In the midst of economic recovery, many sectors are strengthening, particularly real estate. Jonathan Smoke, the chief economist for realtor.com, anticipates this overall growth translating into a 3 percent increase in home sales this year. The outlook has been even cheerier in Indianapolis.
At its "State of Real Estate" conference, the local office of New York commercial real estate brokers Cushman & Wakefield expressed a particular optimism for the city, highlighting industrial properties specifically.
"Industrial, in some ways, is the new retail," said Kenneth J. McCarthy, the company's principal economist.
The Indianapolis Business Journal reported that e-commerce is responsible for rising absorption rates. Despite 7.8 million square feet of new space last year, vacancy has remained at a healthy 5.8 percent. In 2015, tenants absorbed 5.3 million square feet in the metropolitan area.
"Despite any setbacks, the consensus is that Indianapolis is headed in the right direction."
Though not as prosperous as the industrial market, vacancy is also improving for office spaces, falling to 15.6 percent last year. Cushman & Wakefield credit this drop to changes in business culture. With more people working remotely, companies are leasing less space and developers are constructing fewer office buildings – a trend that has evened out occupancy. The company also noted that businesses driven by finding the best talent are focusing on location now more than ever.
Meanwhile, the Indianapolis apartment market is also growing, particularly in the downtown area, where new construction has boomed. The area has five projects in development totaling around $250 million, giving what IBJ calls a "shot in the arm" for the local construction industry.
Occupancy remains at 95 percent, though rents downtown increased by 6.5 percent. Citywide, the increase was only 2.2 percent. Apartment vacancy stood at 6.3 last year, compared to 8 percent nationally. Despite any setbacks, the consensus is that Indianapolis is headed in the right direction.