The downtown Indianapolis skyline has changed significantly over the last year, most notably with the new signs at Salesforce Tower going up. Rents are also rising across Indianapolis’ Skyline due to strong tenant demand and increased investment.
“For the first time in 20 years, the Indianapolis CBD and Skyline has seen substantial rent growth,” says Managing Director, John Robinson. “The growing tech industry is driving activity with a millennial workforce looking to work and live Downtown.” Here are other things impacting the skyline this year.
The creative boomerang for downtown
In recent years, creative companies have been drawn to those nontraditional, creative spaces that are typically off the beaten path of the traditional Central Business District. But given a lack of available unique space and soaring rents for eclectic buildings, there’s a boomerang back to more traditional buildings in the Skyline.
A rising tide lifts all boats
Rents within the Skyline are still in record territory as tenants will pay more for the prestige of a Skyline address, and in some cases, much more. The pricier Skyline rents are exactly where you’d expect them to be: New York, Washington, DC, San Francisco and Boston. But it’s the Sun Belt cities where rents are growing the fastest. Rents in Nashville, Austin, San Antonio and Raleigh have surged in the past year.
Getting quieter on the construction front
Cranes and construction equipment have been a common sight within the nation’s Skyline for many years now. However, those sightings will soon be less plentiful. While there’s a healthy pipeline of office space currently under development—including more than 15.0 million square feet of office space expected to be delivered this year alone—construction is slowing down.
Buyers selectively target the Skyline
How much do investors love the Skyline? Let us count the ways. Skyline acquisitions were up by more than $1.2 billion in 2016. However, sales in the broader office market fell by nearly 10 percent. Investors are taking a defensive position on their Skyline acquisitions and that’s increasingly benefitting secondary markets. Foreign dollars are also making their mark on U.S. Skylines, with offshore capital buying more than 40 percent of all Skyline assets traded in the first quarter of 2017.
Check out the most recent Skyline report for Indianapolis data and skylines across the country!