A prominent 11-acre site near I-465 and U.S. 31 in Carmel is now on the market for $16.7 million, a price that equates to around $1.5 million an acre.
Listing agent Michael B. Drew of Colliers Turley Martin Tucker said the prime piece of property near the intersection of 96th Street and U.S. 31 could stand out to developers even in a sluggish economy.
“The interesting part of development is sometimes you have to start a development when it is a down time,” he said. “By the time you come out of the ground, it is a good time. Developers plan a long time in advance.”
Yet, local brokers say the high asking price is nearly unheard of for the area, where similar land routinely sells for a third of that amount.
Ross Reller of Meridian Real Estate scoffed at the asking price for the parcel, which is owned by a corporation controlled by the Valinet family.
“I can assure you there is no scenario where the land is worth more than $500,000 an acre in a normal, healthy functioning market,” which we are not in right now, he said.
He said Valinet may be posturing in order to get a high price for whatever land the Indiana Department of Transportation needs for its planned expansion of U.S. 31.
“Clearly, what Valinet and his broker are trying to do is establish an extremely high benchmark that INDOT has to disprove,” Reller said.
The Federal Highway Administration approved the expansion project Feb. 11, which now paves the way for INDOT to begin acquiring land and designing the project. Construction on the road project is expected to begin in 2011.
Drew said the state has discussed using between 2 and 5.5 acres of the Valinet land in the past, although nothing’s been finalized.
He rejected the notion that the Valinet family set a high price to win a better deal from the state, saying the figure is justified given the property’s visibility and ease of access to I-465.
“It goes back to location, location, location,” he said. “We think it’s the best suburban location in Indianapolis; it’s great visibility and good access.”
Some real estate insiders suggested that Duke Realty Corp. might snap up the site, given its proximity to Duke’s nearby office complexes. But Duke spokesman Joel Reuter said that’s not true.
“We’re more actively selling property than we are buying ground,” he said. “From what I understand, we’re not actively looking to purchase it.”
The property went up for sale in the summer of 2008, although Drew said he couldn’t recall the exact date. It has been on and off the market in the past, most recently in 2007.
A variety of local, regional and national developers have expressed interest in the land, Drew said. It is zoned B-5, which allows for office and light commercial projects.
Steve Delaney, a principal with Sitehawk Real Estate, said the site would need to be built as a mixed used development combining ground-level retail with high rise office or hotel space and an underground parking garage.
That way, a developer could maximize the square footage to justify the $16.7 million price tag, he said.
“That’s extremely high, especially for 11 acres,” he said of the price. “You’d have to get real creative, I think.”