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Market Report

Indianapolis Multifamily Market Report

2024 Investment Forecast

Class A Apartment Demand Elevated;
Core Neighborhoods Remain a Target for Investors

Record supply concentrated in Carmel as downtown popularity grows. The local CBD vacancy rate entered 2024 below its pre-pandemic measure, an uncommon occurrence for most major U.S. metros. Renter popularity here is partially the result of improvements to office occupancy as tenant needs for such spaces showed positive momentum entering the new year. Amid robust renter demand, supply-side pressure was substantial here last year and resulted in vacancy lifting roughly 100 basis points. This should temper in 2024, however, as the local pace of development slows dramatically and directs more renters to existing units. Conversely, the Carmel-Hamilton County area will experience unprecedented inventory growth of more than 10 percent. Nearly half of the metro’s record delivery slate will complete in the submarket, likely applying upward momentum to local concession use. On a market level, notable luxury apartment demand has stood out. Entering 2024, few major U.S. metros other than Indianapolis recorded segment vacancy in line with, or below, their 2019 measures. This trend was prominent in Carmel, warranting its volume of construction, though its pace of additions still presents challenges.
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