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Market Report

Indianapolis Office Investment Forecast

2020 Outlook

Subdued Development Preserves Low Vacancy; Investors Follow Tech to the Suburbs

Strong pre-leasing and technology expansion maintain tight conditions. Robust demand for office space will be met with limited deliveries this year, pushing vacancy downward. Less than 600,000 square feet of inventory is scheduled to be finalized in 2020, representing a steep decline from the peak just two years ago. Of the projects coming online, over 75 percent of the space is pre-leased. The initial phase of Infosys’ 125,000-square-foot campus is the largest development slated for 2020. Future phases will add an additional 675,000 square feet, with the company planning to employ 3,000 workers upon finalization. This project should be a catalyst for more construction in the airport area in the future. Infosys’ commitment to Indianapolis portrays the broader trend of technology corporations steadily moving into the market and expanding. This will create a tailwind in office absorption going forward. Tenants are often seeking strategically located spaces that give them a competitive advantage in hiring skilled labor amid record-low unemployment. Suburbs north of the core with convenient access to Interstate-465 are garnering their attention and should outperform over the long term.

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