Indianapolis Office Investment Forecast
Hardest Hit Submarkets Record Strongest Recovery;
National Buyers Drawn to Yield Potential
Leasing activity ramping up, but uncertainty and risk remain. The second half of last year showed a significant improvement in absorption when compared to challenging 2020 figures. Locales hardest hit by pandemic-induced tenant loss saw the strongest returns in leasing activity led by the Fishers submarket, where Quantigen committed to nearly 47,000 square feet and First Internet Bank completed its 120,000-square-foot headquarters. Additional northern suburbs including Carmel and the Meridian Corridor also recorded notable tenant gains followed by Downtown Indianapolis. Developers have followed demand into these suburbs, as most projects slated for 2022 completion are north of Interstate 465, with very little incoming space in the core. A wave of sizable speculative projects in the suburbs and uncertainty surrounding return-to-office plans by Salesforce and some of the metro's other largest employers, however, will prevent vacancy from tightening in 2022.