Redevelopment of Hurstbourne Business Park
Redevelopment Of Hurstbourne Business Park
If you’ve been watching the news, you know that a major intersection in the east end of Louisville is getting a significant change. The redevelopment of Hurstbourne Business Park.
The Hurstbourne Business Park is where the “flashcube” building is at the southwest corner of Hurstbourne Parkway and Shelbyville Road. In the picture included, you can see that the north parcel was purchased in September 2016 for $41,000,000. That includes the 255,000-square foot “flashcube” office building where Central Bank is located; as well as, the parcel improved with PF Chang’s. However, it’s important to know that the PF Chang’s restaurant is on a ground lease, the buyer only purchased the ground and the lease, not the actual building.
On the southwest side, Dunn Hospitality Group announced in April 2019 that they will be building a 5-story, 127-room Hyatt Hotel on 1.46 acres. The single building is planned to be 83,000 square feet total and include a pool, fitness center and restaurant plus the hotel rooms. The land was purchased in July 2019 for $1,130,000, or $774,000 per acre. However, when land for hotel development is discussed, the value is often discussed in terms of “keys”, or finished hotel rooms. In this case, the site sold for $8,900 per key.
On the southern end, where the old shopping center was located, Hills Properties will be building a 268-unit multi-family multi-building complex on 7.41 acres. They purchased the land for the redevelopment of Hurstbourne business park in December 2018 for $4.5 million, or $607,000 per acre. Like hotel properties, land for apartments is discussed on a per “door” value or per “unit” value. The purchase price is $16,800 per door.
As far as we know, the flashcube building, Z Oyster, PF Chang’s, US Bank, Fazoli’s, City BBQ and AAA will remain in place. The brown office building behind AAA is likely to remain as well as part of the redevelopment of Hurstbourne Business Park.
This is a good example of a change in the highest and best use of a property. The prior improvements, which consisted of a large shopping center, no longer contributed value to the land. When another use of the site, such as a hotel or apartments is allowed by zoning, physically able to utilize the site, and are in demand, then the value of the land, as if vacant, even with demolition costs, is higher without the shopping center.
Our firm works on real estate puzzles like this all the time. If you have a development project or want to explore the value of your property as is or with another use, give us a call.
