Move Over Snow! The Forecast for Indy is a Hot One...in Real Estate
The IBJ ran an article just this week in which it detailed the sunny year predicted ahead for Indianapolis real estate. Developers and brokers alike are looking forward to an impressive calendar year, according to the article. Three major markets within the city are poised to succeed based on their data, and if you have an eye on investing, the IBJ says that retail, office, and industrial are where it's at this year.
Retail is expected to do well and with a variety of different retailers. Discount retailers as well as service retailers like beauty salons and nail salons should keep space occupied this year, according to one IBJ source. One interesting development is that the industry is seeing more medical providers opting for what would be retail space over traditional office space. Everyone from dentists to vets or family doctors is getting in on retail space usage. The IBJ noted that we could expect to see continued retail activity at bustling Saxony/Hamilton Town Center in Noblesville. Whitestown will also see a $50 million development with the Shoppes at Whitestown, which could open in late spring of this year.
Per the IBJ, office space will also continue to do well. Indianapolis is already a target for out-of-state investors who come here looking to seize on opportunity created by the market's low vacancies and higher rent. There hasn't been a lot of new office space developed over the last decade, keeping rent trending high. Market demands show that tenants want offices with options: it isn't enough to throw a fancy coffee machine in the break-room – these tenants want something apart from the norm, convenience with walkable distance, as well as indoor/outdoor fitness choices. As we wrote in a previous article, the city of Carmel is in a building boom and one of those developments will also be an estimated $20 million office building in the very heart of Carmel. Capitalizing on the city's perks, the new office space will offer easy access to the popular Monon trail as well as nearby shopping and dining.
Indy's industrial real estate is, by all accounts, sizzling. According to the IBJ, the hot industrial real estate market is buoyed by the ever-increasing demand for e-commerce as well as the convenience of the major FedEx hub. One source said that thanks to the nearby FedEx hub, the solid highway network, and the low cost of both labor and occupancy Indy is consistently viewed as a “core market” for institutional owners and investors. With a high demand for space as well as construction costs on the upswing, the IBJ article also quotes a source as saying moderate rental rate growth will be justified in 2018.
The IBJ points out that not all of the real estate scene is so rosy, and that owners have to figure out how to fill space left by businesses that have left large empty buildings behind – those like Gander Mountain, Marsh, and others in retail. Yet overall, the city has a fairly sunny forecast for the year ahead in a variety of markets – making the Circle City one to watch for real estate success in 2018.