IRR-Indianapolis Mid-Year Viewpoint 2015 Local Market Report - Office
Overall, the Indianapolis MSA office market was stable over the past six months. Absorption was positive over the last two quarters, but the rate of absorption has slowed in the past four quarters. Overall vacancy levels and asking rents have generally remained stable over that period. Primary northern suburban submarkets continue to outperform the CBD and secondary market areas. The strongest suburban office markets continue to be the Carmel/North Meridian, Keystone Crossing, and the Northeast/Fishers submarkets.
Occupancy gains have primarily taken place in these stronger suburban submarkets. This in part is driven by population and workforce expansion in the suburbs, particularly in Hamilton County. Additionally, a limited amount of new office space has been completed in the past two years. Over that period there has been a less than 2% increase in overall office space. The most significant new development in the CBD is the Cummins office tower. The $25 million project includes a 10-story office tower with 10,000 square feet of retail space with completion scheduled for late 2016.
A major development in the northern suburbs is the Hat World headquarters. Construction on this 150,000 square foot headquarters project is underway in Creekside Corporate Park in Zionsville. Over the next year vacancy and rental rates are expected to improve in the CBD, as well as other primary submarkets, assuming continued improvement in general economic conditions coupled with the limited amount of new office space being completed.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.