by Dan Rafter
The Central Business Districts of cities across the Midwest are hot, with the number of leases, sales and new developments continuing to rise in the centers of metro areas.
The reason? People increasingly want to live in the center of urban areas. Just look at the growing number of multifamily buildings rising in such cities as Cleveland, Detroit, Chicago and Minneapolis. And as new residents flood downtowns, retailers, restaurants, entertainment options and office space follows.
This can be seen in the fourth quarter commercial real estate report recently released by JLL for Indianapolis. One of the takeaways of this report? Commercial activity is soaring in Indianapolis’ CBD.
According to JLL, nearly 170,000 square feet was leased in 2016 by tenants who were new to the city’s CBD. That number sounds impressive because it is; The square footage is higher than during the past two years combined.
As more companies look to relocate from the suburbs to downtown Indianapolis, it is little surprise that the CBD posted the highest level of net absorption in the Indianapolis market during 2016. Expect this trend to continue, too, as almost 150,000 square feet in active requirements of current suburban tenants are looking to move downtown.
Why are companies moving to downtown Indianapolis?
First, companies in the region are doing well. They are growing. JLL reports that of the companies that have downtown, more than 75 percent grew their footprint to accommodate a growing staff and increasing space needs.
At the same time, prime suburban submarkets such as Keystone and Carmel have boasted low vacancy rates for years. Space that is available downtown, then, becomes a solid alternative for companies looking to expand.
Then there is the matter of labor talent. Companies need to recruit top talent if they want to thrive. They can attract these workers by offering downtown office locations. That’s because downtown Indianapolis ranks as one of the most walkable cities in the country. It is also home to eclectic restaurants and plentiful public-transportation options.