The apartment market is starting to cool off in Carmel, which has added hundreds of units over the past few years.
According to an apartment market report by Indianapolis-based apartment brokerage firm Tikijian Associates, average apartment rents in the Carmel/Westfield/Zionsville market dropped by 2.8 percent in 2017.
Taking into account all sizes of apartments, from studios up to four-bedroom units, average rent in Carmel/Westfield/Zionsville was $1,073 last year, compared with $1,104 in 2016 and $1,013 in 2015.
In comparison: the average rental rate for downtown Indianapolis apartments rose 2 percent in 2017. Downtown rents averaged $1,131 last year, compared with $1,109 in 2016 and $1,082 in 2015.
Average rent in the entire Indianapolis metro area rose 1.9 percent last year, to $821. The metro area encompasses Marion and adjoining counties, including the cities of Noblesville, Greenfield, Greenwood, Brownsburg and Lebanon.
Carmel in particular has seen a lot of apartment development recently, and that has played a significant role in shrinking rents.
“The market’s softened a little bit because there are just a lot of projects coming on line,” said George Tikijian, senior managing director at Tikijian Associates. “It’s going to be a couple more years before Carmel absorbs all of these new properties.”
Tikijian’s report lists 10 separate Carmel apartment projects that are either under construction, planned or recently completed. The list includes two projects that saw construction starts in 2017: The Proscenium, an Anderson Birkla development in Carmel’s City Center; and Midtown Carmel, an Old Town Development project along the Monon Trail north of Main Street. Each of these projects will add more than 200 housing units as part of mixed-use developments.
Another residential phase of the Midtown project, to be called Midtown West and developed by Barrett & Stokely, is expected to begin construction this year, Tikijian’s report says.
Not included in Tikijian’s report is The Corner, a planned Kite Realty Group Trust project at the southwest corner of Rangeline Road and 116th Street.
That corner formerly housed a partially vacant shopping plaza, and Kite has been eying redevelopment of the site for several years. In 2016, Carmel rezoned the property in order to allow Kite to add housing there. The project plan that Carmel officials approved included 26,500 square feet of retail space and 298 apartments.
Kite declined to talk with IBJ about the project, but in recent public filings the company said it still plans to create a mixed-use retail and multifamily development at The Corner. The development would cost between $15 million and $20 million.
Tikijian said he didn’t include The Corner in his report because the project was announced so long ago and he was unsure of its current status.
But the old shopping plaza has been demolished in recent weeks, and Carmel city officials say they are waiting for Kite to file final plans and drawings for the project.