JLL.com The property is located on Carmel’s front doorstep on the Southside of Interstate 465 between N. Meridian Street and N. Westfield Boulevard with an average of 144,000 vehicles passing per day.
“It is a prime parcel with unparalleled visibility from Interstate 465,” says Thomas Deere, EVP for Corporex. “With the scarcity of land available in the Meridian and I-465 corridor, it is the premiere place to be in the suburban office market.”
Given the property’s former use and its visibility to I-465, it is a unique offering. Since obtaining a zoning change from the city of Carmel, redeveloping the 14.68-acre site now allows for up to 650,000 square feet of office space or 295,000 square feet of renovations to the existing buildings. The Planned Unit Development District (PUD) zoning encourages a more creative approach in land and building site planning which is necessary given the nature of the existing site. The property features two buildings with a variety of sports courts, indoor/outdoor pool, fitness center, spa and event space. The property is located in an ideal area of Indianapolis as one of the most sought after submarkets.
JLL Indianapolis announced it has been retained by Corporex Co., a Kentucky-based real estate development company, as the listing agent for the site. The property, recently renamed The Crossing at 96th Street, is located at 1300 E. 96th Street.
“The property is easily accessible and offers unequalled visibility on I-465,” says Managing Director John Robinson of JLL Indianapolis, and listing agent for the property. “This property is one of the largest development opportunities available in the area and the zoning allows a lot flexibility for what can be created in this space.”
Corporex Co. has successfully renovated existing fitness clubs in the past and encourages the new entity to consider all of the options. Similar to a renovation completed for a software company in Cleveland, Ohio, the Indianapolis property renovation could allow for additional levels added to the existing buildings and also include a multi-story parking garage. Some of the existing features of the building, such as fitness center or dining area, are highly desirable tenant amenities in existing office buildings and could be incorporated into the renovated space.
“The existing amenities at this property plus the location of the property with direct accessibility to the popular Monon Trail combined the tenant demand in this area make this property a unique opportunity,” says Robinson. “Corporex’s proven success in converting other properties through redevelopment is an added benefit to this project.”
For more news, videos and research resources on JLL, please visit the firm’s U.S. media center Web page: http://bit.ly/18P2tkv.
By Mark L. Boos*
When an interviewer asked what problem caused him to rewrite the last page of A Farewell to Arms an astonishing thirty-nine times, Hemingway was characteristically direct.
“Getting the words right,” he replied.
Unfortunately, it seems few of us are following Papa’s example when it comes to letters of intent (“LOI’s”). Because we just can’t seem to get the words right, our LOI’s often end up generating confusion, hard feelings, and litigation. Lots of litigation.
Why is it so easy to get the words wrong?
For starters, LOI’s are victims of their own popularity. Whether you’re buying, selling, leasing, or developing, chances are the deal will start with an LOI. Many owners, buyers, sellers, tenants, bankers, and brokers wouldn’t dream of kicking off a transaction without one. In short, there are a whole lot of LOI’s being prepared, so there are a whole lot of chances to get it wrong.
In addition, LOI’s are typically prepared by non-lawyers. Consequently, the legal import of the LOI and the significance of certain language are seldom fully appreciated. It is not uncommon, for example, for a regional or national developer or investor to use the same form of LOI regardless of which state it is working in. Because the law governing LOI’s varies from state to state, the same document can have dramatically different legal effects depending on which state’s law applies. This can come as an unwelcome surprise to the parties involved.
The good news is that getting the words right in your LOI really requires just two things: a rudimentary understanding of a couple legal concepts, and asking the right questions.
What you need to know
Legal Concept 1: If it walks like a duck . . .
In Indiana (and most other states), it doesn’t matter what you call the document. If your LOI includes all the material terms of a deal and evinces what a judge believes is objective evidence of the parties’ intent to be bound, you’ve got yourself an enforceable contract. Even if buyer and seller both subjectively believed they were entering into a non-binding LOI at the outset, as circumstances evolve memories can, let’s just say, become less than reliable–usually in a way that benefits the “mis-remembering” party. Since what matters is not what the parties’ intent actually was in the beginning, but rather what the document suggests that intent was, imprecise wording can turn a document the parties originally intended to be a non-binding LOI into an enforceable contract.
The takeaway? If you don’t want your LOI to magically turn into a binding contract, better make sure it doesn’t include any language suggesting otherwise.
Easy enough, right?
Maybe so, but just a month or two ago a client of my firm was wrestling with a “non-binding” LOI that concluded with this little gem: “This letter is intended to outline general business points, and is not a binding contract. Buyer and Seller shall enter into a definitive purchase agreement upon full execution of this letter.”
The use of the word “shall” makes those two sentences wholly inconsistent in the legal world (and, I would argue, in the real world as well). Obviously, the drafter was unaware that Indiana case law includes decisions holding that an LOI obligating the parties to execute a final legal agreement can itself be an enforceable contract. Had he or she been aware of that precedent, the sloppy language presumably would not have made it into the executed LOI. As it was, unfortunately, there was simply no way to predict what a court might do with our client’s document.
Legal Concept 2: Forgetting about good faith can be bad news
Many states impose a duty to negotiate in good faith once an LOI is signed. In other words, even where the parties agree that the LOI is non-binding, it really isn’t. The parties still must negotiate toward a final agreement in good faith. If one or both of them don’t, litigation can result.
Indiana is not one of those states. Under an LOI governed by Indiana law, a party may nearly always simply elect to discontinue negotiations when it so chooses. So, a non-binding LOI in Indiana really can be non-binding . . . provided the parties get the words right.
Not long ago, another client of my firm walked away from a “non-binding” LOI he had signed. He felt justified based on the following language: “. . . this Letter of Intent is not intended to form a binding agreement for the purchase and sale of any real property, and neither party will have any obligation to the other until a formal Purchase and Sale Agreement has been executed by the parties.” So far, so good. Unfortunately, the very next sentence was a perfect example of how to turn a non-binding LOI into a partially binding LOI: “The Purchaser and Seller agree to negotiate diligently in good faith and exclusively with each other for a period of up to 45 days . . . .” That good faith language arguably trumped our client’s right to change his mind and walk away. Had the other party been interested in either preserving the deal or extracting a little money for a “breakup” fee, our client could have been in a world of hurt.
The lesson here is that, unless you are comfortable being compelled to negotiate in good faith toward a final agreement, your LOI better expressly close that door.
To summarize, you really need to understand just two legal concepts to get the words right in an LOI. First, sloppy language can turn what the parties intended as a non-binding LOI into an enforceable contract. Second, “good faith” is a legal term of art with particular legal effect. Tossing it around haphazardly in an LOI can have consequences neither party expects.
What you need to ask
In addition to being familiar with a couple of basic legal concepts, getting the words right in an LOI is also a matter of asking a few basic questions before you draft.
- Question 1: Why isn’t my attorney drafting—or at least reviewing—this?
After all, it’s a legal document with potentially significant legal consequences–dangerous terrain for non-legal folks who likely don’t know what they don’t know.
- Question 2: To what extent, if at all, do the parties want this LOI to be binding?
In my experience, parties to an LOI typically say they want a non-binding document when what they really want is something slightly different. In many, if not most, cases the parties want certain LOI terms and agreements—confidentiality and “no shop” provisions, for example—to be binding. In other words, notwithstanding what they may call it, parties to an LOI most often want a partially binding document. Making sure the provisions that need to be enforceable are enforceable while the balance of the LOI isn’t requires deft drafting and a fair bit of detail. Whatever the parties’ shared intention really is—non-binding, partially binding, or fully binding—the language of the LOI needs to make that intention perfectly clear. Again, getting the words just right really matters.
- Do the parties want to be bound by a covenant to negotiate in good faith, or do they prefer to be free to walk away at any time?
LOI’s, like zombies, seem to be nearly impossible to kill off. They get revised, recycled, and resuscitated for use in one transaction after another, warts and all. For that reason, I recommend including a clear statement as to whether or not the parties intend to be bound to negotiate toward a definitive agreement in good faith. As touched upon earlier, this is not strictly necessary in states such as Indiana where no duty of good faith is implied. However, because LOI forms—either intact or in bits and pieces—tend to travel across state lines where they are reused without review by local legal counsel, it is prudent to address the good faith question explicitly.
Your next LOI probably won’t have much in common with A Farewell to Arms. But, like Hemingway, you will produce a better written product if you focus intently on getting the words right. Fortunately for all of us, getting the words right in an LOI is a simple matter of knowing some basic legal principles and asking the right questions. If we do that and mind the details, the parties’ actual intention will be accurately captured and, most importantly, our LOI’s will lead to closings instead of to court rooms.
This article is for informational purposes only and does not constitute legal advice. You should consult an attorney for advice addressing any particular set of facts or circumstances.
It’s been quite some time since office development momentum made the headlines. Office building construction took a bit hit in the recession of 2008 and beyond. It seems now that may be mere memory.
According to Adam Broderick of JLL, the development isn’t all speculative just yet, however. “All of the [projects] have between 30% and 80% pre-leasing.” And in some of the projects, the tenant is also one of the building owners.
But is this a step in the direction of someone marketing a purely spec building? “You are just not going to get anything financed today without a good percentage preleased,” according to Ed Chandler of Grandbridge Real Estate Capital.
Fishers and Carmel seem to be leading the suburban charge, the two areas account for most of the 10:1 ratio of suburban to urban office construction, according to an interactive chart put together by Brianna Marshall, Research Analyst at JLL.
Fishers is attractive to developers because of a fast-growing amenity base and “a very active and aggressive local government offering incentives and working to support the projects,” according to Broderick.
Broderick and his team are leasing up the Braden Building in Fishers pictured here. A quick look at the area surrounding Braden shows dozens of restaurants, retail, and a hotel; not to mention good access to the Interstate.
Carmel is seeing projects simply because it is located where office tenants want to be, such as the Midtown Project by Ambrose and Old Town Development.
No one that we reached out to cared to speculate if the recent activity would overflow into other suburban markets, but JLL said it is working with its clients on at least three more to-be-announced suburban office projects.
After setting a new historical high for net absorption last year, the market is on pace to set a new benchmark for construction this year. There is 6.8 million square feet still under construction with completion by year-end. This total alone would be record-breaking for a single year. But it will shatter the previous mark by several million square feet when combined with the 2.5 million square feet that has already been delivered. Download the full Q2 Indianapolis Industrial Outlook Report for all of the details.
What does all this construction mean for the market?
For starters, demand is high. Forty percent of all completed construction is leased. That number rises to 45% for industrial projects still under development. Leasing activity also increased from three million square feet to five million square feet this quarter with several of these tenants taking newly built space.
Investors are taking notice as well. Several newly built projects have already traded hands. In fact, one third of all investment activity is from companies that are new to the market. And while summer typically signals a slow down, that will not be the case for the Indianapolis industrial market. Several new construction projects will come to completion as well as a few large leases will take occupancy.
More from around the metro area:
- With 600,000 square feet of net absorption year-to date, Boone County leads the entire MSA and accounts for half of the market wide total.
- Despite space givebacks this quarter, Hamilton County still has one of the lowest vacancy rates in metro Indianapolis.
- Three out of four deals closed this quarter featuring tenants new to the Indianapolis industrial market chose to locate in Hancock County.
- Hendricks County accounts for half of all completed and ongoing bulk/distribution construction projects as well as leasing activity.
- Dirt began moving on a 233,000-square-foot speculative bulk/distribution building this quarter. One or two more will soon follow in Johnson County.
- While most of the construction pipeline is bulk/distribution, two mid-sized warehouse buildings are nearing completion in the Northwest submarket of Marion County.
Download all of the details from the Q2 Industrial Outlook Report.
Janice joins Bradley Companies as a Senior Vice President. She will be responsible for business development, recruitment, training and developing their brokerage line of business in the Indianapolis market. Janice is a nice addition to the Bradley team having more than 20 years’ experience including long stints at CBRE and NAI Olympia. Janice is a founding member and past president of IndyCREW, past CREW Network Board Member & Foundation Trustee and 2013 President of the Indiana Commercial Board of Realtors. She is also a recipient of several awards including the Indianapolis Business Journal’s 40 Under 40, Top 20 Women in Commercial Real Estate in North America and several Top Producer and production based awards.
Heads up to all retail developers:
IBJ.com: Indianapolis Mayor Joe Hogsett announced Thursday a plan to use $500,000 in federal dollars to subsidize the development of retail grocery stores in food-insecure and low-income areas of the city.
The program seeks to “lower costs and incentivize the development of retail grocery stores,” according to a press release from the city. It is being funded through money from the U.S. Department of Housing and Urban Development via the Community Development Block Grant program.
“Too many of our neighbors have limited access to grocery stores, making it nearly impossible to feed their families healthy, fresh food,” Hogsett said in the release. “Through the Healthy Food Access Program, we are working to invest in the development and expansion of food retail businesses that in return can bring new jobs to neighborhoods that need them most.”
Eligible projects must be for the real estate development of brick-and-mortar retail grocery stores.
Applications to receive the funding are being accepted through Oct. 20, and a review committee expects to announce award funding in December. It is unclear how many projects would be funded through the grant.
The city says preference would be given based on job creation, proximity to residential areas, the potential for neighborhood revitalization and proximity to transit—with the highest preference going to projects within a half mile of a future IndyGo bus rapid transit line.
• The current state of development lending in Indiana
• A Bankers outlook on the commercial real estate industry
• How are small and medium size banks evaluating commercial real estate loans?
• Interest Rates, The Economy & LIBOR: Where they were, where are they now and where are they headed?
• How will the new administration positively or negatively impact the banking industry and how will this impact the commercial real estate industry?
• How do developers view current underwriting standards?
• Who is winning the battle for permanent debt? Banks, CMBS, Life Companies or Agency?
• Issues faced in today’s lending environment and how to approach lenders to increase your terms
• How are deals being underwritten today and what are the challenges?
• Loan to value ratios – Where are they at? How do product types stack up?
• Tips on how more investors can access the debt markets today
• What is the future of agency financing and how will it impact investors?
• Update on Indiana foreclosures
• New law changes make it easier to raise money for real estate. Crowdfunding and other options.
• Strategies to access SBA loans for real estate projects
• Mezzanine lenders and other hybrid sources for acquisition
• How to position yourself to be more attractive to investor capital
• Private REIT’s – what you might want to ask before forming one or joining one
• Tax credits, tax depreciation, grants & other financing sources that can be used as equity
• Hard money lenders & sample terms. Is there a time when this makes sense?
• Investment sales recap – top deals over the last 12 months
• What types of investors are active in Indiana? Institutional Partners, Family Offices, & REIT’s?
• What are the hottest investment asset classes in Indiana and why?
• How much money is really out there? Is new money targeting Indiana?
• How have underwriting standards changed for investors?
• Where are CAP rates today: Multifamily, Office, Industrial, Retail?
• Future Predictions: where is our marketing going?
The Indianapolis Industrial market ended the second quarter 2017 with a vacancy rate of 5.8%.
The vacancy rate was up over the previous quarter, with net absorption totaling negative 45,713 square feet in the second quarter. That compares to positive 410,902 square feet in the first quarter 2017. Vacant sublease space increased in the quarter, ending the quarter at 414,042 square feet.
The Flex building market recorded net absorption of positive 163,320 square feet while the Warehouse building market recorded net absorption of negative 209,033 square feet in the second quarter 2017.
As the e-commerce sector continues to expand, so does Amazon.com Inc.’s already-sizable local em-ployment base.
And although the pay at the cavernous facilities—where workers receive merchandise and re-sort it into outbound shipments to customers—is far lower than the area average, experts say the jobs are still valuable to the region.
It ranks as the 15th-largest employer in the state, according to IBJ research. The e-tail giant has slightly fewer Indiana employees than Memphis, Tenn.-based FedEx Corp., which has a major hub in Indianapolis, and slightly more than Luxembourg-based ArcelorMittal, which has a steel plant in Burns Harbor.
And now Amazon is working to fill more than 1,500 additional jobs at its four area locations: one in Indianapolis, one in the Boone County community of Whitestown, and two in Plainfield. (The online retailer’s fifth Indiana fulfillment center—its largest in the state by number of workers—is in Jeffersonville, just across the Ohio River from Louisville.)
Seattle-based Amazon employs more than 9,000 full-time workers at its five Indiana fulfillment centers, four of which are in central Indiana—with plans to add more positions.
A group proposing a three-story mixed-use project in Broad Ripple has its work cut out for it in a bid to receive city approval.
Thomas English of Thomas English Retail Real Estate and architect Chris Short want to demolish two homes in the 6300 block of Guilford Avenue, one of which has been converted to an office and the other vacant. (Click accompanying image for larger view.)
The two properties encompass the entire block bounded by Main Street to the south, 64th Street to the north, Guilford to the west and Cornell Avenue to the east.
Plans call for roughly 2,500 square feet of retail space on the first floor, in addition to 30 parking spaces; office space on the second level; and 10 apartment units on the third. Short’s firm, Haus, is the architect on the project.