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A developer will break ground Wednesday on a mixed-use project at 86th Street and Keystone Avenue, adding more than 100 apartments to a rental market showing no signs of cooling down.

The more than $30 million development, called Ironworks, is scheduled to open in May 2014, according to Wisconsin-based developer Hendricks Commercial Properties LLC. The five-story building will have more than 36,000 square feet of retail space on the first floor and 120 units on the upper floors.

It will join a handful of new apartment projects that have broken ground or begun leasing in the past few years.

“So far, all of the projects are leasing very well,” said George Tikijian, senior managing director of Tikijian Associates, an apartment brokerage firm. “... At some point, there will be too many projects. I don’t think we’re there yet.”

Overall, Indianapolis apartments are nearly 92 percent occupied, according to data from Tikijian Associates. Tikijian said that is the highest occupancy rate he has seen in the past 10 years.

The rates are even higher for apartments in the Keystone area, he said. About 94.5 percent of the 8,800 units in the area bounded by Allisonville Road and College Avenue to the east and west and 96th and 75th streets to the north and south were occupied in 2012.

Ironworks will be within about a mile of three new apartment projects: The Residences at Keystone Crossing, which converted part of the Sheraton near the Keystone Fashion Mall into about 130 apartments; Solana Apartments at 80th Street and Keystone Avenue, which recently started to lease its 336 units; and 82 Flats, which is a 232-unit development a few blocks east of the Fashion Mall.

Ironworks should be able to attract a share of the tenants, Tikijian said.

“Ironworks is not that big ... and it’s a unique property,” he said. “It’s obviously a great location.”

The  project will sit on a strip of land on the southwest corner of 86th and Keystone. The land, which used to house a shopping center, has been  vacant for at least five years. 

Rob Gerbitz, president of Hendricks Commercial Properties LLC, said the company and its partners already have found a 10,000-square-foot anchor.  It will be a national steakhouse chain, but he said he cannot yet release the name. They also are talking to smaller retailers to fill the rest of the space, he said.

He said the shops and restaurants, along with other amenities,  will make Ironworks a desirable place to live, and he is confident that it will attract tenants.

“We’re going to have an original product for this area,” he said.

However, not everyone is happy to see more apartments in the area. Ironworks’ neighbors voiced their opposition to the city before the development was approved.  Ruth Hayes, president of the Nora–Northside Community Council Inc., said nearby homeowners are concerned that the project is “too tall, too dense (and) creates too much traffic.”

“We shall remain unhappy campers,” she said.

The groundbreaking ceremony will begin at 4 p.m. Wednesday. Indianapolis Mayor Greg Ballard is scheduled to attend.

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