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Simon Property Group plans to raze most of the Saks Fifth Avenue store on the east end of the Fashion Mall at Keystone to make way for new office and retail space.
Indianapolis-based Simon told IBJ it expects to open One Keystone Crossing by the end of 2026, with plans calling for up to 100,000 square feet of Class A office space, as well as a new standalone building, a small plaza, and new restaurant and entertainment offerings. Company officials declined to share the expected cost of the project.
At least two thirds of the Saks Fifth Avenue store will be torn down for the project starting in August, after the upscale retailer closes. The 120,000-square-foot store—the second largest at the Fashion Mall, after Nordstrom—opened in 2003 when it replaced a vacant Jacobson’s store after that chain went bankrupt.
Simon plans to build a community green space area on a portion of the vacated parcel, as well as a new outlot building for an undisclosed home furnishings store along River Crossing Boulevard. A new four-story office building will be built on another part of the Saks property and a parking lot immediately east. The building will also have frontage along River Crossing Boulevard and be adjacent to a parking garage directly north.
“The Fashion Mall at Keystone’s redevelopment will further enhance the center’s positioning as the region’s premier experiential shopping destination and a gathering place for the community,” Patrick Peterman, senior vice president of mixed-use development at Simon, said in written comments. “Simon’s commitment to this asset will ensure the center continues to elevate the experience for our discerning patrons and to meet the demands of our retailers.”
The office building will have first-floor retail and restaurant offerings, with office space on the upper three floors expected to fetch top-of-market rent. The third floor of the building will be incorporated into the remaining portion of Saks, allowing the level a larger amount of square footage—up to 40,000 square feet. Peterman declined to specify the company’s asking rent.
The remaining portion of Saks will have retail and restaurant space on the first floor, along with an entertainment user—Simon is in negotiations with a handful of possible users—split between the first and second floor.
Simon announced in early April its plan to redevelop the eastern portion of the Fashion Mall at Keystone, but at that time offered no details of the project.
Simon is working John Robinson and Traci Kapsalis in the Indianapolis office of Chicago-based brokerage JLL to lease the office space. Peterman said the company hopes to capitalize on continued interest in office space within the Keystone at the Crossing submarket of Indianapolis, where occupancy is close to 100%.
“We’re pretty forward thinking about whether there is a higher, better use and what would we do” differently on a site today, Peterman told IBJ during a tour of the site Wednesday morning. “We contemplate that on every center… if we have the ability to get space back, [we determine how] we can improve the asset. So, this is no different.”
Robinson said the only other local properties that will be in the same class as the addition to the Fashion Mall are Bottleworks and downtown Carmel.
“Nothing can touch them from that standpoint, not even downtown,” he said, adding that prospective users interested in space at the Fashion Mall already expect to pay a premium for the amenities and that will continue with the renovations.
“We’re seeing tenants … have to use their workplace as a compelling reason to get people back to into the office. They’re going down in size, where they can trim off 40% of their space, so they can pay 40% more,” he said. “Rental rate really isn’t an issue to the tenants.”
The project is also expected to draw on lessons learned in Simon’s work at Phipps Plaza in Atlanta, where the company added a 13-story, 365,000-square-foot office tower to the sprawling upscale shopping center.
Simon has begun conversations with the city of Indianapolis Department of Metropolitan Development about the project, although it’s unclear whether any variances or rezoning will be required for Simon’s plans. When asked whether Simon might seek incentives, such as an abatement or tax-increment financing, for the project, Peterman told IBJ “it’s early in the process.”
Atlanta-based Cooper Carry Inc. is the architect on the project.
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It seems odd to me that Simon isn’t trying to get another department store in there. I’d think Bloomingdale’s, which is actually growing, would have been a good fit. I never liked that Saks store. Office space will thrive there, but it seems like a missed opportunity to land a new high-end retail anchor. There’s no where else in the metro area where a high-end department store would be likely to locate.
On a side note, this project should receive absolutely zero subsidies or “incentives” from the City. I don’t know why that question was even asked. The only way this should get any city assistance is if some Fortune 500 company wants to relocate their HQ from out of state, which would be likely to dramatically increase the size of the building.
Department stores are a thing of the past
Cool
Get that F1 racing concept here John R!
It would be nice if the State or City update the interchange at 86th and Keystone and along 86th street not very impressive going into the Fashion Mall. New lighting, sidewalks and landscape would help with the overgrown landscape full of weeds and trash.
Yeah. It’s pretty depressing how bad the gateway to the state’s premier retail area looks. At least they could pick up the trash every couple of months. The city should probably try to get Simon to pay for some of that maintenance though.
Its coming