Apr 29, 2024 - News

Indy's office vacancy rate is up. Here's why it shouldn't get you down.

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Illustration: Tiffany Herring/Axios

Office vacancy rates in Indianapolis have climbed to new heights, but experts say the numbers don't tell the entire story.

Why it matters: The high vacancy rates reflect a downtown that has struggled to fully bounce back after the pandemic, but signs of life in Q1 — in addition to Indianapolis being a hot spot for tourism over the last few months — suggest that downtown Indy has found its footing.

The big picture: Throughout 2023, the entire country saw office vacancy approach levels not seen since the savings and loan crisis of the 1980s.

Zoom in: Between mid-2022 and mid-2023, Indianapolis office vacancy jumped from 20.1% to 23.7%, per commercial brokerage JLL. It now sits at 24% for the first time.

Yes, but: Mike Cagna, senior research manager for JLL, says the vacancy rate appears to be peaking.

  • "In fact, had it not been for RCI vacating 219,000 square feet at its West Carmel Operations Center this quarter vacancy would already be trending down," Cagna said.

Plus: Some big first-quarter wins aren't yet showing up in the local numbers, such as SomeraRoad closing a deal to bring the headquarters of specialty products manufacturer Calumet to the Stutz.

  • The signing of the 52,000-square-foot lease will see Calumet move 200 employees from the northwest side to downtown Indianapolis.

What's next: Cagna is optimistic about the rest of 2024.

  • "Indianapolis has the necessary ingredients to see occupancy growth throughout the remainder of 2024," he said.
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