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Diversity in Indianapolis office market
Indianapolis is enjoying solid activity across a number of office sectors.
Healthcare, business services, high-tech, financial services and law firms are the
most active segments currently in the market for office space within the
Indianapolis MSA. These five sectors accounted for more than 60 percent of the
leasing activity that occurred throughout the first quarter. They also account for
nearly half the tenant requirements still actively looking for office space in the
Indianapolis market.
Most active office sectors currently in the market
Source: JLL Research
New construction project breaks ground
New speculative office space is coming to the Keystone submarket. PK Partners
recently broke ground on River North at Keystone. The mixed-use project will
have a 100,000 square foot Class A office building, a 190-unit luxury apartment
complex and a parking garage. Roughly 30,000 square feet of the office space is
already pre-leased to the Gene B. Glick Co., a local real estate management and
development firm. Several other companies are interested in leasing space at
River North and it’s likely that the building will be at least 50 percent leased by
the time it is finished in 2016. Meanwhile, Duke Realty is wrapping up a 112,500
square foot expansion for Interactive Intelligence in the Northwest submarket.
Recent office completions
Source: JLL Research
Office investment activity continues throughout Indianapolis
Investors continue to eye Indianapolis as several significant transactions closed
this quarter. Onward Investors purchased College Park Plaza, a 181,000 square
foot, Class A building in the Northwest submarket. Meanwhile, the Century
Building, a 154,000 square foot Class B building located in downtown
Indianapolis sold to Hendricks Commercial Properties. Finally, Zotec Partners
purchased Fidelity Tower II, a 72,000 square foot Class B property in the North
Meridian/Carmel submarket.
Several office properties changed hands during the first quarter
Source: JLL Research
17.4% Total vacancy
-36,346 YTD net absorption (s.f.)
-36,346 Q1 2015 net absorption (s.f.)
7.0%* 12-month rent growth
212,500 Total under construction (s.f.)
67.0% Total preleased
Office Insight
Indianapolis | Q1 2015
Investment occurs in Indianapolis office market
$32 million Total dollar amount of office investment sales that
occurred in Indianapolis so far this year
*Significant alterations to our tracked inventory and methodology were made in the first quarter, rendering statistical results that diverge from the
recent historical trend.
21.6%
9.1%
7.1%
5.9%
4.4% Healthcare
Business Services
High-tech
Financial Services
Law firms
104,699
171,799 212,500
0
100,000
200,000
300,000
2013 2014 2015
Current conditions – market and submarket Historical leasing activity
Source: JLL Research Source: JLL Research
Total net absorption (s.f.)
Source: JLL Research
Total vacancy rate
Source: JLL Research
Direct average asking rent ($ p.s.f.)
Source: JLL Research
510,000
725,000
226,056
53,847
-108,042
541,170
348,227
-38,913
233,769
-36,346 -200,000
0
200,000
400,000
600,000
800,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015
$16.97
$17.59 $17.79 $17.87
$17.58
$16.84 $17.01 $17.11 $17.04
$18.96
$15.50
$16.00
$16.50
$17.00
$17.50
$18.00
$18.50
$19.00
$19.50
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
11.0% 10.1%
15.1% 15.6% 16.0%
14.8% 13.8%
12.3%
14.1%
17.4%
7.0%
9.0%
11.0%
13.0%
15.0%
17.0%
19.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Indianapolis Land
lord
leve
rage
Tenant leverage
Peaking
market
Falling
market
Bottoming
market Rising
market
Non-CBD
CBD
3,010,781
1,538,661 1,630,041 1,499,520
455,030
0
1,000,000
2,000,000
3,000,000
4,000,000
2011 2012 2013 2014 2015
©2015 Jones Lang LaSalle IP, Inc. All rights reserved. For more information, contact: Mike Cagna | +1 317 810 7358 | [email protected]
