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INDIANAPOLIS- Eight years after buying Glendale Mall and spending $45 million on a renovation, Kite Realty Group Trust has decided to pretty much scrap most of the 580,000-sf enclosed mall at 6101 N. Keystone Ave. and start fresh with an outdoor center. The REIT says it is tearing down the enclosed portion of the mall, leaving just a couple anchors, and selling part of the space for a new Target store.

The new Glendale Town Center will take up 685,000-sf, and will be anchored the Target and the existing Lowe’s and Macy’s, says Adam Chavers, investor relations director for Kite. “We just felt it was just too small for a regional mall,” he tells GlobeSt.com. “Plus, this is rather close to a successful Simon mall, it makes the enclosed concept for this corner a little difficult.” He says the area has 72,000 people living within three miles, and more than 200,000 people living within five miles. “That’s a significant amount of buying power.”

Chavers says the company has been intentionally not renewing tenants, and terminated many leases earlier this year. He says Kite will spend about $15 million to demolish the enclosed mall portion, and then rebuild a portion into an open-air center.

Tenants remaining will also include the Glendale Library and Lenscrafters. “There are only going to be a few tenants that are staying,” Chavers says. “In that sense it’s similar to a ground-up leasing process.” He says lease rates will likely increase at the property because of the changeover, though he says he can’t reveal the former lease rate. Lease rates in the area average $13 to $22 for a power center tenant, and $20 to $35 per sf for a lifestyle tenant, according to a market report by Colliers Turley Martin Tucker.

The new Target will be finished by summer 2008, and the rest of the project sometime around there, he says. “We’re not yet committing to hard timelines,” Chavers says.

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