Kevin Gillihan, Vice President, JLL
The northeast Indianapolis submarket used to be contained to the Castleton area, however, growth in the last two decades has pushed the boundaries considerably – not only on the map but also in the buildings going up. For example, prior to 2000, the majority of the office inventory in the northeast Indianapolis was located south of 96th Street. With the expected completions this year, the majority of office inventory will now be north of 96th Street, reaching into Fishers and Noblesville. Why is the office inventory marching northward?
The Castleton area and areas around 96th Street have simply run out of space. Not only that, it’s older inventory and renovations can be costly. In today’s office culture, many organizations are moving to open concept spaces, co-working spaces and more employee-friendly buildings. Older buildings don’t typically meet those needs without some renovations. Newer buildings are constructed with that in mind as well as the amenities that employees desire. New buildings also tend to bring higher rents.
The cities can provide incentives to lure businesses to the area. This is even more true now that Fishers has become a city, giving it more allowance to encourage development. Indiana already ranks as high as 8th for fostering one of the best tax climates for businesses. Cities like Fishers and Noblesville can offer additional incentives to build there.
The demographics in the northeast, Fishers especially, are ideal for office development. With over 100% population growth since 2000 and there is a reasonable number of people in the area that are highly educated and want to work close to home. The live-work-play mentality is penetrating areas outside of the CBD. With the interest in continuing to encourage the development of restaurants and attractions in Fishers, the area is poised to continue the growth trend.
It’s clear the northeast is in the midst of an office development boom that continues to move further out. Will the growth continue up the I-69 corridor as it has historically or will Noblesville offer enough incentives to bring new development up IN-37? As office development continues to move out into the suburbs, there are challenges. Office development could compete with new housing development as space becomes a premium. Fishers is also mindful of how development is impacting the city’s plans and remains very strategic in allowing who and what to be built.