Circle Centre nears deals for Burger Palace, Yard House, LA Fitness

January 3, 2014

Three national restaurant chains and a health club franchise are nearing deals to take the ground-level space at Circle Centre left vacant by former anchor tenant Nordstrom.

Local retail brokers say Bobby’s Burger Palace, a restaurant chain developed by celebrity chef Bobby Flay, along with beer-focused Yard House and Bonefish Grill are the eateries in discussions with mall manager Simon Property Group Inc. to occupy the first floor of the former store at Meridian and Georgia streets.

In addition, LA Fitness would take space on the first and second levels at the south end of the space.

Landing the national chains would be a major boon for both downtown and the publicly traded Simon, which has been unable to lure any retail tenants to the 210,000-square-foot space since Nordstrom left the mall in July 2011.

“The additions would be very positive for downtown,” said Jacqueline Haynes, a retail broker and vice president at Cassidy Turley. “Filling that space is huge.”

The Bobby Flay burger chain has 17 locations in 10 states, mostly in the east. The closest restaurant in the chain to Indianapolis is at the Horseshoe Casino in Cincinnati. Its menu consists of 10 different burgers, along with sandwiches and salads.

Orlando-based Yard House is a Darden Restaurants Inc. concept with 48 locations in 17 states, with the closest to Indianapolis being in Cincinnati.

Yard House portrays itself as an “upscale casual eatery” and is widely known for its vast array of beers on tap—up to 250 imported, craft and specialty ales and lagers.

Bonefish Grill, operated by Tampa-based Bloomin’ Brands, has 200 locations in 34 states, including one on East 82nd Street in Indianapolis and on North State Road 135 in Greenwood. Bloomin’ Brands also operates Outback, Carrabba's and Cheeseburger in Paradise.

Filling certain downtown retail space has been difficult as more space has hit the market with the completion of several mixed-used projects with apartments above first-floor retail.

Downtown’s retail vacancy rate of 15 percent in the third quarter was highest among all submarkets in the metropolitan area. Lafayette Square and Washington Square weren't far behind, with rates above 12 percent, according to data from Cassidy Turley.

Net absorption downtown during the third quarter was relatively flat at nearly 5,000 square feet, and the amount of vacant square footage stood at roughly 426,000 square feet. About half of that is the Circle Centre mall vacancy. About 100,000 square feet will fall out of the calculations when the Indianapolis Star takes part of two floors as office space.

Without getting specific, Simon spokesman Les Morris said there’s a lot of interest in the former Nordstrom space.

“It’s obviously a great location right in the heart of downtown,” he said. “With the Star employees coming, there will be a significant amount of daytime traffic as well. All of that is attractive to prospective tenants.”

The Star will move to its space in the mall later this year following the sale of its headquarters property at 307 N. Pennsylvania St. to TWG Development LLC. The developer’s plans call for 425 apartments in three separate buildings, including 280 in the Star’s 190,000-square-foot headquarters. Work on the first phase at the corner of East New York and Delaware streets should begin later this month.    

TWG bought the Star property for $11.25 million, said Dennis Dye, a TWG principal. The firm paid $8 million to close on the first part of the sale and will close on the rest of the property by April, Dye said.

Meanwhile, the three restaurants that could occupy the ground level at Circle Centre are expected to bring a renewed vibrancy to the area.

That there’s interest from such established restaurants reinforces downtown's strength with travelers, Haynes at Cassidy Turley said.

“We are such a visitor-based downtown,” she said, “Those tenants are going to be very recognizable.”

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