HEARTLAND SNAPSHOT, MAY 2007

Indianapolis Office Market

There is a lot of activity going on in the Indianapolis office market. It is currently experiencing an influx of large, upscale office development in the North Meridian/Carmel Corridor, along with sporadic office developments throughout other parts of the area. The development of medical office space is increasing and developers are pushing large mixed-use development projects, such as Anson and Saxony, as the future of commercial real estate.

Anson is a 1,700-acre project located just north and west of Zionsville, Indiana, that will incorporate many features similar to those of small-town Indiana. The developer currently plans to construct office and medical buildings ranging from 20,000 to 35,000 square feet. Downtown Carmel, Indiana, is getting a major facelift that will allow for more businesses to be in the center of the city; the project is called Carmel City Center.

Opus Landmark has undertaken several new projects including Opus Landmark at Meridian; a 106,150-square-foot office building located at 126th Street and West Carmel Drive in Carmel.

Sacramento, California-based Panattoni Development recently completed a 96,000-square-foot medical office building project, Naab Road Medical Pavilion, at St. Vincent Health.  The firm is also in the process of developing a 142,800-square-foot, Class A office building on a 10.5-acre land site, which was formerly owned by Conseco. The project, City Center at Penn Office Plaza, is located on the corner of City Center Drive and Pennsylvania Avenue in Carmel.

Major leases in the market include Administar Federal’s 183,893-square-foot deal in Castleton Park; a 133,409-square-foot lease for Midwest ISO at City Center Drive in Carmel; Anthem Insurance Cos.’ 93,769-square-foot lease within Landmark Center; Nelnet’s 61,576-square-foot deal at 8425 Woodfield Crossing Boulevard; and Principal Financial’s 58,000-square-foot lease within College Park Plaza. The FBI has announced that it will lease a three-building, 110,000-square-foot build-to-suit in Castleton on the corner of Interstate 465 and Allisonville Road by 2008.

The area office market has an overall vacancy rate of 12.5 percent for Class A office space. The Downtown submarket has the lowest vacancy rate in the market at 6.3 percent and the Indianapolis International Airport area is the highest at a 28.7 percent rate. Rental rates for the downtown and suburban submarkets range from $16.90 to $21.40 per square foot.

The city of Indianapolis is also planning major office and residential developments in the downtown area near the future home of the Indianapolis Colts, Lucas Oil Stadium, South Meridian Street and Interstate 65. There are also several teams competing for the former Market Square Arena site. The city of Indianapolis requires that a building there must have a minimum of 14 stories; the price of the 4-acre site is set at $6.175 million and bidding for the project began last month.

—  Samuel Smith II is the CEO of Indianapolis-based RESOURCE Commercial Real Estate.


©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.