Retail, apartment blitz hits Fishers

It seems as if all of Fishers is under construction—and not just the perpetual improvements to Interstate 69.

The town in southeastern Hamilton County has snapped back from the recession with a building boom. Developers have lined up a multitude of deals adding residential and commercial space, projects that are coinciding with the town’s recent voter-approved transition to a city.

Specialty grocery chain The Fresh Market has picked a site at 116th Street and Cumberland Road for a new store, and Whole Foods is scouting sites for its own Fishers grocery.

More than 1,000 apartments are planned in four projects, including a $33 million mixed-use project in front of Fishers Town Hall and a $22 million upscale apartment community at the northeast corner of 116th Street and Cumberland Road.

Building permits for single-family homes have jumped 14 percent in 2012, and construction has begun on a 110,000-square-foot expansion of the St. Vincent Medical Center Northeast.

All told, Fishers has $274 million in development projects that opened this year, are under construction, or are scheduled to break ground next year, according to a calculation by the town for IBJ. That includes $100 million in single-family home developments, $94 million in apartment projects, $30 million in retail, $30 million in health care, and $20 million for senior living.

“We really think Fishers is the sleeping giant of Hamilton County,” said Town Manager Scott Fadness. “There’s a lot of potential here. We’re just getting started.”

Town Manager Scott Fadness

In demographic terms, Fishers is ahead of Noblesville and Westfield and nipping at the heels of its western neighbor Carmel.

Fishers has a population of 79,000 (2011 estimate) and a median household income of $89,400, according to the 2010 U.S. Census. The same survey showed Carmel with a population of 81,500 and a median household income of $101,500.

Fishers has an 82-percent homeownership rate, compared with 79 percent in Carmel. About 62 percent of Fishers residents have attained a bachelor’s degree or higher, compared with 66 percent in Carmel, census data show.

The town has at least one big advantage over Carmel: more real estate left to develop, said Town Councilor John Weingardt.

Fishers has grown from a population of 9,000 when Weingardt moved there in 1992. It eventually could accommodate 125,000 people.

“The Fishers community has a tremendous opportunity to really grow in the right way here in the next three to five years,” Weingardt said. “We’ve got a significant amount of undeveloped land we’re trying to develop in the best way possible. We’ve just barely scratched the surface.”

Retail heats up

Fadness sees a tremendous opportunity for retail in particular. Developers seem to agree.

Ground breaking is scheduled for early 2013 on a project at the northwest corner of 116th Street and Cumberland Road featuring The Fresh Market. The 25,000-square-foot store will be built west of an existing LA Fitness.

The plans also call for a 6,400-square-foot retail strip and four outlots with potential for restaurants, banks, a hair salon and other neighborhood users, said Sitehawk Retail Real Estate broker Mark Perlstein, who brokered the Fresh Market deal for owner Sunbeam Development Corp., which is based in Fishers.

An earlier version of the plan called for a Stein Mart and a Borders bookstore, but the opening of Noblesville’s Hamilton Town Center in 2008 temporarily stole its thunder, Perlstein said. Retail demand has since returned for the site, which has easy interstate access.

“Fishers is a pretty dynamic area now,” Perlstein said. “It’s just great demographics, availability of good land, growing demand. The economy is improving, financing is improving.”

The organic grocery giant Whole Foods also is scouting potential sites for a location in Fishers, said real estate deal-maker Bryan Chandler, principal in locally based Eclipse Real Estate.

Chandler said no deal is done and declined to discuss possible locations, including a rumored site at 116th Street and Hoosier Road.

Another Fishers tract where the outlook is improving is the now-retooled 104-acre Fishers Marketplace development at State Road 37 and 131st Street.

A Walmart Neighborhood Market is expected to anchor the retail portion of the project, along with 16,000 square feet of multitenant retail space. The plans also call for a 60-acre entertainment component and a 294-unit apartment community called Addison Landing on 17 acres, though financing might be trickier on those projects.

Terre Haute-based Thompson Thrift is master developer for the property, which it took over after false starts by other developers before the recession.

Another hot spot is the vicinity of Olio Road and Southeastern Parkway south of Hamilton Town Center and Exit 210 (formerly Exit 10) on Interstate 69.

Several new restaurants and retail shops have popped up in recent months, including Taco Bell, Dairy Queen and Wendy’s, and more projects—including an 8,000-square-foot retail strip—are in the works.

Both St. Vincent Health and Indiana University Health Saxony also are expanding their facilities at Exit 210.

Apartments sprout up

While other types of development are showing strength in Fishers, multifamily continues to lead the way, just as it does in most Indianapolis submarkets.

Only about 18 percent of the housing stock in Fishers is apartments or rental homes, well below the national average of 30 percent. The new units are expected to rent for $1,000 to $1,500, depending on size and amenities.

The $22 million Watermark on Cumberland apartment community will be the first Indiana project for Indianapolis-based Watermark Residential, whose ownership includes the principals in Thompson Thrift.

The plans call for 220 units in three three-story buildings with frontage along 116th Street and Cumberland Road, wrapping around a Chase Bank branch at the corner, said Eric Garrett, a Watermark principal.

The project is slated for completion by December 2013; Huntington Bank is providing financing.

The buildings will include elevators—one for every 10 units—along with full-size washers and dryers, 9-foot ceilings with crown molding, granite countertops, and solid-surface floors.

Fishers met all the developer’s criteria for its apartment product: strong demographics, proximity to high-end retail, and easy road access.

“The overarching theme of Fishers is, you have household formation that’s outperforming other submarkets,” Garrett said. “We felt like Fishers of all the submarkets had a distinct need for this type of product.”

Other major apartment projects in the works include a $24 million, 233-unit project called The Hamilton along Hoosier Road south of 116th Street. The project by Carmel-based J.C. Hart Co. is under construction. The first phase of Bella Vista by locally based Edward Rose & Sons calls for 180 units at 106th Street and Lantern Road, just west of Interstate 69.

A $33 million project by Indianapolis-based Flaherty & Collins Properties calls for 203 apartments, 25,000 square feet of retail space, and a 406-space parking garage on 3.4 acres north of 116th Street and west of Municipal Drive, in front of Fishers Town Hall.

As IBJ reported last month, town leaders selected Flaherty’s plan from six proposals and are negotiating a project agreement that calls for an incentive package including free land and $10 million from a tax-increment financing district.

Fishers should be able to absorb the barrage of new apartment units, the highest number of starts since the last similar spurt in the mid-2000s, said George Tikijian of apartment brokerage and advisory firm Tikijian Associates.

“There’s a huge amount of growth up there,” he said. “I think adding 500 to 700 units to the market isn’t going to have more than a short-term impact.”

But Tikijian cautioned that continued low interest rates and growing confidence among buyers could buoy the single-family market at the expense of apartments. Renters in the suburbs are more likely to become buyers than renters downtown, he noted.

There already are strong signs of recovery in the home-building market, said Tom Dickey, the town’s director of community development. Single-family building permits for Fishers were up 14 percent through the end of November, with 474 issued.•