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An Encouraging Look at the Indianapolis Real Estate Market

AUTHOR: Julie Berry   POST DATE:

In February, Cushman & Wakefield — a leading commercial real estate services firm in Indianapolis and around the world — held its 2017 State of Real Estate event, providing property owners, occupiers, and investors a look back at the previous year and a glance into the future.

My colleague, Leah Stanton, and I attended with hopes of hearing some positive signs within the Indianapolis real estate market. And we found just that!

Below are my somewhat abbreviated thoughts from this year’s event.

The State of Indiana’s Economy

Emcee Gerry Dick from Inside INdiana Business began the event by talking with Indiana Governor Eric Holcomb about some of the challenges and opportunities ahead for Indiana’s economy. Governor Holcomb sees big opportunities ahead for the Hoosier state.

He hopes to continue leveraging Indiana’s crossroads of America location, further establishing a long-term infrastructure system that makes Indiana unique within the U.S. He also sees Indiana as a leader in the tech sector, specifically pointing to Salesforce’s occupation of Chase Tower as a “lighthouse” within the innovation economy.

“It’s not just a beacon of hope, it’s a beacon of opportunity. And success breeds success. And so, what we need to continue to do is go out and hunt for those jobs,” said Holcomb. “The workforce that is available coming out of Notre Dame or I.U. or Purdue or Rose-Hulman — just think about that network of colleges or universities that we have here — we’ve got the ingredients for successful business.”

And where should Indiana businesses lean in the coming decades? For Governor Holcomb the answer is obvious.

“If you’re a company today, you have to be Ag plus Tech. You have to be Logistics plus Tech,” Holcomb forecasted. “You don’t need a crystal ball to look into to see what your fate will be if you’re not leaning into the technology front.”

Watch the full dialogue between Governor Holcomb and Gerry Dick below.


A Look at the Macroeconomic Environment

Next up, Kevin Thorpe, chief economist and global head of research at Cushman & Wakefield, offered his look at the macroeconomic environment before diving into the Indianapolis marketplace.

And in spite of Thorpe’s acknowledgement that his “economic forecast in 2014 was the least wrong of them all,” I still discovered the following intriguing notes from his presentation:

  • Because of several financial dips and turns in 2016, it could be argued that the global economy experienced a mild recession. And so now we’ve either reset a new expansionary cycle or added a few more years to the current cycle.


  • The next downturn — whenever that comes — won’t likely be as severe as what we experienced in 2007-2008.


  • Indianapolis stands as one of the most recession-resilient markets in the country. It’s seen as a relatively safe and stable market and becoming more desirable to investors.


  • Taking a look back at his Republican predecessors, President Donald Trump’s push for cutting taxes and increasing government spending will likely result in rising interest rates, increased deficits, and higher inflation — but also a stronger economy.


  • Also, the President’s stance on immigration poses the biggest risk to real estate, as half of the U.S. population growth stems from immigration.


  • Indianapolis shows momentum, specifically outpacing U.S. job growth over the past few years and into the next


Industrial, Office, and Retail Leasing in Indianapolis

Several Cushman & Wakefield staff members then took to the stage, exploring the Industrial, Office and Retail Leasing sectors within Indianapolis. Following are the most intriguing findings from these markets, with links to the full presentations included:


Industrial Leasing by Bryan Poynter and Jeff Castell:

  • 2016 was historic, with the lowest vacancy rates in 36 years


  • The industrial market in Indianapolis appears “bullet proof”


  • To continue trending positively, public transportation and mass transit will be key. We must get the workers to their jobs.



Office Leasing by David Moore and Jeff Castell:

  • Downtown year-end vacancy rates fell to 17.1 percent in 2016 from 21.4 percent in 2014 — a leasing velocity not seen in downtown Indianapolis for over 20 years — mostly due to renovations to several office towers.


  • Market Tower transformed its space to offer a seamless community between tenant space and the urban, walkable environment.


  • New landlords entered the Indianapolis area market — what Cushman & Wakefield call Landlords 2.0 — who are likely to be privately funded, more entrepreneurial, and long-term focused.


Retail Leasing by Jacque Haynes and Bill French

  • 2016 first year restaurant sales exceeded grocery store sales, contributing to 15 percent of all retail.


  • Indianapolis boasts several “cool streets” around the city, serving as an incubator for new retail concepts.


  • Square footage devoted to social/common space in buildings rose from 3 percent to 10 percent around Indianapolis.


Check out all presentations from the 2017 State of Real Estate, as well as photos from the event.

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