Q4 2021 Indianapolis Market Report
In Q4, Indianapolis office market’s recovery slowed, with negative net absorption, rising vacancy rates, and falling rents from their previous improvements. This was the result of large tenant move-outs throughout the market. Recovery in 2022 will be slow for office space as companies continue WFH policies and “right-sizing” their office footprint or implementing a hybrid work schedule. In late 2021, overall subleases declined for the first time since early 2020 due to workers coming back to the office and new subleases being signed. The office market will continue to be a mixed bag but it is expected that office vacancy rates will climb in 2022.
Indianapolis industrial market continued to post positive metrics in Q4 2021. The labor market has proved resilient, seeing 12 consecutive months of job growth. The growing demand for e-commerce, third-party logistics providers and big-box industrial real estate is boosting Indianapolis industrial market fundamentals. The new construction pipeline is larger than ever as developers continue to expand the boundaries of the traditional industrial footprint by developing in virtually every direction to keep up with out-sized user demand.