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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowDuke Realty Corp. netted more than $1 million during a Tuesday auction of surplus development parcels in Indianapolis,
Fishers, Plainfield and Lebanon, but the locally based real estate company failed to sell two pricier properties.
The company sold seven parcels totaling 36 acres during the auction in Carmel, which drew about 100 people. Each of the
parcels that sold were offered with no minimum bid.
Two parcels offered with reserves, a 13-acre office site in
the Woodland Corporate Park and a Lebanon site with frontage on Interstate 65, did not sell. The Woodland parcel was offered
with a reserve, or minimum bid, of $110,000 per acre, or about $1.4 million, and the Lebanon piece was offered at a minimum
of $30,000 per acre, or about $360,000.
The parcels that were auctioned ranged in size from a 1.85-acre plot in
Park Fletcher business park that sold for $53,000, to a 7.5-acre spread in Lebanon for $133,000. The land fetched an average
of $30,000 per acre. The priciest parcel, 7 acres in the heart of Plainfield’s industrial alley, went for $350,000.
Duke officials said the attendance and sale prices were in line with expectations. End users bought five of the parcels,
while investors snapped up the other two. The land sold for a discount of 20 percent and 40 percent from previous market sales.
Duke has moved to sell dozens of surplus, non-income-producing properties across the country in an effort to strengthen
its balance sheet and pay down some of its roughly $3.7 billion in debt. Wes Podell, the company’s manager of land disposition,
emphasized that the sale represented only a small fraction of the company’s roughly $2 billion in Indianapolis-area assets.
The sites Duke is selling don’t match its short-term focus on leasing up existing properties and, in general,
are more appropriate for owner-occupants or smaller developers, Podell said. He said the company now will consider whether
to launch similar sales in other markets.
Land broker Ross Reller said the company was wise to move quickly and
aggressively to unload the land parcels. He expects the land market to get worse before it gets better.
"Unless
you have an immediate use for land, it’s pretty tough to buy it right now," said Reller, of Resource Commercial Real
Estate. "There will be a tsunami of real estate coming onto the market over the next 24 months, and land is the toughest
category. We just don’t know what anything is worth anymore."
Reller worked on assembling the land for Duke’s
Lebanon Business Park about 15 years ago. Duke paid about $15,000 per acre for undeveloped land, then spent millions more
on zoning, roads and utilities. On Tuesday, the company sold three parcels in the park, one of them for just $14,300 per acre.
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