Leasing velocity has increased in each of the last four quarters amid recovering economic conditions and investors remain high on Indianapolis.

1. Job growth/loss by sector (12-month change) | Indianapolis
Source: JLL Research
Leasing activity by size
Source: JLL Research
Sales volume $ by submarket
Source: JLL Research
Local unemployment on the decline
The Indianapolis unemployment rate lowered substantially since April and
currently sits at 4.3 percent according to the most recent data available from the
Bureau of Labor Statistics. This is the lowest unemployment has been in seven
years. An increase in private sector jobs contributed to this reduction in local
unemployment. The most substantial monthly gains among office sectors
occurred in the Professional and Business Services sector (3,200 new jobs). The
May jobs report is welcome news and signals that growth is back on track after a
slow start to the year.
Leasing activity on the uptick
Leasing velocity has increased in each of the last four quarters amid recovering
economic conditions. Already this year we have seen nearly 40 signed deals in
excess of 10,000 square feet. While more than half of these deals have been
renewals, the amount of new leases and expansions are on the rise. While this
activity has yet to bear out in the statistics, it’s important to note that several of
the deals signed during the first half of 2015 have yet to take occupancy. Also
noteworthy is that several of the larger signed deals occurred just outside of the
statistical tracking area or in untracked single-tenant buildings and, therefore, do
not show up in the absorption and vacancy calculations.
Investors remain bullish on Indianapolis
Indianapolis office properties continue to be in high demand among investors. To
date, seven office sales greater than 50,000 square feet have closed this year for
a total sales volume of almost $127 million. The most recent transaction was
I.M.C. Diversified, Inc. purchasing Castleton Park from True North Management
Group. Castleton Park is comprised of approximately 1.1 million square feet of
primarily Class B office and flex product on the northeast side of Indianapolis.
The park was 85 percent occupied at the time of sale. Investor interest and
activity is expected to remain high. Indianapolis offers a very favorable business
climate that provides an excellent opportunity for investors to achieve long-term
rental growth.
Market fundamentals improving
2,257
Office Insight
Indianapolis | Q2 2015
31,907,665
Total inventory (s.f.)
-101,330
Q2 2015 net absorption (s.f.)
$18.83
Direct average asking rent
222,720
Total under construction (s.f.)
17.2%*
Total vacancy
-139,035
YTD net absorption (s.f.)
7.3%*
12-month rent growth
70.7%
Total preleased
*Significant alterations to our tracked inventory and methodology were made in the first quarter, rendering statistical results that diverge from the
recent historical trend.
0
100
400
1,100
1,200
1,600
1,900
3,400
4,700
14,200
0 4,000 8,000 12,000 16,000
Information
Government
Financial Activities
Educational & Health Services
Professional & Business…
$4,200,000
$14,300,000
$42,376,728
$66,000,000
North Meridian/Carmel
Northwest
CBD
Northeast
9 4 25
-
100,000
200,000
300,000
400,000
500,000
30,000+ 20,000-29,999 10,000-19,999
Total leased Number of leases

2. Current conditions – submarket Historical leasing activity (s.f.)
Source: JLL Research Source: JLL Research
Total net absorption (s.f.)
Source: JLL Research
Total vacancy rate (%)
Source: JLL Research
Direct average asking rent ($ p.s.f.)
Source: JLL Research
510,000
725,000
226,056
53,847
-108,042
541,170
348,227
-38,913
233,769
-139,035-200,000
0
200,000
400,000
600,000
800,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015
$16.97
$17.59 $17.79 $17.87
$17.58
$16.84 $17.01 $17.11 $17.04
$18.83
$14.00
$16.00
$18.00
$20.00
2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015
11.0%
10.1%
15.1% 15.6% 16.0%
14.8%
13.8%
12.3%
14.1%
17.2%
0.0%
5.0%
10.0%
15.0%
20.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014 YTD 2015
Landlordleverage
Tenantleverage
Peaking
market
Falling
market
Bottoming
market
Rising
marketIndianapolis
Non-CBD
3,010,781
1,538,661 1,630,041 1,499,520
1,098,357
0
1,000,000
2,000,000
3,000,000
4,000,000
2011 2012 2013 2014 YTD 2015CBD
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