Indianapolis office market continues to grow, but space givebacks loom on the horizon

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The Indianapolis office market is continuing to ride this wave of positive growth and absorption thanks to the new construction that was delivered this quarter as well as healthy activity in the CBD, but space givebacks may be halting the ride. Still, the Indianapolis office market is poised to finish the year with occupancy growth for the 8th time in the past 10 years. See more of a few key performance indicators from around the metro area. Want to know about a specific submarket’s performance? Download the Q3 report from JLL’s Indianapolis research team, Brianna Marshall and Mike Cagna.

Net Absorption

The Indianapolis market continued to grow in the third quarter, bringing YTD net absorption to nearly 100,000 square feet. The completed construction of the new Stanley Security headquarters in Fishers and BlueSky Technology building in Noblesville largely attributed to this growth.

Vacancy Rates

Metro total vacancy continues to decrease, dropping 30 basis points since midyear. CBD Class A has experienced an even greater decline. It has fallen by nearly one full percentage point since last quarter, but also almost two percentage points since the start of the year.

Asking Rents

North Meridian, CBD, and Keystone continue to command the highest asking rents in the market. Conversely, among the major submarkets, Northwest offers the lowest rates even after raising Class A rates this quarter.

Construction Pipeline

On the heels of The Marietta on Mass delivering last quarter, two more buildings came online in Q3. Nearly half a million square feet remain under construction with the majority expected to deliver by year-end.

Sales Activity

Investors continue to be invest in the Indianapolis office market. Six more acquisitions closed this quarter, four of which occurred in the Northwest. Looking ahead, expect more activity in the CBD as several properties are will to trade hands or hit the market.

For more details and stats, download the Q3 report from JLL’s Indianapolis research team.

 

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