The acre of land is now just an open field with restaurants nearby, but the price tag is one of the highest in the area at $1 million.
The price isn’t just because of what’s been built nearby, including an Interstate 65 exit, Walmart supercenter, grocery store and shopping centers. The number of vehicles that stop at the busy intersection and hundreds of nearby homes with families who need a place to grab a meal or pick up groceries also have helped drive up the price.
The land around County Line Road and Emerson Avenue is some of the priciest currently for sale, and developers think it will sell because the intersection attracts thousands of people every day. State traffic counts show 100,000 vehicles pass the exit at County Line Road on I-65 every day, and that doesn’t include local traffic that never gets on the highway.
But a busy road isn’t the only factor that goes into the price of land.
Consider these properties on State Road 135: Lots at Whiteland Road in Bargersville will cost a developer $82,000 per acre; but drive two miles north to Stones Crossing Road, and the price per acre triples to $263,000. Head another two miles north to the highly developed Smith Valley Road intersection, and the price nearly triples again to $667,000 per acre.
If land is in a high-traffic area, the price typically shoots up. A high traffic-intersection, a plot near an interstate exit or an outlot for a big-box store or shopping center all will have a higher price because they attract the most potential customers, said Ross Reller, senior vice president and director of land services for Colliers International’s Indiana region. Developers will pay a premium for a corner lot if they know thousands of people will cross through that intersection every day.
Businesses are willing to pay more if they have some indication that the location will be the most profitable spot for their company, Reller said. In the process of opening a new business, land costs make up only a small portion of the overall cost. Paying $1 million for an outlot near Target in the Center Grove area might sound high for 1.5 acres of land, but it’s a small amount compared to the cost of building and the long-term expense of staffing and maintaining a restaurant or coffee shop, he said.
“There’s an old saying that retailers would rather pay a retail price for land and be correct than speculate on a bargain price and be wrong,” Reller said. “There’s really no bargain in cheap land if you can’t use it.”
Lots near County Line Road and Emerson Avenue in Greenwood approach $1 million per acre because of Walmart, the nearby I-65 exit, Franciscan St. Francis Health-Indianapolis hospital and other shops already open nearby, said John Cunningham of Allen Commercial Group, which is listing the land.
Whenever retail businesses look for land in Greenwood, they all want to be near Greenwood Park Mall first, since it’s the biggest attraction in the city, Cunningham said. But there’s no available land there, and most of the retail space around Southport Road also is filled, he said. So developers are now starting to target County Line Road, where they can attract drivers off the interstate, he said. A new hotel and sports complex proposed east of the interstate exit would help increase interest in the nearby land, he said.
“That intersection continues to be phenomenal. Obviously the announcement on the other side of the interstate is helpful. Those people are going to need places to eat and shop. The land prices have done well there,” Cunningham said.
He said areas without an anchor store, without high traffic or lacking large residential areas nearby have lower price tags and are slower to develop because companies are extremely cautious on where they locate, especially after the recession.
For example, the former grocery store at U.S. 31 and Whiteland Road is probably the best available retail spot in Whiteland, Cunningham said. But the national companies he’s contacted about the site are concerned about traffic counts on nearby roads and that there aren’t enough homes nearby. The most recent subdivision in Whiteland was developed in 2005.
The land at the town’s main intersection is listed for about $536,000 per acre because it’s a highly visible location, but it doesn’t have enough features to be as valuable as some of the County Line Road sites, he said.
“The outlying areas will come back. A lot of retailers felt like they overextended themselves when everything was growing so fast and they got into locations that were problematic for them,” Cunningham said.
Land prices along State Road 135 exemplify how current development, traffic and nearby homes affect prices. Companies want to find locations north of Smith Valley Road, which already has several big-box stores and large residential areas, Cunningham said. Since almost all of that land has been developed, outlots such as one at Target, have high price tags. Otherwise, he said, companies have to buy existing space, like where ALDI is building at the former Pizza King and Dannemiller True Value sites.
As development tapers off farther south on the highway, land prices drop with it. Reller is listing lots around South Grove Landing Shoppes at Whiteland Road, which are priced at $82,000 per acre. The shopping center and nearby CVS store are a good start at developing the intersection, but the surrounding area is still rural.
The land can be a good investment for someone who wants to buy early because brokers expect development of new homes and businesses will continue south along the highway. But it’s risky now because there isn’t as much development, he said. The nearby subdivisions were developed in the mid-2000s, but building has increased recently around Hickory Stick Golf Course west of the intersection.
Costs of commercial lots
Here’s a look at some available land in the county and what price it’s listed for:
1 Outlot, southwest corner of Target property on State Road 135, Greenwood
1.5 acres for $1 million
Price per acre: $667,000
Nearby features: Target, Menards, Home Depot, several nearby subdivisions
2 Northeast corner of Emerson Avenue and County Line Road, Greenwood
1.3 acres for $1.3 million
Price per acre: $1 million
Nearby features: Interstate 65 exit, Walmart, Franciscan St. Francis Health-Indianapolis
3 Main Street, just west of Interstate 65 exit, Greenwood
1.72 acres for $900,000
Price per acre: $523,000
Nearby features: I-65 exit, nearby hotels and fast-food restaurants, Sam’s Club
4 State Road 135, Whiteland Road, South Grove Landing Shoppes outlots, Bargersville
20.5 acres for $1.68 million
Price per acre: $82,000
Nearby features: CVS, South Grove Landing Shoppes, on future east/west corridor route
5 State Road 135, just north of Stones Crossing Road, Bargersville
4.53 acres for $1.19 million
Price per acre: $263,000
Nearby features: McDonald’s, Marsh grocery store, nearby apartment complexes and subdivisions
6 U.S. 31, across from Edinburgh Premium Outlets, Edinburgh
2.46 acres for $1.2 million
Price per acre: $455,000
Nearby features: Edinburgh Premium Outlets, I-65 exit
7 Former grocery store, Whiteland Road and U.S. 31, Whiteland
1.82 acres (including existing building) for $975,000
Price per acre: $536,000
Nearby features: On U.S. 31 and Whiteland Road intersection