Grandview Phase II Rises from the ground to turn the retail apocalypse on it’s head.
It’s that time of year again – temperatures are climbing, the amount of daylight is increasing, birds are chirping, flowers and leaves are growing, and… property tax time has rolled back around. Though the initial components of the list typically bring joy to people’s lives in the Spring season, the arrival of property expenses in the mail can surely have the opposite effect. For some, receiving a property tax bill can cause extra stress and undesirable gray hair – especially if costs have risen. At Bradley Company, our goal is to lessen the burden that annual property taxes bring through our Tax Consulting Service and to help property owners capitalize on the valuation of their holdings.
In today’s economic environment, it is vital for property owners to maximize the value of their assets. Market rents need to stay competitive, while property operating expenses need to be consistently controlled and reduced in order to reach stabilization and value retention. One of the largest line-item expenses in property ownership is real estate tax. Through our Tax Consulting Service, our focus is to seek a fair and equitable assessment of the property with a goal of increasing and maintaining the property value for our clients.
What exactly is Tax Consulting, and why is it important? Tax Consulting is an annual assessment review and appeal process used to monitor, maintain, and reduce Real Estate Tax Liability. Every year between April and June, each County Assessor in the state of Indiana sends tax payers a Form 11 Notice of Assessment for the current year assessment as of January 1st. Once these notices are sent, the window for appeal opens and the taxpayer has only 45 days to appeal the assessment. That 45-day window is incredibly significant because that is the only time frame that is available to file the appeal, so it is extremely crucial to be on the lookout for the arrival of the Form 11. Once the taxpayer has received it and made the decision to take action, the first step should be to get in contact with our extraordinary team of experienced consultants.
Since 2010, we have saved our clients over $5M in tax liability, creating approximately $50M in property value. We have a success rate for appeals of 90% with a strong desire to continuously retain and improve that number. Our team of professionals at Bradley Company maintain very positive relationships with County Assessors which essentially builds trust and leads to favorable results. Those working relationships have helped propel our team to become proficient with navigating through the process and the system, resulting in strategic planning practices, effective courses of action, and, ultimately, successful appeals. To keep our success rate high and continue building trust with County Assessors, we will not file an unwarranted appeal.
Dealing with Property taxes doesn’t have to be a painful process when you rely on our team to work for you and with you. We enjoy what we do, and we are committed to putting forth our best effort in every scenario. Our goal is to help you pay a fair and accurate price so that you can focus more time enjoying the Spring and Summer, and less time stressing over the costs of your property taxes. Contact us for more details or to get started!
Here We Are
Even though we’re almost two months removed from Amazon’s announcement that Indianapolis wouldn’t be host to their second headquarters project. The impact of the process and outcome will reverberate through Indianapolis for the foreseeable future.
The debate as to whether Indianapolis is better off without Amazon coming to town will also no doubt continue into the future as many believe the sacrifice to woo the giant tech company was simply too great a price to pay and other feel that any public support for the project (cities are giving billions in public funding to Amazon) would be offset by the future income of jobs and the resulting need for additional amenities to support such rapid growth. Several well known economists stood against the incentives, created a petition pleading the cause for cities to do what Indianapolis did, and not bow to down to massive incentive packages.
Had Amazon selected Indianapolis, a certain amount of challenges would have been dealt with, mainly the construction of housing, especially apartment housing.
According to HotPads, a division of Zillow as cited in THIS article, they had anticipated that Indianapolis would have needed to
“add 1,960 apartment units for every year of Amazon’s anticipated seven-year build out to keep pace with the additional employees who would relocate to the city.”
That’s a significant pace to set for new construction and management of residential properties. Developers of course would be more than happy to put their money into that development ring as occupancy would all but be assured as the population soared. This of course also would have meant an increase in certain retail sectors, as restaurants, grocery stores, and more inevitably follow population growth.
The “Now What”
Even though Amazon HQ2 isn’t going to open in Indianapolis, the process cast a light on the areas that Indianapolis needs to improve further upon. In this instance, the technology sector, specifically the employee base needs to grow.
According to this Indianapolis Business Journal Article, this is the are that Indianapolis still needs the most growth in. According to the US Department of Labor Statistics, Indianapolis is the 6th fastest growing city for tech jobs. The downside is that they’re 34th with just a shade over 31,000 jobs available. That’s far below the available jobs top cities that Amazon was looking at, and half of what Austin, Texas, another burgeoning tech town boasts.
What does this mean for the Indianapolis Commercial Real Estate Scene?
It means that there is more room to grow, and we should see that happen in the next few years. As Indianapolis continues to grow, the needs for industrial, office, and residential space will continue to rise. Re-purposing old and outdated spaces into new tech friendly spaces can be a tall task, but one that has to occur for the city to continue it’s ascent.
The Mixed-Use format isn’t likely going anywhere either as more people move back to city centers and want to live, work, and play together without long commutes, or even needing more than Uber or public transport.
In the process, redevelopment becomes an intriguing option for owners who have older buildings in their portfolio they want to keep and keep full. It wouldn’t be shocking to see new development as needs rise, and land pricing generally is favorable in the Indianapolis area compared to the national rates.
Indianapolis is still positioned to see great growth, even without a shiny new HQ2 building sitting in city limits. If you’re looking at a city for investment, Indianapolis is a great option. Our report from earlier in the year shows strong markets in Office & Industrial. You can read it HERE. We discuss several shifts and areas of opportunity that are either available now, or will be coming into view in the next few years.
There might not ever be a better time to get into the commercial real estate markets in Indianapolis.
Curbs and Curb Corners
Staking and flagging of curbs and curb corners for snow removal purposes is one of the simplest preparations one can do but can save thousands of dollars in repairs and early replacement needs. The area’s most prominently damaged are curb corners and curb endings. We also commonly find curbs damaged at areas where snow is piled in parking lots and where snow may be pushed back up and over curbs into vacant grass areas. Whether done in house or contracted it is important to thoroughly understand the snow removal practices for your property(s) in order to stake effectively. Defining the best practices should include direction, sequence, and locations for pushing snow. Once you have established these best practices you will be able to effectively stake your property curbs.
Hydrants, Irrigation Heads
Fire hydrants are often marked by your local Fire Departments but if on private roadways and drives you may need to provide them. Spring back flex markers are best suited for hydrants. Never allow snow to be pushed over a hydrant burying it from visibility. Hydrant markers are the best way to ensure this doesn’t happen and in avoiding possible costly damage to a hydrant. Damage to irrigation heads is probably the second most common occurrence in snow removal on properties where they are present. Since they are somewhat randomly placed throughout a property and are easily covered with a minimal amount of snow fall they are easily overlooked by both self-propelled and manual snow removal equipment. This goes back to the importance of having and understanding the best practices of snow removal for each property. Other items that should be considered for staking are French drain covers and surface utility access covers.
With the repair costs that can be avoided by properly staking your property and the minimal investment needed, proper staking should be a mandatory part of the winter prep at any property.
Caring for the roof of a commercial building is often overlooked, but can cause serious problems if not properly taken care of. Here is are some easy ways to ensure a property’s roof survives the winters.
Seasonal Preventative Maintenance can be a major cost saver for system efficiency as well as prevention of compounding system failures. Here are some simple steps done by our professionals as routine maintenance for the heating season.
Sealing the cold out of your living space can involve even the simplest variables. Here are a few simple tips that can assist in cutting heating bills as well as make for a more comfortable living space.
Navigating The Challenges of Buying & Selling Commercial Real Estate in the High-Growth Grand Rapids Market
The booming downtown, although mostly positive, also means additional challenges to finding solutions for what clients need. For some, that solution is the suburbs…
A Strong but Uncertain Economy Leads to Flux and Possible Changes on the Commercial Real Estate Horizon.
The economy is rolling.
The opportunities are immense.
The 25th annual Market Study from Bradley Company helps break down what’s happening in commercial real estate in Indiana and Michigan.
The company, which has roots that go back 40 years, issues an annual study to assess what has happened in the past year and what the trends mean.
We’re all excited about this year’s study and a lot of credit for what’s in it goes to Steven Heatherly, Bradley Company’s senior market research analyst. He and others have worked together to craft this year’s study and he points to several takeaways from it.
Downtown development and redevelopment
“One of the biggest takeaways are the investments being made in the urban cores of many cities,” he said. In Fort Wayne, South Bend, Kalamazoo and other downtowns in the two states, people are investing. “Some of these are developments that have been planned for years and they’re finally happening,” he said.
The Exchange Building in downtown Kalamazoo and Skyline Tower in Fort Wayne are very important projects for their regions. In South Bend, the first office building proposed in nearly three decades is in the works.
It reflects a national trend focused on downtowns and is happening in our own secondary markets.
Strong economy/ low-interest rates
Buyers, developers, and investors have a general good feeling right now and want to build on ongoing successes, Heatherly said.
He points to a speculative distribution center in South Bend being filled quickly, helping lead to a second speculative building being constructed as evidence of how people being strategic, but also taking risks.
In many markets, big box stores are closing, leaving behind large vacant retail spaces. In Fort Wayne, some of the spaces are being used for rentable storage. In Elkhart and South Bend, a laser tag business filled two large vacant retail spaces in the market. “There’s a use for these buildings,” he said.
In addition, other retailers now have opportunities to enter markets because of available space. As retail continues to change overall, so will its part of the real estate market.
You can learn more about these trends and how they’re playing out in Indiana and Michigan in the 25th annual Market Study we’ve prepared for you.
A digital copy is available and paper copies will soon be in our offices for distribution.
If you happen to read or listen to Freddie Mac officials, the key economic factor driving housing demand is the labor market. In 2017, the Indiana Economic Development Corp. (IEDC) secured 293 commitments from companies across the country to locate or grow in Indiana.
Collectively, this will make for more than $7 billion in new investments and 30,158 new jobs in the coming years, marking the highest annual commitment in IEDC history.
Companies currently expanding and adding thousands of jobs throughout the region have been contributing greatly to the growth of the multihousing market in central Indiana.
More than 2,380 market-rate apartment units were completed in 2017. Construction doesn’t appear to be slowing down either, as over 2,200 units were under construction at the beginning of 2018.
Apartment deliveries soar
Steven Heatherly, Bradley Co.
Central Indiana has experienced a marked increase in overall multifamily deliveries. Between 2014 and 2017, developers delivered approximately 15,000 new units, compared with 13,500 units over the previous 14 years combined.
A large majority of the projects are greater than 100 units, particularly the market-rate developments. Lately, most of these projects have contained pockets of amenities or are located near amenities.
Downtown Indianapolis was home to one of the more iconic projects completed in 2017. Indianapolis-based developer Flaherty & Collins delivered 360 Market Square, a $121 million mixed-use development consisting of 292 luxury apartment units and a new Whole Foods Market.
Located adjacent to Cummins’ new $30 million global distribution headquarters and the new Julia M. Carson Transit Center, 360 Market Square enables residents to take full advantage of its accessibility to various downtown attractions.
Virtually down the block, the largest project under construction in terms of number of units is Phase II of The Residences at CityWay. The $135 million mixed-use development is expected to add 400 units to downtown Indianapolis once it is completed in 2019.
The suburbs are not holding back either, particularly the trifecta of Brownsburg, Avon and Plainfield, which have been holding their own against the hotbed communities of Carmel and Fishers to the north. Both areas have seen several new developments of 100-plus units in the past few years.
While the west side will benefit from several new deliveries in 2018, it lacks the planned projects we are seeing take shape on the north side.
According to Reis and Axiometrics, the multifamily sector in central Indiana has maintained sound real estate fundamentals during this expansionary period. Although rent growth is slowing and the vacancy rate will likely rise 10 to 15 basis points due to a surge in new supply, the most in 20 years, the market still offers plenty of opportunity for investors.
The key is to ensure that any future development is carried out prudently. Indianapolis is fortunate to have investment fighting its way into our neighborhoods. As a community, we should all make sure the investments on the table will feed our community and its residents for years to come, and not provide a broken development to detract from the hard work of central Indiana.
Will we see developers pivot to smaller infill concepts and launch those into our new urban-suburban trend? With a Class A average vacancy rate of 5.9 percent in the fourth quarter of 2017, and Class A asking rent increases through all four quarters of the year, we see opportunity in the market.
New urban-suburban mix
Yes, it rhymes, but that is not our fault. Some have noticed the new trend toward urban core development, even in nontraditional urban development areas. Going vertical in Carmel, Fishers or Greenwood with multifamily or mixed-use development was unheard of 10 years ago. It seems like most new multifamily housing has some mixed-use component, or the ability to leverage existing area amenities.
With new development working its way through existing Tier 1 sites (both urban and suburban), what alternative can there be to keep up with the demand for quality Class A space? The answer may be smaller infill developments, less than 100 units.
Indianapolis and its resident energetic and entrepreneurial developers, albeit somewhat unknown, seem to be taking note. In the Broad Ripple Village neighborhood, there are five new developments in various stages of construction that range between 35 and 151 apartment units per project.
For one of our top market makers to take on a project, it may need to be in the 150- to 250-unit range with 20,000 square feet of associated retail and office. But smaller multifamily developers should seize on the opportunity to develop near big projects and capture tenants.
More development ahead
This new urban infill opens up many opportunities for apartment developers throughout the region. With more than 30,000 new jobs planned for the region, look for other neighborhoods throughout central Indiana to attract new multi-housing developments in the near future.
The limited availability of land and sites adjacent to the new suburban-urban core should allow for smaller projects with more variability in design, materials, and layout to penetrate central Indiana.
Now that the grid has been laid out in Indianapolis, we can all help finish the picture.
— By Jonathan Hardy, Advisor, and Steven Heatherly, Senior Market Research Analyst, Bradley Co. This article first appeared in the March 2018 issue of Heartland Real Estate Business magazine.