Appraisal Regional Analysis of Indianapolis Indiana

The subject is influenced in a general manner by the economic, political,
physical and social characteristics of the Indianapolis Metropolitan Statistical
Area (MSA). An MSA is a geographic area with a significant population nucleus,
along with any adjacent communities that have a high degree of economic and
social integration with that nucleus.

The subject property is located in Central, Indiana, part of a metropolitan
statistical area that includes the counties of: Boone, Brown, Hamilton, Hancock,
Hendricks, Johnson, Marion, Morgan, Putnam, and Shelby. This location is 170
miles southeast of Chicago, 215 miles northeast of St. Louis, 100 miles north of
Louisville, and 100 miles northwest of Cincinnati. The map below presents the
MSA location within Indiana.

The value of real property is influenced by the interaction of four basic forces.
These forces include social trends, economic circumstances, environmental
conditions, and governmental controls and regulations. The interaction of these
four forces influences the value of every parcel of real estate in the market.

Social forces are trends that are exerted primarily through population
characteristics. Real property values are affected not only by population
changes and characteristics, but also by various forms of human activity.

Population and Area:         
Population growth trends influence employment growth, income levels, and
many other key demand parameters analyzed in determining commercial real
estate productivity.  The Indianapolis-Carmel MSA is the most populated region
in Indiana. The MSA shows positive growth trends.  This typically is a positive
indicator for real estate.

Higher Education:         
Institutions of higher learning typically are not as vulnerable to economic
downswings, and they help to provide an area with a more solid employment
base.  There are numerous colleges and institutions of higher learning within the
subject area, including: Ball State University Indianapolis Center, Butler
University, Indiana University-Purdue University Indianapolis  (IUPUI), Ivy Tech
Community College of Indiana, Marian University, Martin University, Oakland City
University Indianapolis campus, The Art Institute of Indianapolis, Vincennes
University Aviation Technology Center, and the University of Indianapolis.

Recreational and Regional Attractions:         
Recreational and regional attractions enhance an area’s quality of life. These
activities may also have a significant economic impact on an area by increasing
the demand for services and retail trade created by visitors. The city of
Indianapolis offers opportunities to participate in a variety of entertainment,
cultural, and recreational options.

Indianapolis has designated six official Cultural Districts. They are Broad Ripple
Village, Massachusetts Avenue, Fountain Square, The Wholesale District, Canal
and White River State Park, and Indiana Avenue. These areas have held historic
and cultural importance to the city. In recent years they have been revitalized
and are becoming major centers for tourism, commerce and residential living.
The Indianapolis Cultural Trail: is an urban bike and pedestrian path that
connects the city's five downtown Cultural Districts, neighborhoods and
entertainment amenities, and serves as the downtown hub for the entire central
Indiana greenway system.

At the center of Indianapolis is Monument Circle, a traffic circle at the
intersection of Meridian and Market Streets, featuring the Soldiers' and Sailors'
Monument. Similarly, a five-block plaza at the intersection of Meridian and
Vermont surrounds a large memorial dedicated to Hoosiers who have fought in
American wars. Other monuments and historical attraction include: Indiana
World War Memorial Plaza, Medal of Honor Memorial, USS Indianapolis Memorial,
Landmark for Peace Memorial, American Legion National Headquarters, Crown
Hill Cemetery, Lockerbie Square, Indianapolis City Market, Madame Walker
Theatre Center, Obelisk Square, and the Scottish Rite Cathedral.

The labels of The Amateur Sports Capital of the World and The Racing Capital of
the World have both been applied to Indianapolis. Headquarters of the National
Collegiate Athletic Association (NCAA), the main governing body for U.S.
collegiate sports, is located in Indianapolis, as is the National Federation of State
High School Associations. Indianapolis is also home to the national offices of
USA Gymnastics, USA Diving, US Synchronized Swimming, and USA Track &
Field. The city has hosted the Final Fours for the both the Men's and Women's
NCAA Division I Basketball Championship several times, and is scheduled to
host both every five years. Since 2008, Indianapolis has hosted the Big Ten
Tournament at Conseco Fieldhouse. Indianapolis hosted the Indianapolis Tennis
Championships through 2009, one of the many tournaments which are part of the
US Open Series. In January 2010, Indianapolis became one of 18 host cities
selected by the United States Soccer Federation for the 2018 and 2022 FIFA
World Cup bids. On May 20, 2008, the city was awarded the rights to host Super
Bowl XLVI.

Indianapolis is home to the Indy Racing League's offices and many of its teams.
IMS hosts three major motor racing events every year: the Indianapolis 500, the
Brickyard 400, and the Red Bull Indianapolis Grand Prix. The Indianapolis Motor
Speedway (IMS), located in Speedway, Indiana, is the site of the Indianapolis 500-
Mile Race held each Memorial Day weekend on a 2.5 miles oval track. The Indy
500 is the largest single-day sporting event in the world, hosting more than
257,000 permanent seats (not including the infield area). The track is often
referred to as the Brickyard, as it was paved with 3.2 million bricks shortly after
its construction in 1909. Today the track is paved in asphalt, although a one yard
strip of bricks remains at the start/finish line. IMS also hosts the NASCAR
Brickyard 400. The first running of the Brickyard 400 was in 1994, and it is
currently NASCAR's highest attended event. Additionally, the city of Indianapolis
has 5 professional sports teams in football (NFL-Colts), basketball (NBA-Pacers
and WNBA-Fever), rugby (USA Rugby-Impalas), and hockey (USHL-Ice).  

Economic forces are the fundamental relationships between current and
anticipated supply and demand and the economic activities in which the
population participates in order to satisfy its wants, needs, and demands through
its purchase power.  

The chart below indicates the employment by sector for both the state and the
MSA per the US bureau of labor.  As shown the overall employment composition
for both the MSA and state are similar and diverse indicating a stable economic

The largest industry sectors by employment in Indianapolis are manufacturing,
health care & social services, and retail trade. Compared to Indiana as a whole,
the metropolitan area has a lower proportion of manufacturing jobs and a higher
concentration of jobs in wholesale trade; professional, scientific, and technical
services; and transportation and warehousing. Accordingly, Indianapolis is a
prime center for logistics and distribution facilities. It is home to a FedEx hub and
distribution centers for companies such as, Foxconn, Finish Line,
Target, and CVS Pharmacy.

The Indianapolis MSA is also corporate headquarters to many of Indiana's largest
and most recognized companies, including pharmaceutical manufacturer Eli Lilly
and Company, wireless distribution & logistics provider Brightpoint, health
insurance provider Wellpoint, Republic Airways Holdings (including Chautauqua
Airlines, Republic Airlines, Frontier Airlines, and Shuttle America), REIT Simon
Property Group, and retailer Finish Line, Inc. The U.S. headquarters of Roche
Diagnostics, Technicolor SA, Conseco, First Internet Bank of Indiana, Peerless
Pump Company, Dow AgroSciences, Emmis Communications and Steak 'n
Shake are also located in Indianapolis. Other major Indianapolis area employers
include Clarian Health, Sallie Mae, Cook Group, Rolls Royce, Delta Faucet
Company and General Motors.

Environmental forces are both natural and manmade forces that influence real
property values. Some environmental forces include climactic conditions,
natural barriers to future development, primary transportation systems, and the
nature and desirability of the immediate areas surrounding a property.  

Indianapolis is a major transportation and distribution hub for the Midwest. As the
most centrally located of the largest 100 cities in the United States, Indianapolis
is within 650 miles of 55 percent of all Americans, or more than 50 million
households. The city is served by four interstate highways, six railroads, an
international airport, and a foreign trade zone. Three ports serve the entire state
and are all within a three hour drive of Indianapolis.

Several interstates serve the Indianapolis area. Interstate 65 runs northwest to
Gary, where other roads eventually take drivers to Chicago, and southward to
Louisville, Kentucky. Interstate 69 runs northeast to Fort Wayne, Indiana, and
currently terminates in the city at I-465, but will eventually be routed around the
city on 465 to the new extension of Interstate 69 towards Evansville. Interstate 70
follows the old National Road, running east to Columbus, Ohio and west to St.
Louis, Missouri. Interstate 74 moves northwest towards Danville, Illinois, and
southeast towards Cincinnati, Ohio. Finally, Interstate 465 circles Marion County
and joins the aforementioned highways together. In 2002, the interstate segment
connecting Interstate 465 to Interstate 65 on the northwest side of the city was
redesignated Interstate 865 to reduce confusion. The Indianapolis area also has
two other expressways; Sam Jones Expressway (old Airport Expressway), and
Shadeland Avenue Expressway.

The Indianapolis Public Transportation Corporation, known locally as IndyGo,
provides public transportation for the city. Central Indiana Commuter Services
(CICS), funded by IndyGo to reduce pollution, serves Indianapolis and
surrounding counties. Clarian Health operates a people mover connecting the
Indiana University School of Medicine, Riley Hospital for Children, Wishard
Hospital and IUPUI & Indiana University School of Medicine facilities at the north
end of the Downtown Canal with Methodist Hospital. Amtrak, the national
passenger rail system, provides a thrice-weekly service of the Cardinal to
Chicago, New York City, Philadelphia, and Washington, D.C. Indianapolis suffers
from numerous transportation issues, such as a lack of sidewalks in suburban
areas and a lack of adequate mass transit for a city its size. It is the largest US
city without a mass transit system such as light rail or subway. Plans are
underway to build a commuter rail system, as well as a light rail system being
proposed to go on Washington Street.

Indianapolis International Airport is the largest airport in Indiana and serves
communities throughout the state of the Indiana. The airport is home to the
second largest FedEx operation in the world and the United States Postal
Service Eagle Network Hub. The entire airport is a global free trade zone called
INZONE with 18 designated subzones. Indianapolis recently completed building a
new airport. The $1.1 billion project is the largest development initiative in the
city's history. The new Indianapolis Airport covers 1,200,000 square feet, and has
40 gates, a 145,000 SF baggage processing area, a 73,000 SF baggage claim area,
a large pre-security gathering, and a concession space with both local and
national restaurants and retailers.

The hub of an extensive rail network, Indianapolis has a total of 26 rail corridors
in operation, and five key freight facilities. CSX and Norfolk Southern are the two
Class 1 operations, and the four shortlines consist of Indiana Railroad Co.,
Indiana Southern, Louisville & Indiana Rail, and Central Railroad of Indiana.

Governmental, political and legal actions at all levels have an impact on property
values. The legal climate of a particular time or in a particular place may
overshadow the natural market forces of supply and demand.  

Our review of the above data indicates that the Indianapolis metropolitan area
historically has had a strong economy, evidenced by a stable economic base,
low unemployment rates, and a growing population.  The area also features
numerous regional attractions and an excellent transportation system.  
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