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Special Report: Buying blind: Lack of oversight leaves state in dark on real estate deals The state of Indiana knows how much it’s spending to lease property statewide -nearly $40 million a year. But it doesn’t know if that’s too much.

The state of Indiana knows how much it’s spending to lease property statewide -nearly $40 million a year. But it doesn’t know if that’s too much. State contracts for third-party real estate services give government officials few safeguards to ensure they’re paying a fair price for office, laboratory and storage space outside of state-owned buildings, those in the industry say. And state administrators have no control over seven-figure commissions paid to two Indianapolis real estate brokers in the past decade,…

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Space crunch prompts Indiana to seek help with real estate leasing duties:

Between the Statehouse, the Indiana Government Center and the State Library building, the state of Indiana owns 1.1 million square feet of real estate in downtown Indianapolis. Still, that’s not enough room to house all state government’s agencies and functions-which is why Indiana spends nearly $17 million each year to lease space elsewhere in Marion County. Some agencies, including the departments of education and health, house nearly all their office workers in privately owned buildings near the Statehouse. Other departments…

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Halakar thinks small, deals big: Real estate services firm quickly finds its niche

Unlike the 500-pound hammerhead shark mounted on a wall in Todd Maurer’s office, Halakar Real Estate intends to remain a small fish in the large pond of commercial real estate brokerages. But the company launched by Maurer, 34, and Ralph Balber, 36, is already making a splash despite its brief, twoyear existence. While Halakar has carved out a niche in the downtown Class B office space market, it also commands enough respect to broker larger deals. Halakar and Indianapolis-based Colliers…

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Sourwine planning to sweeten its local office offerings: Second-generation real estate firm has two new buildings in the works that could nearly double its holdings

When Jim Sourwine was 4 years old, he would sit outside the closed door to his father’s home office and play with his toy cars. Barred from entering the adult-only world, sounds of paper shuffling and adding machine clacking piqued his interest in his family’s real estate business. “I wanted in,” Sourwine recalls. By the time he was old enough to file and wash windows for the firm, his father had moved Sourwine Real Estate Services out of his home…

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VOICES FROM THE INDUSTRY: Why like-kind exchanges don’t make sense for everyone

Section 1031 of the Internal Revenue Code allows you to defer federal taxes by swapping real property for like-kind property. For years, tax advisors have been recommending a 1031 strategy whenever real estate developers and owners are ready to harvest their gains. Today, with real estate valuations at record highs and capital gains tax rates at record lows, there is a good chance a 1031 exchange strategy could defer taxes but lose profits. You may be better off to recognize…

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VIEWPOINT: Signs of economic recovery all around us

After weathering some difficult times over the last few years, there are encouraging signs that central Indiana has turned the corner on its road to economic recovery. The Indianapolis metro area added 22,000 jobs in the year ending in March-a 2.4-percent increase-and in May, the Indiana unemployment rate dipped below the national average for the first time since December. All signs point to continued modest growth. Patrick Barkey, IBJ contributor and Ball State University economist, says, “We should expect to…

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Past retail failures in China don’t scare Simon away: Developer’s partnership with Wal-Mart could be key

Executives of Simon Property Group Inc. are confident the shopping mall owner’s foray into China will prove successful, even though they acknowledge others have failed there. In a conference call with analysts late last month, the locally based real estate investment trust announced its plan to be the first American company to develop retailing projects in the communist country. Its first project will be a 500,000-squarefoot mall at Hangzhou, a city of 6 million people about two hours from Shanghai….

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VOICES FROM THE INDUSTRY: Reaping the benefits of the American Jobs Act

Astute real estate professionals should be taking advantage of several tax-saving provisions of the American Jobs Creation Act of 2004. The act was signed by President Bush last October to spur economic development and investment. The primary components of the Amer ican Jobs Creation Act include increased depreciation deductions on leasehold improvements, greater flexibility for real estate investment trusts, modification of expensing rules for equipment and vehicles, and a reduction in the tax rate for domestic manufacturing activities. Leasehold improvements…

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BEHIND THE NEWS IPALCO buyer wins key lawsuit but isn’t out of woods:

Score one big victory for former executives of AES Corp. and IPALCO Enterprises Inc., but they still face obstacles on other fronts. Last month, Judge Larry McKinney of U.S. District Court in Indianapolis dismissed the final claims in a shareholder lawsuit stemming from AES’ soured $3 billion purchase of the Indianapolis utility five years ago. McKinney didn’t buy plaintiffs’ charges that through omissions and misleading statements the companies had failed to disclose to IPALCO shareholders the risks of exchanging their…

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Quiet approach drawing criticism: President’s lack of visibility hurts IU, some complain

Never mind the Herculean task of leading the state’s largest college system in a difficult economic climate; he knew that would be hard. But after two years of long weeks and late nights, he’s facing a more surprising challenge-defending himself from critics who question his ability to get the job done. IU seems to be adrift, naysayers argue, and so far Herbert doesn’t seem to be doing much to get it back on course. “It is with great regret that…

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Defining success: Those who’ve tasted it share their thoughts on just exactly what ‘it’ is

How do you define career success? We posed that question to a variety of high-profile women and men in the Indianapolis business community. While the responses did confirm some of our preconceived notions-such as that men would mention financial rewards more often than women-there are far more similarities than differences, regardless of gender or profession. Still, “Career success is defined differently by each individual,” as Alex Slabosky, president and CEO of The Healthcare Group, so wisely put it; and as…

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ECONOMIC ANALYSIS: Hoosiers are wallflowers as housing party rocks on

Have you heard about the wild party that’s going on? It’s not one of those parties with wine, women and song. It’s all about buying and selling, and making lots of money. And, for some Americans, at least, it’s being done from the comfort of their own homes. It’s called the housing market, and in some corners of the country, it’s a rowdy affair. In coastal California and Florida, the price of homes is going up so fast it is…

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MSA redevelopers set to make another run at tower: Project takes on new moniker as it rolls out redesigned condominium plans

With a new name, new floor plans and a new marketing team, the developers of the former Market Square Arena site are gearing up to make another go at building a high-rise condominium tower on the east side of downtown. Developers hope the new designs, crafted with the assistance of Chicagobased Mesa Development LLC, will jump-start the tower, now more than a year behind schedule and saddled with a lien from a former key player. The first phase of One…

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BEHIND THE NEWS Marsh shares stage rally, despite firm’s challenges:

Marsh Supermarkets Inc. might be a great place to shop, but it’s been a long time since the embattled Indianapolis grocer has been a great place for investors to park their money. That’s why the recent runup of Marsh shares is raising eyebrows in the investment community. Both the company’s Class A and Class B shares are up more than 25 percent since early June, and better than 20 percent for the year. What’s driving the increase? In part, probably…

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Accounting employees in demand: Sarbanes-Oxley requirements spark hiring surge of experienced accountants, creating openings at smaller firms

Little did Josh Malarsky know five years ago when he began pursuing his master’s degree in accounting that firms would be hiring in such unprecedented numbers. But that was before federal legislation tightening auditing and accounting rules and regulations turned the profession on its head. Known as the Sarbanes-Oxley Act, the law and its stiffer controls have caused accounting firms and corporations to ratchet up staffing numbers. The Big Four firms that audit public companies mostly are searching for seniorlevel…

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Tax credits aid blighted areas: Help open to firms targeting Center Township projects

Federal tax credits supporting roughly $6 million in economic development projects are still available for small-business owners considering expanding or locating in Center Township. The funds are administered through the New Markets Tax Credit Program, which was established by Congress in 2000 to help revitalize blighted areas. In Indiana, the locally based Urban Enterprise Association Inc. helped secure tax credits that can fund $50 million worth of projects, including $12.5 million in Marion County. The tax credits already are supporting…

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Radio Disney catching the ears of youth-and advertisers: Event marketing key to getting local kids to tune in

Two years after its launch, Radio Disney’s local WRZD-FM 98.3 affiliate is outperforming many affiliates in the 55-station network, even though traditional measures of its success are anything but magical. WRZD’s rating by New York-based Arbitron Inc., the industry’s standard media research firm, shows the station barely cracking the top 20 in this market. But WRZD has prospered through another number: listener calls per day. The station averages an eye-popping 4,070 calls a day, according to officials at Radio Disney’s…

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Wells Fargo sees city as ripe for expansion: Commercial banking, capital management key to Indianapolis plan

Wells Fargo & Co. took a couple of quiet but important steps earlier this year as part of a plan to build a major presence in the Indianapolis banking and financial services market. The San Franciscobased corporation in March opened a local Commercial Banking Division headed by longtime banking executive Lex Curry and a capital management office headed by well-known stock manager Tom Pence. The moves, by the nation’s fifth-largest bank in terms of assets, are part of a corporate…

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Insurers look to make uncommon comeback: Pafco, Superior hope to leave rehabilitation this year

Only the hum of central air-conditioning broke the silence when Doug Symons recently led a quick tour of the Indianapolis office where his Superior Insurance Group once employed about 180 people. Rows of gray cubicles sat empty. Boxes filled with old claims and underwriting files lined the aisles. “This,” Symons said as he waved his arms around, “is what an empty office looks like waiting to be filled.” Those bare cubicles could fill up with dozens of new employees and…

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Office sales shatter records: National investors spend big in string of real estate deals

National buyers hungry for commercial properties have started focusing on second-tier markets like Indianapolis, a trend that’s resulting in quick sales at prices previously unheard of here. One and Two River Crossing sold as a package in early July for $41.6 million, or $203 per square foot, setting a new high-water mark for Class A multitenant office space in the Indianapolis market. Before the River Crossing sale, the sales record for suburban office space was $145 per square foot-a mark…

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