Broad Ripple Market Feasibility - Indianapolis Public Schools - DRAFT 5/7/19
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DRAFT 5/7/19 Broad Ripple Market Feasibility Indianapolis Public Schools DRAFT MAY 7, 2019
DRAFT 5/7/19 00 Executive Summary / Overview 01 Demographics 02 Residential 03 Office 04 Retail 05 Conclusions
DRAFT 5/7/19
PURPOSE OF STUDY
00 Executive THE SITE
Summary / NEIGHBORHOOD CONTEXT
Overview MARKET FINDINGS
DRAFT 5/7/19
00 OVERVIEW – PURPOSE OF MARKET STUDY
A study designed to uncover the real estate market potential of the IPS Broad Ripple site
The purpose of the study is to identify the market-feasible mix of uses
and strategy for redeveloping the IPS Broad Ripple site. Analysis steps
to uncover the potential include:
▪ Assessment of site attributes in terms of access, visibility and
unique local market context
▪ Data-driven assessment of both the supply and demand sides of
the market for residential, retail, commercial and professional
office uses
▪ Interviews with public officials, developers, brokers, economic
development staff and real estate professionals active in the local
market
▪ Presentation at a community meeting to synthesize market and
community goals
SB Friedman Development Advisors 4
DRAFT 5/7/19
00 OVERVIEW – THE SITE
The 16-acre redevelopment site is in the Broad Ripple neighborhood
The former Broad Ripple High School is a 375,000-square-foot
(SF) building on a 16-acre property.
16 BRHS TIMELINE
acres 1923 BRHS became a part of the Indianapolis Public Schools
1976 The Center for Performing Arts was created
1995 Peak enrollment of approximately 2,500 students
2018 BRHS closed with less than 500 students
2019 Site considered for redevelopment
Image Source: Google Earth, SB Friedman
SB Friedman Development Advisors 5
DRAFT 5/7/19
00 OVERVIEW – NEIGHBORHOOD CONTEXT
New Red Line BRT will greatly enhance Broad Ripple’s regional connectivity to employers and cultural institutions in the region
Indianapolis Context ▪ Neighborhood characteristics
▪ A designated cultural district
▪ Six miles from downtown
▪ 5,000 residents
▪ While there is no adjacent interstate access, College Avenue is a primary north-
south arterial that connects Broad Ripple to downtown
BROAD RIPPLE ▪ The Red Line, a new Bus Rapid Transit (BRT) Line that is planned to open in
2019, will run from Broad Ripple south through downtown Indianapolis to the
COLLEGE AVENUE
University of Indianapolis. The route is within a quarter mile or more than
BROAD RIPPLE 50,000 residents and nearly 150,000 jobs.
HIGH SCHOOL
DOWNTOWN
Source: SB Friedman
SB Friedman Development Advisors 6
DRAFT 5/7/19
00 OVERVIEW – ESTABLISHED COMMERCIAL HUB
Broad Ripple Avenue and Keystone Avenue are major existing retail corridors
Broad Ripple Avenue is the key commercial corridor in the neighborhood,
primarily comprised of smaller scale walkable retail and office tenants. Larger
scale big-box retail and office buildings exist on the periphery of the
neighborhood, in areas such as Glendale Town Center and Glenlake Plaza.
71ST STREET
GLENLAKE PLAZA
GLENDALE TOWN CENTER DOWNTOWN BROAD RIPPLE
DOWNTOWN
BROAD RIPPLE
BROAD RIPPLE AVE
GLENDALE TOWN
BROAD RIPPLE CENTER
HIGH SCHOOL KESSLER BLVD.
KEYSTONE AVE
COLLEGE AVE
RETAIL
OFFICE
52nd STREET
Source: Indianapolis, SB Friedman
SB Friedman Development Advisors 7
DRAFT 5/7/19
00 OVERVIEW – ADJACENT OPEN SPACE AMENITIES
Broad Ripple is known for open space amenities including the Monon Trail and White River
BROAD RIPPLE PARK
Broad Ripple is surrounded by key
natural spaces, including Broad
Ripple Park, White River and
Monon Trail. Both Broad Ripple
71ST STREET
Park and White River are currently
undergoing major planning
initiatives. There are also plans for a
Broad Ripple Village Riverwalk
MONON TRAIL
Promenade connecting the existing
Monon Trail to Broad Ripple Park,
BROAD passing in front of the site. Once
RIPPLE PARK completed these improvements
would further enhance the
BROAD RIPPLE AVE
desirability of the BRHS site.
BROAD RIPPLE
HIGH SCHOOL KESSLER BLVD.
WHITE RIVER
COLLEGE AVE
KEYSTONE AVE
MONON TRAIL
52nd STREET
Source: Indianapolis Open Data, SB Friedman
SB Friedman Development Advisors Image Source: CoStar 8
DRAFT 5/7/19
00 OVERVIEW – SITE OPPORTUNITIES AND CHALLENGES
While challenges exist, the site is an attractive real estate redevelopment opportunity
Red Line BRT (opening 2019)
▪ Site opportunities
Broad Ripple Cultural District
▪ Broad Ripple is a strong real estate market with an existing active
retail/commercial hub and multiple mixed-use developments proposed
or under construction
Monon Trail
▪ There are very few development sites available in the Broad Ripple area
of the scale and size of the BRHS site
▪ Frontage along White River makes it a waterfront development
Compton Street
opportunity
▪ The Red Line BRT, which will stop at Broad Ripple Avenue (four blocks
from the site), will significantly enhance connectivity of the site to jobs
and cultural institutions in the City
▪ Frontage on Broad Ripple Avenue and proximity to commercial, cultural
and recreational assets make the site an attractive redevelopment
opportunity
▪ Site challenges
▪ New development would require additional internal infrastructure to
break up the current ‘superblock’ layout
▪ Reuse of the building “as-is” is complicated by the large size and varying
levels between building parts/additions that were developed over time
since the original portion of the building was constructed in 1925
▪ Redevelopment would carry the financial burden of demolition for the
entire or significant portions of the building
▪ Existing residential adjacencies require thoughtful redevelopment to
minimize land use conflicts
Image Source: Google Earth; SB Friedman
SB Friedman Development Advisors 9
DRAFT 5/7/19
MARKET FINDINGS
Demand exists for office, retail and residential development on the IPS site, exceeding site capacity
Overall, the IPS site is a highly attractive opportunity in the market for multiple land uses. The size and scale of the 16-acre IPS site
necessitates a redevelopment with multiple land uses. The uses below represent a menu of private development options which
have market potential for development on the IPS site and may be mixed with educational and community uses. The final mix of
uses and specific development program for the IPS site will depend on specific requirements of a competitive bid process; along
with site considerations, rezoning approvals and preleasing opportunities.
80,000 SF 30,000 SF 450-570 UNITS 35-70 UNITS 175-210 UNITS
OFFICE RETAIL MULTI-FAMILY RENTAL CONDOMINIUMS TOWNHOMES/DETACHED
Potential Medium potential High potential High potential Medium potential High potential
Pre-lease 40-50% 40-50% NA 50% As-built
requirement
Key impact Increase in daytime Continued corridor Increase in evening population Increase in affordable for- Allows for contiguity with existing
population growth along Broad sale alternative to land uses adjacent to the south end
Ripple Avenue townhomes of the site
SB Friedman Development Advisors 10DRAFT 5/7/19
POPULATION PROJECTIONS
01 DEMOGRAPHICS MEDIAN HOUSEHOLD INCOME
BUILDING TENUREDRAFT 5/7/19
01 DEMOGRAPHICS – ADULT POPULATION PROJECTIONS
Marion County is projected to see an increase in 21,000 adults
Adult Population Change in Marion County
Seniors
Population change projections for Marion County are prepared by
Seniors 47,863 8,679 Stats Indiana. There are several key observations:
75+
75+
• The largest cohort within the adult population in Marion County
Empty
Empty Nesters
Nesters &
& Young is Young Adults
Young
SeniorsSeniors 189,743 7,097
55-74 55-74
• Working Adults and Seniors are the two fastest growing age
categories
Working
WorkingAdults
Adults
237,337 8,608
35-54
35-54 • The largest age group, Young Adults, is anticipated to see a
slight decline in population over the next five years
YoungAdults
Young Adults
281,293 -3,766
15-34
15-34
0 100,000 200,000 300,000 400,000
2019 2020 - 2025
Source: Stats Indiana
SB Friedman Development Advisors 12DRAFT 5/7/19
01 DEMOGRAPHICS – MEDIAN HOUSEHOLD INCOME
The highest income areas in Indianapolis outside of downtown are to the north and northeast
The median household income of Broad Ripple census block groups range
Median Household Income by Block Group
from $55,000-$82,000. The residents wealth is on par with other higher-
income neighborhoods such as downtown, Meridian Kessler and Allisonville.
BROAD RIPPLE INCOME BY NEIGHBORHOOD
4,000
3,500
3,000
ALLISONVILLE/DEVONSHIRE
2,500
HOUSEHOLDS
2,000
1,500
MERIDIAN KESSLER
1,000
500
DOWNTOWN
0
Downtown Meridian Kessler Broad Ripple Allisonville
< $35,000 $35,000-75,000 > $75,000
2018 Median Household Income
Source: ESRI Business Analyst, SB Friedman
Source: ESRI, SB Friedman
SB Friedman Development Advisors 13DRAFT 5/7/19
01 DEMOGRAPHICS – BROAD RIPPLE NEIGHBORHOOD PROFILE
Broad Ripple is a relatively affluent, urban, vibrant neighborhood on the northside of the City
Broad Ripple predominately consists of low-density residential, although it is
comparatively more dense than surrounding neighborhoods. There are
pockets of higher-density residential near Broad Ripple Avenue. According to
Census data, 55% of household units are owner-occupied and the average
median income is $66,000.
71ST STREET
5,148 People
BROAD RIPPLE AVE
RESIDENTIAL UNITS
PER
$
ACRE Units per Acre
Residential
$66,000 Median Income
2,629 Households
0-2
BROAD RIPPLE
2
HIGH SCHOOL KESSLER BLVD.
3
4
5
55% Owner occupied units
COLLEGE AVE
6
KEYSTONE AVE
7-9
Source: City if Indianapolis, SB Friedman
9-15
15-27
7,000 Jobs
> 27
52nd STREET Source: ESRI, SB Friedman
SB Friedman Development Advisors 14DRAFT 5/7/19
RECENT DEVELOPMENT
PIPELINE DEVELOPMENT
02 RESIDENTIAL
BROAD RIPPLE HOUSING SUPPLY
DEMAND PROJECTIONSDRAFT 5/7/19
02 RESIDENTIAL – HOUSING PERMITS (MARION COUNTY)
Housing permits for multi-family housing are nearing pre-recession levels
HOUSING PERMITS BY YEAR [1]
Pre-Recession Annual Average Post-Recession Annual Average
6,000
3,480 1,331 709 674
THE GREAT RECESSION
5,118
SFH UNITS MFH UNITS SFH UNITS MFH UNITS
5,000
4,169 4,268
3,874
4,000
3,211 3,216
3,000
2,285
2,124
2,000 1,772 1,698
1,517
1,264 1,310 1,258
9651,054 1,033 1,068 1,014
1,000 746 803 820
654 709 616 723 521 607 544 643 671 713 554 645
454
91
-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Single Family Multi-Family
[1] Excludes condo permits
Source: Builders Association of Greater Indianapolis, CoStar, SB Friedman
SB Friedman Development Advisors 16DRAFT 5/7/19
02 RESIDENTIAL – REGIONAL COMPETITIVE RENTAL MARKETS
Broad Ripple is one of the only neighborhoods outside of downtown to attract significant new rental apartment development
Key Neighborhoods for New Residential Construction (Built Since 2010) New residential rental construction in the Indianapolis area has concentrated in
five primary neighborhoods: Broad Ripple, Mass Ave, Downtown, Fountain
Square and Keystone at the Crossing. Citywide, the vast majority of new multi-
family development has been rental apartments - there have been nearly 8,000
new rental units built since 2010. Nearly half of those units were built downtown.
Apartment rents in Broad Ripple are approximately 15% lower than downtown
and range from 5-10% lower than other downtown adjacent neighborhoods.
Variation in land acquisition prices and level of finishes account for much of the
differences.
RENTAL HOUSING DELIVERED SINCE 2010
NEW UNITS 3,500 700 515 370 320
Number of AVG. RENT $1.80 $1.60 $1.65 $1.55 $1.70
Units / Project
KEYSTONE BROAD FOUNTAIN
1-50 CLUSTER DOWNTOWN MASS AVE
M
51-100
CROSSING RIPPLE SQUARE
MOST CONSTRUCTION LEAST
101-200
> 201 All other neighborhoods: 2,435 units, 15 projects
[1] Reflects projects that are still in lease-up
[2] Units built since 2010
Source: CoStar
SB Friedman Development Advisors 17DRAFT 5/7/19
02 RESIDENTIAL – PIPELINE APARTMENT DEVELOPMENTS
Projects currently under construction indicate further concentration of developments in competitive neighborhoods
Key Neighborhoods for Prospective Residential Development
Broad Ripple has three multi-family projects currently proposed/under
construction. The popular downtown neighborhoods Mass Ave and Fountain
Square have six and three projects respectively under construction or
proposed. Downtown currently has the largest share of pipeline residential
units.
RENTAL HOUSING IN THE PIPELINE
UNITS
PROPOSED 1,335 0 595 170 345
PROJECTS
PROPOSED
7 0 6 3 3
Number of
Units / Project KEYSTONE BROAD FOUNTAIN
CLUSTER DOWNTOWN MASS AVE
1-50
CROSSING RIPPLE SQUARE
M
51-100 Other Neighborhoods: 775 units, 6 projects (0 at Keystone)
101-200
> 201
Source: CoStar
SB Friedman Development Advisors 18DRAFT 5/7/19
02 RESIDENTIAL – NEW BROAD RIPPLE CONSTRUCTION
New residential construction in Broad Ripple has concentrated near open space amenities and Broad Ripple Avenue
New Rental Projects in Broad Ripple
Delivery Schedule
400
369
units built since 2015
units under construction
172
350
300
BROAD RIPPLE
PARK 250
200
150
IPS BROAD
RIPPLE SITE 100
MONON TRAIL
50
0
2015 2016 2017 2018 2019 2020 2021 2022
Source: CoStar, Interviews, SB Friedman
SB Friedman Development Advisors 19DRAFT 5/7/19
02 RESIDENTIAL – NEW BROAD RIPPLE CONSTRUCTION
There have been four rental housing projects delivered in Broad Ripple since 2010
Recent Deliveries
River House Broad Ripple – 86 Units
Park 66 Flats – 105 Units
Park
66
Flats
The Line
Urban The Coil – 151 Units
The Win – 24 Units
Flats BROAD RIPPLE
River House PARK
The
Broad Ripple
Coil
Ripple
The Win
IPS BROAD Recent deliveries include Park 66 Flats, River House Broad
RIPPLE SITE Ripple, The Coil and The Win. Projects vary in typology,
MONON TRAIL
but have included rental-townhomes, mixed-use
residential and single-use residential. All new
developments have included or plan to include structured
parking. There have been no recent condo or owner-
occupied townhome developments in Broad Ripple.
Source: CoStar, Interviews, SB Friedman
SB Friedman Development Advisors 20DRAFT 5/7/19
02 RESIDENTIAL – RECENT DELIVERIES
Competition among recent apartment projects in Broad Ripple required rent concessions to achieve stabilized occupancy
The market has nearly absorbed the influx of recent residential deliveries. Rents of new
Park 66 Flats
construction range from $1.40-$1.67 per SF, which is lower than new projects in downtown or
▪ 108 units
downtown adjacent neighborhoods. Developers and brokers indicated modest concessions ▪ $1.60/SF
(0.6% annually) were made to help the properties stabilize, but that higher rents may be ▪ 36.1% vacancy
achievable in future years.
RECENT BROAD RIPPLE DELIVERIES OF 3 RESIDENTIAL PROJECTS
$2.00 100% The Coil ▪ 151 units
Park 66 Flats Opens
The Coil Opens
The Win Opens
▪ Ground floor retail –
$1.90 90%
Fresh Thyme
$1.80 80% ▪ $1.67/SF
▪ 8% vacancy
$1.70 70% ▪ Sold in 2018 for $41.0M
$1.60 60%
The Win ▪ 24 units, originally
$1.50 50%
intended to be
$1.40 40% townhomes
▪ $1.39/SF
$1.30 30% ▪ 8% vacancy
$1.20 20%
$1.10 10% River House Broad Ripple ▪ 86 units
▪ Asking rents $2.15/SF
$1.00 0%
2016 Q2 2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4
▪ Project in lease-up
Vacancy % The Win The Coil Park 66 Flats
Source: CoStar, SB Friedman
SB Friedman Development Advisors 21DRAFT 5/7/19
02 RESIDENTIAL – PIPELINE DEVELOPMENTS
There are over 170 units currently proposed or under construction in Broad Ripple
Proposed projects are similar in character to recent deliveries in Broad Ripple. Projects range from 10-150 units per development.
Under Construction (172 units)
The Line Urban Flats ▪ J.C. Hart development The Ripple ▪ Zinkan & Barker Development
▪ Built as a complementary project to Park 66 ▪ 36 units. 7,000 SF of retail
▪ 128 units ▪ Adjacent to former Weaver’s site
▪ Construction began January 2019
G-Bloc ▪ 8 loft units, above office
▪ Tom English Retail Real Estate
Source: Indianapolis Business Journal, CoStar, Interviews, SB Friedman
SB Friedman Development Advisors 22DRAFT 5/7/19
02 RESIDENTIAL – CONSTRUCTION IN COMPETITIVE CLUSTERS
Mass Ave and Fountain Square have experienced the most comparable new rental construction in the last few years
The newest residential construction outside of the Central Business District averages $1.67 per SF versus $1.55 in Broad Ripple. Projects generally have
the same characteristics as seen in Broad Ripple, between 50 and 200 units per project with structured parking and ground floor retail.
FOUNTAIN SQUARE MASS AVE
FORTE FOUNTAIN SQUARE PINNEX APARTMENTS SEVEN FORTY SEVEN PENROSE ON MASS
Address 1140 Shelby St 931 Fletcher Ave 747 N College Ave 500 Massachusetts Ave
SF 60,300 72,699 42,000 185,000 (~150,000 residential)
Units 64 77 36 236
Avg. Rent $1.76 $1.56 $1.96 $2.02
Parking Ratio 1.1 / unit NA 1.4 / unit 0.73 / unit
Year Built 2018 2017 2017 2018
Vacancy 17.2% (in lease-up) 10.40% 2.80% NA
Developed by Milhaus
Developed by Deylen Realty Developed by Milhaus Developed by J.C. Hart Company
Other Notes Highly amenitized (multi-purpose room, pet
Ground floor retail Parking included in rent Predominately 1 bedroom
washing station, pool, clubhouse, etc.)
Source: CoStar, SB Friedman
SB Friedman Development Advisors 23DRAFT 5/7/19
02 RESIDENTIAL – SENIOR HOUSING SUPPLY
There is limited existing market rate senior housing in Broad Ripple or Indianapolis
▪ Market rate senior housing is driven by
SENIOR HOUSING IN THE INDIANAPOLIS MARKET
seniors with the financial capacity to live in (units)
private senior housing, where there are
3,500
varying degrees of assistance and Broad Ripple
amenities available for residents. 3,000
2,500
▪ The fastest growing cohort in Indianapolis
is the 55-74 year old age cohort, projected 2,000
to increase by approximately 20,000
1,500
people from 2015 to 2025.
Downtown
1,000
▪ There is no existing senior housing in any
of the key competitive residential markets. 500
▪ Nursing care is the most dominant senior -
Pre 1959 1960-69 1970-79 1980-89 1990-99 2000-09 2010-18 Proposed
Independent Living
housing typology in the market, Assisted Living
independent living the least prevalent. Independent Living Assisted Living Nursing Care Nursing Care
▪ While there appears to be market potential for senior housing, development may be best served by a diverse mix of varied household
ages. Nursing and Assisted Living would not likely generate households that patronize local BR businesses. Independent living senior
householders could be part of a more mixed-age development that adds to the vitality of Broad Ripple Village.
Source: NICMAP 2018 Q3 Construction Report
SB Friedman Development Advisors 24DRAFT 5/7/19
02 RESIDENTIAL – CONDO & TOWNHOME MARKET
The average price for condo re-sales in 2018 was at a 10-year high of $150/SF, $225,000 per unit on average
▪ Since the Great Recession no new condominiums or owner-occupied Price per Square Ft
townhomes have been built in Broad Ripple < $140
$140-160
▪ Existing townhomes and condos are primarily located around the $161-180
$181-200
White River > $200
▪ Historic sales data indicates the count of attached housing resales and
the average price per square foot have increased annually since 2013
BROAD RIPPLE MARKET CONDO RESALES
100 $160
90 $140
80
$120
70
IPS BROAD
NUMBER OF SALES
SALE PRICE PER SF
60 $100
RIPPLE SITE
50 $80
40 $60
30
$40
20
10 $20
[1]
0 $0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Tucker Realtors
Sale Count Average $/SF [1] Data presented is a partial year, through September, 2018
SB Friedman Development Advisors 25DRAFT 5/7/19
02 RESIDENTIAL – CONDO & TOWNHOME MARKET
Pricing and absorption trends of existing product are getting stronger in key condo and townhome subdivisions in Broad Ripple
HISTORIC PRICE PER SF AND MARKET TIME
$210 140 Monon Row
$202 / SF
$190
120 $280,000 per unit
8 units sold
$170
Average days on market - 22
100
The Reserve at Broad Ripple
$150
DAYS ON THE MARKET
80 $161 / SF
SALE PRICE PER SF
$130
$221,000 per unit
18 units sold
60 Average days on market - 19
$110
40 College Court
$90
$199 / SF
20 $139,000 per unit
$70
9 units sold
Average days on market - 6
$50 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Average Days on Market Monon Row The Reserve at Broad Ripple College Court
Source: Tucker Realtors, SB Friedman
SB Friedman Development Advisors 26DRAFT 5/7/19
02 RESIDENTIAL – NEW CONSTRUCTION CONDO
Condos are an emerging product class appearing exclusively downtown and adjacent neighborhoods
According to brokers and developers, empty nesters and seniors are seeking out single-story flats in walkable neighborhoods to have
maintenance-free living. Condos also appeal to Millennials, as they can be a lower price starter home located in a walkable neighborhood with
commercial amenities.
Condos have historically been difficult to finance, which has resulted in new
condo developments occurring exclusively downtown. New condo Park 10
developments have typically been 50 units or less. Notwithstanding the East 10th & Broadway (Mass Ave)
financing challenges, condos are an emerging product class as home 56 flats - $199,000-$299,999
28 townhomes - $470,000+
ownership rates rise and the 55-74 age group expands. All flats sold out
Onyx + East
SEVEN2SEVEN 500 Park Residences
Illinois St (Mass Ave) Park & Michigan (Mass Ave)
6 flats - $350,000 + 7 flats - $400,000+
1,500 SF 1,250-3,000 SF
Project also included townhomes Project also included townhomes
2 BR, 2-car garage and single family
Onyx + East Chase Development LLC
Source: SB Friedman
SB Friedman Development Advisors 27DRAFT 5/7/19
02 RESIDENTIAL – PROJECTED HOUSEHOLD CHANGE
Marion County is projected to see an increase in nearly 11,000 households from 2018-2023
According to ESRI Business Analyst projections, Marion County is PROJECTED HOUSEHOLD CHANGE
expected to see a net increase of nearly 11,000 households in the 6,000
next five years. Projected household change is presented by age
and income bracket. Across all age groups except those 75+, the
number of households making under $35,000 annually is expected 4,000
to decrease.
The largest growth in households is projected for cohort ages 35-54 2,000
and 55-74 making $100,000-$149,000 annually, a combined increase
of nearly 7,000 households.
0DRAFT 5/7/19
02 RESIDENTIAL – HOUSEHOLD MOBILITY AND PRODUCT CHOICE
The rate households move annually decreases with age, while the likelihood to move to owner-occupied units increases with wealth
Approximately 25% of households under the age of 35 move annually, the majority of which are moving to renter-occupied housing. For age
groups above 35, the split between movers to renter-occupied units and movers to owner-occupied units is more even. However, as wealth
increases, people are less likely to move at all. As income increases, there is a higher likelihood the move is to owner-occupied housing.
ANNUAL MOBILITY – PERCENTAGE OF HOUSEHOLDS WHO MOVED BY AGE AND INCOME
UNDER 35 35-54 55-74 75+
50% 50.0% 50.0% 50.0%
40% 40.0% 40.0% 40.0%
ANNUAL MOBILITY
30% 30.0% 30.0% 30.0%
20% 20.0% 20.0% 20.0%
10% 10.0% 10.0% 10.0%
0% 0.0% 0.0% 0.0%
Source: PUMS analysis of Census American Community Survey 2012-2016 Data Householder that moved to owner-occupied Householder that moved to renter-occupied
SB Friedman Development Advisors 29DRAFT 5/7/19
02 RESIDENTIAL – HOMEOWNERSHIP TREND
Homeownership rates have declined since the Great Recession but are likely to stabilize or marginally increase in the future
HOMEOWNERSHIP TREND BY AGE In the last 10 years, homeownership rates have trended down for all
80% age groups except those householders 75+ years of age. However,
in the last five years, there has been a leveling off of
70% homeownership rate decline in 35-54 and 55-74 age group
categories and a marginal increase in owner-occupied households
60%
61.2% where the owner is 75+ years old. National trends show
53.6%
homeownership rates are gaining after reaching a 20-year low of
50% 54.8%
62.9% in 2016. This suggests a potential preference shift to for-sale
40% housing in the next 5-10 years.
In converting the projected household change to housing unit
30%
demand by tenure, SB Friedman adjusted the historic housing
20% preference data by age and income to account for an increasing
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 preference for home ownership in specific age cohorts. Specifically,
Under 35 35-54 55-74 75+ Overall Historic Projected we assumed that county-wide homeownership rates would increase
in the next five years for the Under 35 and 35-54 age cohorts.
Source: ACS 5-Year Estimates 2007-2017
SB Friedman Development Advisors 30DRAFT 5/7/19
02 RESIDENTIAL – DEMAND PROJECTIONS
Migration and housing preference Census data are used to generate the annual number of movers to new construction
388,000 HOUSEHOLDS IN MARION COUNTY
RENTAL DEMAND FOR-SALE DEMAND
45% RENT 175,000 213,000 55% OWN
27% MOVE ANNUALLY 47,000 14,000 6% MOVE ANNUALLY
3% CHOOSE NEW CONSTRUCTION [1] 1,500 950 7% CHOOSE NEW CONSTRUCTION [1]
6-7% BROAD RIPPLE CAPTURE [2] 110 40 3-4% BROAD RIPPLE CAPTURE
DEMAND THROUGH 2025 (x7) 770 280 DEMAND THROUGH 2025 (x7)
LESS PIPELINE UNITS -200 0 LESS PIPELINE UNITS
570 280
[1] Propensity to choose new construction based on historic mobility data, specific to housing type
[2] Capture rates based on percent capture of recent new construction in competitive markets
Source: Costar, PUMS analysis of Census American Community Survey 2012-2016 Data, SB Friedman
SB Friedman Development Advisors 31DRAFT 5/7/19
02 RESIDENTIAL – SUPPORTABLE MARKET METRICS
There is significant demand for rental units, condos, townhomes and detached residential product on the IPS Broad Ripple Site
450 - 570 units 35-70 units 175-210 units
RENTAL APARTMENTS CONDOMINIUMS TOWNHOMES/DETACHED
Phasing: Phase I/Immediate Future Phases Phase I/Immediate
Achievable Rents/Prices: $1.75 - $2.00 / SF $225 - $250 / SF $170 - $200 / SF
Supportable Units: 450-570 35-70 175-210
Parking Ratio: 1 : 1 unit 1 : 1.5 unit 1 : 1 bedroom
Source: SB Friedman
SB Friedman Development Advisors 32DRAFT 5/7/19
REGIONAL OFFICE SUPPLY
NEW PRODUCT
03 Office
BROAD RIPPLE OFFICE SUPPLY
OFFICE DEMAND PROJECTIONSDRAFT 5/7/19
03 OFFICE – REGIONAL CLASS A OFFICE
Class A office product is located downtown and in northern suburban submarkets along I-465
Class A office product in the Indianapolis Metropolitan Area is clustered in four locations:
Downtown, Keystone Crossing, Meridian Corridor and Carmel. Downtown Indianapolis Class
A office product has the highest gross rents in the region, which range from $21-$28 per
square foot.
Broad Ripple has not historically been a destination for Class A office.
CLASS A PRODUCT
NUMBER OF PROPERTIES 35 33 25 18
BT Class a office map here
SQUARE FEET (SF) 11.1 M 3.6 M 3.2 M 2.1 M
VACANCY RATE 9.1% 16.9% 11.8% 8.8%
RENT PER SF $21-28 $21-27 $21-25 $21-25
KEYSTONE MERIDIAN
CLUSTER DOWNTOWN CARMEL
CROSSING CORRIDOR
Other Neighborhoods: 85 buildings, 8,585,247 square feet
Source: CoStar, SB Friedman
SB Friedman Development Advisors 34DRAFT 5/7/19
03 OFFICE – OFFICE DELIVERIES SINCE 2008
New office developments are locating in established office clusters, but some singular developments have occurred elsewhere
Between 2008 and 2018, over 8 million square feet of new office product has delivered
in the Indianapolis market. Nearly 1.7 million square feet of office space was
constructed in 2008 alone, with products such as the INTECH Three campus (152,000
SF), Woodland expansion (119,000 SF) and Lake Pointe Center (150,000 SF).
225 8.3 M $27-31+ 6.6%
NEW DELIVERIES SF DELIVERED AVERAGE RENT PSF VACANCY RATE
OFFICE DELIVERIES IN INDIANAPOLIS REGION: 2008-2018
BT new office map here
2,000,000 12%
10.30%
10%
1,600,000
1.7M
7.40% 8%
VACANCY
7.00%
1,200,000
SF
6%
800,000 870k
4%
400,000
2%
0
177k 0%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: CoStar, SB Friedman RBA Vacancy Rate
SB Friedman Development Advisors 35DRAFT 5/7/19
03 OFFICE – BROAD RIPPLE OFFICE
New product has delivered in Broad Ripple, typically owner-occupied space under 10,000 SF
Recent Office Deliveries
Monon Pointe ▪ Mixed-use project
▪ Single tenant office
▪ 5,000 SF office
▪ Constructed 2014
6345 CARROLLTON ▪ Professional office building
▪ Multi-tenant office
▪ 5,000 SF
6345 CARROLLTON G-Bloc ▪ Constructed 1999, renovated
in 2012
MONON POINTE ▪ Professional office building
The Reliant
▪ 6,600 SF
▪ Constructed 2016
IPS BROAD
RIPPLE SITE
BROAD RIPPLE TOWER
MONON TRAIL
Proposed Office Products
THE RELIANT G-Bloc ▪ Mixed-use project
▪ 15,580 SF office
▪ Under construction
SB Friedman Development Advisors Source: CoStar, SB Friedman 36
Source: CoStar, SB FriedmanDRAFT 5/7/19
03 OFFICE - NATIONWIDE EMPLOYER LOCATION PREFERENCES
Employer preferences are shifting as businesses relocate to established urban and suburban areas
Employer Office Location Criteria
▪ Attract and retain talented workers
▪ Centralize operations
▪ Build brand identity and company culture
▪ Support creative collaboration
▪ Location near customers and business partners
Employer Office Location Preferences
CLEAN, SAFE, WALKABLE EAT/WORK/PLAY MULTIMODAL OPEN, FLEXIBLE,
STREETS NEIGHBORHOODS TRANSPORTATION OPTIONS INNOVATIVE, OFFICE SPACES
Source: Smart Growth America, Cushman & Wakefield, GWU Center for Real Estate and Urban Analytics
37
SB Friedman Development AdvisorsDRAFT 5/7/19
03 OFFICE - EMPLOYER LOCATION PREFERENCES
The IPS Broad Ripple site amenities align with employer location preferences
EAT/WORK/PLAY WALKABLE MULTIMODAL
NEIGHBORHOOD TRANSPORTATION
OPTIONS
A NEARBY RESTAURANTS & SHOPPING
C
5-MINUTE WALK 5-MINUTE DRIVE
20
RESTAURANTS
2.4M
RETAIL SF
A B
B NEARBY RECREATION
Proposed promenade would connect
White River, the Monon Trail, Broad
Ripple Park and other neighborhood
5-MINUTE WALK amenities with the site
C BUS RAPID TRANSIT-ACCESSIBLE
The nearby Red Line BRT will
BRT RED LINE
MONON TRAIL
strengthen multimodal connections
between Broad Ripple and downtown
SB Friedman Development Advisors 38DRAFT 5/7/19
03 OFFICE – REGIONAL OFFICE EMPLOYMENT
Approximately 26,000 jobs in key office sectors are projected to be added to the Indianapolis region by 2025
There were 317,885 office sector jobs in PROJECTED INDIANAPOLIS METRO AREA JOB GROWTH BY OFFICE SECTOR:
the Metro Indianapolis area in 2019. Over 2019-2025
40,000 office jobs were added between
Manufacturing 19,028 108
2006 and 2018, with an additional 26,000
jobs across the office sectors expected to Administrative 55,624 3,063
be added by 2025.
Education 23,031 830
Office sectors such as professional
services, healthcare, and FIRE (finance, Healthcare 58,454 11,034 TOTAL CHANGE
insurance, and real estate) have the
highest employment numbers in 2019 and
Management 14,969 627 26,000
are expected to have a large share of the Professional 63,758 7,541
growth by 2025.
Finance, Investment,
Real Estate 66,231 2,200
Information 16,791 569
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000
Administrative Jobs: 55,375 jobs in 2016, and an increase of 1,760 jobs by 202
Source: US Census Bureau, BLS, SB Friedman
SB Friedman Development Advisors 39DRAFT 5/7/19
03 OFFICE – BROAD RIPPLE OFFICE EMPLOYMENT
Broad Ripple’s office employment is primarily professional services and healthcare
BROAD RIPPLE OFFICE EMPLOYMENT: 2006-2015
The office employment in Broad Ripple has primarily
700
consisted of professional services and healthcare. Between
600 2006 and 2015, the professional services sector has grown
594
from 374 employees to 594 employees, while the
500
healthcare sector has seen a slight decrease to 364
400 employees in 2015 from 377 employees a decade earlier.
374 377 364
300 Other office employment sectors such as the information
234
sector (97 to 161 employees), FIRE sector (164 to 234
200
employees), and education sector (55 to 114 employees),
161 164
100
97 114 have also experienced limited growth.
55
0
Information Professional, Scientific, Educational Services Health Care and Social FIRE
Finance, Insurance,
and Technical Services Assistance Real Estate
2006 2015
[1] Management office sector showed fewer than 10 employees in Broad Ripple and therefore excluded.
Source: LEHD, SB Friedman
SB Friedman Development Advisors 40DRAFT 5/7/19
03 OFFICE – OFFICE DEMAND PROJECTIONS
SB Friedman projects demand for approximately 100,000 SF of office in Broad Ripple
SB Friedman converted the projected employment increase to office square
footage using historic vacancy and office employment density rates in the region, MARION COUNTY
adjusted over time. Based on employment projections in the Indianapolis 26,000 EMPLOYEE INCREASE
metropolitan area, there is demand for approximately 6.6 million square feet of
new office space by 2025. The sectors with the most growth include professional 6.6 M SF INCREASE
services, healthcare, and finance, especially in northern Indianapolis submarkets
such as Carmel, Meridian Corridor, and Keystone Crossing.
BROAD RIPPLE
Office leasing agents representing both developers and tenants indicated that
40,000 SF BROAD RIPPLE PRE-LEASE DEMAND
there is enough market interest in Broad Ripple to pre-lease 40,000 SF of office
space. Typically a speculative office space development has a 40-50% prelease 50% PRE-LEASE REQUIREMENT
threshold to obtain financing for the project. This suggests that approximately
80,000 SF TOTAL DEMAND
80,000 SF of office could be supported in Broad Ripple.
A new 80,000 SF development would represent a 1% capture rate of new regional LOCAL CAPTURE
office development potential by 2025.
1% CAPTURE OF REGIONAL DEMAND
SB Friedman Development Advisors 41DRAFT 5/7/19
03 OFFICE – COMPARABLE REGIONAL OFFICE PRODUCTS
New construction of mid-sized office space has occurred through the Indianapolis Metropolitan Area
Examples of recent mid-sized office deliveries and proposed projects in submarkets across Indianapolis include the following:
BOTTLEWORKS LAKESIDE GREEN BUSINESS CENTER THE EDGE BLUESKY TECHNOLOGY HQ
Address 350 Massachusetts Ave 645 W Carmel Dr. 8890 E 116th St 350 Westfield
Typology NA Professional Medical Technology
SF 180,000 61,000 65,000 55,000
Submarket Mass Avenue Carmel Fishers Noblesville
Avg. Rent --- $23 $20-26 Single Tenant
Year Built 2019-2023 (proposed) 2016 2016 2017
Vacancy N/A 74% (Lease Up) NA 0%
Source: CoStar, SB Friedman
SB Friedman Development AdvisorsDRAFT 5/7/19
03 OFFICE – PROTOTYPE: COWORKING SPACES
Broad Ripple has multiple coworking office options, atypical of an emerging office market
Coworking spaces have become an alternative to leasing office space for freelancers,
entrepreneurs and independent professionals. These spaces are typically operated by
for-profit entities, but nonprofit models exist. Coworking spaces consist of collaborative
work spaces along with private offices, and often include amenities such as conference
spaces, cafés and networking opportunities.
Indianapolis has an emerging coworking space market with nearly 320,000 SF of office
coworking space delivered since 2011. Broad Ripple not only has a large share of the
regional coworking space supply (with 52,000 SF) but has proven to be a good market
for launching successful models such as The Speak Easy on Winthrop Avenue, which
opened in 2011 and has since expanded downtown.
COWORKING PRODUCT
NUMBER OF PROPERTIES 4 3 3 2
SQUARE FEET (SF) 180,300 52,000 31,700 53,800
BROAD FOUNTAIN
CLUSTER DOWNTOWN CARMEL
RIPPLE SQUARE
Source: CoStar, SB Friedman
SB Friedman Development Advisors 43DRAFT 5/7/19
03 OFFICE – PROTOTYPE: COWORKING SPACE PROFILES
There is an abundance of coworking space in Broad Ripple, indicating future demand is limited
The significant amount of coworking in Broad Ripple is an indicator that office tenants want to work in the neighborhood, but suggests the market
may be saturated. Significant expansion of the co-working concept is needed to absorb significant additional coworking space in Broad Ripple.
THE HATCH THE SPEAKEASY CIRCLE TOWER PLATFORM 24 SWITCHBOARD
Submarket Broad Ripple Broad Ripple Downtown Carmel Fountain Square
Year Opened 2016 2011 2017 2017 2017
Square Feet 11,400 35,500 10,400 35,500 20,000
Operator The Hatch The Speak Easy Novel Coworking The Speak Easy Switchboard LLC
Operator Type Local Incubator 503(c) nonprofit National incubator 503(c) nonprofit Local incubator
Individual monthly memberships Apply for membership Individual monthly memberships Apply for membership Individual monthly memberships
Additional cost for office or Access to satellite offices and Additional cost for office or Access to satellite offices and Office space rental
Membership
conference room booking amenities conference room booking amenities Credits to book conference
spaces; hourly rates otherwise
Café, phone booths for private Café, entrepreneurial focused Café, event spaces, networking Café, entrepreneurial-focused Coffee and snacks, private
Amenities
calls, event spaces programing and events events programing and events conference and meeting rooms
Sources: Costar, The Hatch, The Speak Easy, Novel Coworking, Switchboard LLC, SB Friedman
SB Friedman Development Advisors 44DRAFT 5/7/19
BROAD RIPPLE SUPPLY
PRIMARY COMPETITIVE MARKETS
04 Retail EXISTING RETAILER TYPOLOGY
RETAIL DEMAND PROJECTIONSDRAFT 5/7/19
04 RETAIL – BROAD RIPPLE RETAIL SUPPLY
Broad Ripple and the immediately adjacent area has over 2 million SF of retail
Existing retail in Broad Ripple is concentrated in two major areas: 1 million
SF near Glendale Town Center and an additional 1 million SF along Broad
Ripple Avenue. Over 50% of the total product was built prior to 1950. Retail
along Broad Ripple Avenue is all less than 50,000 SF, whereas Glendale
Town Center consists of larger scale retail, with major anchor tenants such
as Target and Lowes.
HISTORIC DELIVERIES
1,200,000
1,000,000
BROAD
RIPPLE AVENUE 800,000
BROAD
RIPPLE 600,000
HIGH
400,000
SCHOOL
Retail (SF)
GLENDALE TOWN 200,000
Less than 2,000
CENTER
2,001 - 5,000
-
2011
5,001 - 10,000
10,001 - 50,000
Greater than 50,000 Total SF
Source: CoStar, Indianapolis Open Data, SB Friedman Source: CoStar, SB Friedman
SB Friedman Development AdvisorsDRAFT 5/7/19
04 RETAIL – MAJOR LOCAL NODES
Major retail nodes include anchor tenants and have over 500,000 SF of existing retail
Buildings
Major
Average Size Other Notes
Square Feet Tenants
B
Broad 147 Kroger Recent delivery:
A Ripple CVS 4,400 SF 7,500 SF
646,000 Fresh Thyme Chipotle
Village
Norgate Primarily A
32
Wal-Mart freestanding
B Shopping Dollar Tree
10,000 SF
and fast food
Center 507,000
retailers C
Glendale 47 Target Macy’s recently
C Town Lowe’s 29,000 SF announced
1,400,000 Walgreens store closure
Center
Primarily Retail (SF)
51 Meijer
Keystone ALDI 11,000 SF
freestanding
D
D
Less than 2,000
Plaza and fast food
529,000 Dollar Tree
retailers
2,001 - 5,000
5,001 - 10,000
10,001 - 50,000
Source: CoStar, SB Friedman Greater than 50,000
SB Friedman Development Advisors 47DRAFT 5/7/19
04 RETAIL – MINOR LOCAL NODES
Minor nodes exist predominately within residential areas and include local or regional retailers
Buildings Key
Tenants Average Size Other Notes
Square Feet
Ambrosia
4 Binkley’s First Merchant’s
College & The Wine Shop Bank in new
A 5,000 SF
Kessler 20,200 SF Haus Love office building
Interior
7 The Fresh Market
54th & Moe & Johnny’s
Primarily local
B 8,000 SF
College restaurants
56,000 SF The Jazz Kitchen
A
Surroundings Former
8
54th & Posh Petals industrial area
C 11,000 SF
the Monon Ferguson Kitchen & Bath converting to
86,000 SF
Mama Carolla’s retail
B C
Café Patachou
6 Auto Service,
49th & Sullivan Hardware
Retail (SF)
D 7,000 SF and restaurant
Pennsylvania Hubbard & Less than 2,000
43,000 SF retailers
Cravens Coffee 2,001 - 5,000
5,001 - 10,000
10,001 - 50,000 D
Source: CoStar, SB Friedman
Greater than 50,000
SB Friedman Development Advisors 48DRAFT 5/7/19
04 RETAIL – KEY FACTORS OF RETAIL DEMAND
There are four factors evaluated as indicators of retail demand
NEIGHBORHOOD STRONG EXISTING NEW GAPS PRESENT
MEDIAN INCOME CLUSTER CONSTRUCTION IN THE MARKET
PERFORMANCE AND LEASE-UP
RETAIL
SB Friedman Development AdvisorsDRAFT 5/7/19
04 RETAIL – DEMOGRAPHICS BY DRIVE TIME
Median household (HH) income is the highest closest to Broad Ripple, decreasing as drive time increases
Drive time is frequently used by
retailers to measure market 5 MIN
strength when considering
whether to enter a new market.
KEYSTONE
CROSSING
15,163
POPULATION
$72,887
MEDIAN HH INCOME
8,851
EMPLOYMENT
Broad Ripple is within a 15
minute drive time of nearly all
north side neighborhoods, in
addition to some periphery 10 MIN
suburbs. The immediately
91,218 $60,618 50,564
BROAD
adjacent area (five-minute drive RIPPLE
time) has the strongest wealth POPULATION MEDIAN HH INCOME EMPLOYMENT
indicators with a population of
15,163 and a median household
income of approximately 15 MIN
$73,000.
DOWNTOWN
280,346
POPULATION
$51,030
MEDIAN HH INCOME
180,926
EMPLOYMENT
Source: ESRI, SB Friedman
SB Friedman Development Advisors 50DRAFT 5/7/19
04 RETAIL – STRONG EXISTING CLUSTER PERFORMANCE
Broad Ripple is the most centrally located of the retail clusters, the only major cluster without a highway adjacency
Broad Ripple is competitive with the top retail markets in the region,
including downtown, the Keystone Mall and Carmel. Only including retail
Carmel Arts
within the Broad Ripple boundary (excluding the Glendale Town Center), the District
neighborhood still has a comparable amount of retail to the competitive
clusters. Occupancy, another indicator of retail strength, is at 98%.
The Fashion
Mall at
According to broker interviews, Broad Ripple retail attracts customers Keystone
citywide. The neighborhood is known for its nightlife, but also for small, Broad Ripple
locally-owned shops. Key competitive markets with the most similar product
typology include Mass Ave and Fountain Square.
RETAIL IN COMPETITIVE MARKETS
Mass Ave
SF 3.4 M 1.7 M 1.5 M 1.0 M 0.7 M Downtown
Fountain Square
SALES $682 M $1.4 B $219 M $153 M $165 M
DOWNTOWN KEYSTONE CROSSING CARMEL BROAD RIPPLE FOUNTAIN SQUARE
LARGEST SMALLEST
Source: CoStar, ESRI, SB Friedman
SB Friedman Development Advisors 51DRAFT 5/7/19
04 RETAIL – COMPETITIVE CORRIDORS
Broad Ripple has one of the most dense concentrations of retail in Indianapolis
Downtown retail tends to be of a larger scale whereas Mass Ave and Fountain Square are centered around a major arterial street. Broad Ripple is
the least linear of the retail districts, with a concentration around Broad Ripple Avenue, but significant retail off the main thoroughfare as well.
Downtown Mass Ave Fountain Square Broad Ripple
1-2,000
2,001-5,000
5,001-10,000
10,001-50,000
Greater than 50,000 SF
BRHS
Source: CoStar, ESRI, SB Friedman
All at a scale of 1:14,000
SB Friedman Development Advisors 52DRAFT 5/7/19
04 RETAIL – NEW CONSTRUCTION IN COMPETITIVE MARKETS
Dense urban walkable neighborhoods successfully lease ground floor retail
FOUNTAIN SQUARE MASS AVE
The Hinge Forte In Fountain Square Bottleworks 705 W Walnut St
Address 719 Virginia Ave 1140 Shelby St 855 Massachusetts Ave 705 W Walnut St
SF 65,000 SF 4,400 SF (ground floor retail) 175,000 SF 9,644 SF (29,000 SF of residential)
Stories 4 stories 5 stories 2 stories 4 stories
$18-21/SF
Est. Rent $22/SF NNN $28-32 / Gross SF $16-20/SF NNN
Confirmed $18/SF rent in 2014
Parking Ratio 1.23 parking spaces / 1,000 SF 10 parking spaces / 1,000 SF 8 parking spaces / 1,000 SF 3.1 parking spaces / 1,000 SF
Year Built 2012 2018 2019-2023 (proposed) 2015
Vacancy 0% 81% (new in lease up) NA (under construction) NA (under construction)
Source: CoStar, ESRI, Interviews, SB Friedman
SB Friedman Development Advisors 53DRAFT 5/7/19
04 RETAIL – NEW CONSTRUCTION IN BROAD RIPPLE
New retail construction has successfully leased up in Broad Ripple
1 Broad Ripple Shoppes NORGATE SHOPPING
CENTER
2 Broad Ripple Village 71st STREET
GLENLAKE PLAZA
2
BROAD RIPPLE 3
VILLAGE
1 BROAD RIPPLE AVE
GLENDALE TOWN
3 Just Pop In CENTER
KESSLER BLVD.
KEYSTONE AVE
COLLEGE AVE
RETAIL
KEYSTONE
PLAZA
52nd STREET
Source: CoStar, SB Friedman
SB Friedman Development Advisors 54DRAFT 5/7/19
04 RETAIL – NEW CONSTRUCTION IN BROAD RIPPLE
New retail construction has successfully leased up in Broad Ripple
Broad Ripple Garages & Shoppes Monon Point Building Just Pop In
Address 6280 N College Ave 1002 Broad Ripple Ave 6406 Cornell Ave
SF 28,000 SF 2,500 SF (7,500 total) 5,000 SF
Stories 2 3 (1 retail) Single story
Estimated Rent $35 / NNN SF (Asking) $15-19 / NNN SF Occupied by owner
Parking Ratio NA NA 6.9 parking spaces / 1,000 SF
Year Built 2013 2014 1920/renovated 2017
Vacancy 0% 0% 0%
Tenant(s): HopCat, Marco’s Pizza, Pure Tenant(s): Chipotle Tenant(s): Just Pop In
Other
Barre Developer: Lor Corporation Developer: Fortney Enterprises
Source: CoStar, ESRI, SB Friedman
SB Friedman Development Advisors 55DRAFT 5/7/19
04 RETAIL – EXISTING BUSINESSES BY CLUSTER
Broad Ripple has the highest concentration of bars and cafes compared to other competitive clusters in the region
Broad Ripple is well served by moderately priced restaurants, but has a minimal amount of fine dining. Due to the proven strength of the market to
date and the fact Broad Ripple restaurant demand is regional, there is likely demand for additional fine dining.
Broad Ripple Carmel
VENDOR COUNT BY COMPETITIVE RETAIL MARKET
Broad Ripple Carmel Fountain Square Mass Ave
Restaurant 68 21 11 40
American 2 2
Rangeline Road
Bar 19 7 6 16
Café 18 6 6
RETAIL CATEGORY
Specialty Food (e.g. dessert shop) 4 4 4
Broad Ripple Avenue Fast Food 7 1 1
Italian/Pizza 5 3 4
Fountain Square Mass Ave Ethnic 15 1 2 7
Fine Dining ($$$/$$$$) 1 1 2 1
Fitness 1 2
Entertainment 18 7 12 12
General/Clothing 28 11 8 11
Salon 29 9 1 3
Five-Minute Drive Time
Population 15,163 19,521 27,272 18,431
Median HH Income $72,887 $70,782 $33,500 $44,354
Source: ESRI, SB Friedman, Yelp Employment 8,851 15,467 12,268 61,300
SB Friedman Development Advisors 56DRAFT 5/7/19
04 RETAIL – RETAIL TYPOLOGY BY POPULATION
Broad Ripple retail draws from beyond the neighborhood boundary
Of the competitive markets, Broad Ripple has the BUSINESS COUNT PER 1,000 RESIDENTS
5.00
highest ratio of businesses to residents within a five-
minute drive time for all of the major existing business 4.50
4.4
categories.
4.00
Anecdotally, key interviewees stated restaurant
3.50
demand is driven by nearby students and young
professionals interested in the concentration of 3.00
nightlife-oriented businesses.
2.50
2.2
The higher rate of entertainment, clothing retailers and 1.9
2.00 1.8
salons also indicates there is significant daytime retail
driven by a population outside of the local market. 1.50
1.3
1.1
The low vacancy and successful leasing of new 1.00
0.7
0.6 0.6
construction retail suggest that Broad Ripple is likely 0.50 0.4 0.4
0.4
0.3
0.5
0.2
capable of absorbing additional retail. Brokers 0.0
-
suggested demand for restaurants and entertainment Restaurant Entertainment General/Clothing Salon
uses would be the most attractive from a leasing
Broad Ripple Carmel Fountain Square Mass Ave
perspective.
Source: ESRI, Interviews, SB Friedman
SB Friedman Development Advisors 57DRAFT 5/7/19
04 RETAIL – RETAIL PROGRAM
SB Friedman projects demand for 20,000-30,000 SF of retail on the IPS Broad Ripple site
▪ According to retail brokers and local developers, the site would
be well suited for additional retail along Broad Ripple Avenue
▪ The frontage could provide space for approximately 20,000-
30,000 SF of ground floor retail
▪ Based on strength of demand indicators, leakage reports and a
presence/absence analysis, the 20,000-30,000 SF could be a
variety of potential typologies, including:
▪ Fine Dining (such as a steak house)
▪ Fast Casual Restaurant
▪ Specialty Food Store
▪ Personal Services
▪ Retail on the IPS site would continue existing connectivity of the
BROAD
Village on Broad Ripple Avenue RIPPLE
COMPTON STREET
AVENUE
BRT RED LINE
MONON TRAIL
RETAIL
61ST STREET
Source: Google Earth, SB Friedman
SB Friedman Development Advisors 58DRAFT 5/7/19
04 RETAIL – PROTOTYPES: SUBURBAN FOOD HALLS
Food halls vary widely in lease structure, target market and achievable rents
According to a 2018 Cushman & Wakefield study on Food Halls:
▪ Success of the food hall model is attributable to:
▪ Less expensive operations for restaurants
▪ Lower start-up capital requirement
▪ Lease flexibility
▪ Offerings should be unique, globally influenced, adventurous
and trendy
▪ Rents vary widely: $15-200 / SF
▪ Lease structure options include:
▪ NNN
▪ Gross – easier to explain to new vendors
▪ Rent + Percentage – Popular but difficult to enforce sales reporting
▪ Percentage Rent – most often seen in new projects (15-30%). Requires
a centralized POS system
▪ Food halls tend to rely heavily on day-time office population
Source: Cushman & Wakefield
SB Friedman Development Advisors 59DRAFT 5/7/19
04 RETAIL – PROTOTYPES: SUBURBAN FOOD HALLS
Food halls have been built outside downtowns nationwide in recent years, but in general require high day-time populations
A SMALLMAN GALLEY, PITTSBURGH, PA B STEELCRAFT – GARDEN GROVE, CA C THE DAILY – ALPHARETTA, GA
• 6,000 SF space • Outdoor urban eatery • 14,000 SF of indoor space
• 4 restaurant concepts (restaurant • 10 craft food and beverage tenants • 7,000 SF garden courtyard
incubator for new concepts) • 85-150 jobs • 12 : 1,000 SF parking ratio
• Opened in Fall 2018 • Opens January 2019
• In repurposed shipping containers
D LEGACY FOOD HALL – PLANO, TX
• 20 tenants A
• Opened in Fall 2017 B
• Box Garden event space/beer garden
outside (with stage and screen)
• Hall Pass payment system
C
D
SB Friedman Development Advisors 60DRAFT 5/7/19
04 RETAIL – PROTOTYPES: COMPARABLE FOOD HALL DEMOGRAPHICS
The daytime population is not currently high enough to support a food hall, in the event the office market strengthens there may be demand
DAYTIME POPULATION RESIDENTIAL POPULATION
350,000 350,000
300,000 300,000
250,000 250,000
200,000 200,000
150,000 150,000
100,000 100,000
50,000 50,000
0 0
Broad Ripple High Smallman Galley SteelCraft - Legacy Food Hall The Daily Broad Ripple High Smallman Galley SteelCraft - Legacy Food Hall The Daily
School Garden Grove School Garden Grove
105-10
Minutes
Minutes 5 Minutes 105-10
Minutes
Minutes 5 Minutes
Source: LEHD
SB Friedman Development Advisors 61DRAFT 5/7/19 05 CONCLUSIONS
DRAFT 5/7/19
05 CONCLUSIONS – PROGRAM PROJECTION
SB Friedman projects the seven-year demand in Broad Ripple will exceed site capacity
Overall, the IPS site is a highly attractive opportunity in the market for multiple land uses. The size and scale of the 16-acre IPS Site necessitates
a redevelopment with multiple land uses. The uses below represent a menu of private development options which have market potential for
development on the IPS site and may be mixed with educational and community uses. The final mix of uses and specific development program
for the IPS site will depend on specific requirements of a competitive bid process; along with site considerations, rezoning approvals and
preleasing opportunities.
80,000 SF 30,000 SF 450-570 UNITS 35-70 UNITS 175-210 UNITS
OFFICE RETAIL MULTI-FAMILY RENTAL CONDOMINIUMS TOWNHOMES/DETACHED
Potential Medium potential High potential High potential Medium potential High potential
Pre-lease 40-50% 40-50% NA 50% As-built
requirement
Key impact Increase in daytime Continued corridor Increase in evening population Increase in affordable for- Allows for contiguity with existing
population growth along Broad sale alternative to land uses adjacent to the south end
Ripple Avenue townhomes of the site
SB Friedman Development Advisors 63DRAFT 5/7/19
05 CONCLUSIONS – OTHER CONSIDERATIONS
The site design will significantly impact redevelopment options on the IPS Broad Ripple site
▪ The size and scale of the site necessitates a redevelopment with multiple land uses
▪ Road extensions and pedestrian plazas are critical to breaking up the superblock and creating a framework for parcelization and
redevelopment
▪ Ground floor frontage on Broad Ripple Avenue should be reserved for restaurant retail and other commercial uses to maximize visibility and
access
▪ Office should be a preferred use to increase complementary day-time activation
▪ Urban plaza or open space element should be used to tie the uses together and serve as a community gathering point
▪ Project should be sensitive to surrounding residential – lower density residential uses could be considered to south and east of site with
increasing density to north on Broad Ripple Frontage
▪ School use may be an appropriate buffer toward the south of the site
▪ The most promising building reuse option may be the gymnasium
▪ This is a once in a lifetime transformative opportunity to develop a large site in the Broad Ripple neighborhood, located in close proximity to
the BRT Red Line, Monon Trail, White River and Broad Ripple Park
SB Friedman Development Advisors 64DRAFT 5/7/19 LIMITATIONS OF OUR ENGAGEMENT Our report is based on estimates, assumptions and other information developed from research of the market, knowledge of the industry and meetings during which we obtained certain information. The sources of information and bases of the estimates and assumptions are stated in the report. Some assumptions inevitably will not materialize, and unanticipated events and circumstances may occur; therefore, actual results achieved during the period covered by our analysis will necessarily vary from those described in our report and the variations may be material. The terms of this engagement are such that we have no obligation to revise the report or to reflect events or conditions which occur subsequent to the date of the report. These events or conditions include without limitation economic growth trends, governmental actions, additional competitive developments, interest rates and other market factors. However, we are available to discuss the necessity for revision in view of changes in the economic or market factors affecting the proposed project. Our study did not ascertain the legal and regulatory requirements applicable to this project, including zoning, other state and local government regulations, permits and licenses. No effort was made to determine the possible effect on this project of present or future federal, state or local legislation, including any environmental or ecological matters SB Friedman Development Advisors 65
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