by Dan Rafter
The best news about the Indianapolis CRE market? It’s strong not just in industrial — which has received the most press — but in most every segment today.
That holds true even for the most troubled of commercial segments. Jeff Merritt, vice president of commercial services for Colliers in Indiana, said that vacancy rates in the office market continue to drop in the Indianapolis area, both in the suburban and CBD submarkets.
Merritt said that the office market is showing steady improvements in the more popular suburban markets, places like Fishers and Carmel on the north side of the Indianapolis region. What’s behind the improvement in this sector? Merritt points to a local unemployment rate that is falling and an influx of tech companies targeting Indianapolis.
“The suburbs are certainly doing better. And the CBD is starting to come back, too,” Merritt said. “We are seeing definite improvement in the office market.”
Of course, the multi-family market is thriving in Indianapolis, as it is in markets across the Midwest. Renters are flocking to urban areas, and Indianapolis is benefiting from this trend today, said Michael Wernke, senior vice president of investment and multi-family services with Colliers’ Indiana region.
“People need a place to live, and downtown Indianapolis is a pretty robust market right now,” Wernke said. “There are some definite hot areas here for multi-family.”
The multi-family market, though, faces the same question facing the city’s industrial market: Will there be enough demand to fill all the new multi-family developments that have sprung up in the Indianapolis market?
Michael Drew, also a senior vice president of investment and multi-family services with Colliers, says that the demand is there for these new units. He said that about 3,500 new apartments have either been recently delivered or are under construction in the Indianapolis market.
Drew doesn’t think that the owners of these buildings will struggle to fill them with tenants.
“The young professionals want to live downtown,” Drew said. “The empty nesters, they want to live downtown, too. They are increasingly inclined to sell their suburban homes with all that maintenance and upkeep and head downtown to an apartment. We are seeing many examples of that happening.”
And as multi-family improves, so does the retail market in Indianapolis. Greg Smith, vice president of retail services with the Indiana region of Colliers, said that rising consumer confidence, higher employee wages and a falling unemployment rate have all combined to provide a boost to the city’s retail market.
As in many Midwest markets, the hottest retail segment in Indianapolis remains the grocery segment. Giant Eagle is entering the Indianapolis market, planning a store in the suburb of Carmel.
“Retail growth is going to continue to boom,” Smith said. “Our whole team feels that way.”