Nov 29, 2023 - News

Indianapolis can't build enough offices

A blue sign points the way to businesses inside the Stutz building in downtown Indianapolis.

The Stutz building in downtown Indianapolis brings office tenants close to shops, restaurants and gathering spaces. Photo: James Briggs/Axios

More than a decade after the luxury apartment boom made renting cool, developers are applying the same script to offices.

Why it matters: The companies most desperate to resume in-person work are competing to lease limited space in areas where employees want to be.

State of play: New office projects on Mass Ave., in Midtown Carmel, the Nickel Plate District in Fishers and Keystone Crossing are fully leased, with waiting lists, even as landlords are turning out lights in old towers in Indianapolis' central business district.

Between the lines: The one weird trick convincing workers to give up remote work is creating new offices that feel like home, but better.

  • That means eye-catching amenities straight out of Silicon Valley, such as games and free drinks, yet also more subtle features including lots of natural light and cozy outdoor spaces.
  • Most of all, new office construction is targeting something most people can't get at home: easy walking access to shops and restaurants.

Of note: Indianapolis is especially ripe for the high-end office trend because below-average commute times make leaving home more palatable for workers here than in other cities.

Zoom in: The Bottleworks District on Mass Ave. once included plans for apartments, but developer Hendricks Commercial Properties scrapped housing after seeing virtually infinite demand from businesses wanting to set up shop in Indianapolis' trendiest area.

  • Bottleworks already has filled 100,000 square feet of offices with tenants including the Lumina Foundation, Insight Global and the Richard M. Fairbanks Foundation.
  • Hendricks plans to add another 300,000 square feet of offices to the campus by 2027.

What they're saying: "Offices are starting to do what hotels have done for years, everything from music to scent programs," Rich Forslund, an executive vice president for Colliers, who handles office leasing for Bottleworks, tells Axios. "Think Westin, where when you walk in you're going to have a signature scent."

  • "There's sort of an arms race within the office world, amenitizing properties, trying to come up with unique things, whether rooftop patios, tenant lounges (with) foosball tables, fitness centers, mothers' wellness rooms — those types of things."

The intrigue: The Stutz building in downtown Indianapolis is testing whether a campus loaded to the gills can succeed despite its relatively isolated location bounded by Senate and Capitol avenues and 10th and 11th streets.

  • It's one of the hottest properties in town for office leasing, as well as retail, with Cafe Patachou, Amelia's Bakery, a car museum and spaces for artists already open.
  • "It'll be an interesting case study of, if you create enough in one site, it doesn't matter where it's located," Matt Waggoner, a senior managing director for commercial brokerage JLL, tells Axios.

The bottom line: Employers are finding that splashy new offices are the best way to win the post-pandemic tug-of-war over remote work.

  • "Tenants don't just want a slightly updated version of what they had," Waggoner said. "They want a compelling magnet to get their employees excited."

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