth scheduled to open in Atlanta in the fall.

Appetizers at the “modern American supper club” include white truffle caviar deviled eggs and colossal shrimp sauté with Tabasco cream sauce, and main courses include ginger salmon with soy butter sauce and Chilean sea bass with champagne truffle sauce.

Cameron Mitchell also owns the Rusty Bucket Restaurant & Tavern chain, which has a restaurant at West 86th Street and Ditch Road.

Cameron Mitchell owned the Mitchell’s Fish Market concept, which has a location in Carmel at Clay Terrace, before it sold the chain in 2008 to the parent of Ruth’s Chris Steak House.•