2016 starts strong with positive absorption, declining vacancy
Indianapolis, IN – April 14, 2016 – Many office users in Indianapolis are still attracted to suburban Class A office space, particularly in the northern suburbs, which offer significant amounts of space, according to CBRE’s Office MarketView for Q1 2016. Indianapolis, like many U.S. metro areas, is seeing an increased demand for urban core office space. But this hasn’t diminished the appeal of the suburbs.In five of the last eight quarters, net absorption of Class A space in the suburbs has surpassed Class A space in downtown, bringing the vacancy down to pre-recession levels. In Q1 2016, about 87 percent of the net absorption was in the suburbs with 55 percent of that in Class A buildings. The Carmel submarket alone saw 110,992 square feet of new occupancy.
“The fundamentals for office demand in the Indianapolis market remain steady and the top performing submarkets (Carmel and Keystone) experienced a strong start to 2016,” said Nick Svarczkopf, vice president at CBRE’s Indianapolis office. “However, we may see a temporary break in rising rental rates as the completion of new build-to-suit construction projects begin to create pockets of vacancy in the northern suburbs. Continued steady demand, with little speculative construction should overcome this pause in climbing rates within the next 12 months.”
Other highlights from the report include:
- The overall vacancy rate declined to 15.9 percent, the fifth consecutive quarterly decline.
- Leasing activity was on par with the last five quarters with 12 leases signed for 10,000 sq. ft. or more. 80 percent of the leasing activity was in the suburbs.
- With about 1 million square feet of space requirements in the market for downtown and 1.5 million square feet for the suburbs, improving fundamentals are expected to continue in the near term.
CBRE’s Indianapolis office is a fully integrated real estate services firm in the State of Indiana and has been the city’s leader in commercial real estate services since its inception in 1981.
To speak to a CBRE professional about this report and other market trends, please contact Joe Ludwig at +1 513 369 1305 or joe.ludwig@cbre.com. Click here to download the full report.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
