Market fundamentals improving
Leasing activity on the uptick
Leasing velocity has increased in each of the last four quarters amid recovering economic conditions. Already this year we have seen nearly 40 signed deals in excess of 10,000 square feet. While more than half of these deals have been renewals, the amount of new leases and expansions are on the rise. While this activity has yet to bear out in the statistics, it’s important to note that several of the deals signed during the first half of 2015 have yet to take occupancy. Also noteworthy is that several of the larger signed deals occurred just outside of the statistical tracking area or in untracked single-tenant buildings and, therefore, do not show up in the absorption and vacancy calculations.
Investors remain bullish on Indianapolis
Indianapolis office properties continue to be in high demand among investors. To date, seven office sales greater than 50,000 square feet have closed this year for a total sales volume of almost $127 million. The most recent transaction was I.M.C. Diversified, Inc. purchasing Castleton Park from True North Management Group. Castleton Park is comprised of approximately 1.1 million square feet of primarily Class B office and flex product on the northeast side of Indianapolis. The park was 85 percent occupied at the time of sale. Investor interest and activity is expected to remain high. Indianapolis offers a very favorable business climate that provides an excellent opportunity for investors to achieve long-term rental growth. Read more.
Click here to view all Q2 2015 Indianapolis Office Market Reports