Tim Norton is optimistic about the future of the commercial real estate market in Indianapolis. That’s good news. He’s executive vice president of Summit Realty Group, and he knows the market in this Midwest city as well as anyone.
Norton recently spoke with Midwest Real Estate News about how Indianapolis has survived the downturn and about its prospects for a stronger recovery.
Here is some of what Norton said:
A positive outlook: Absolutely we are seeing improvements in Indianapolis. We have been fortunate in that we’ve been a bit insulated. There’s been much more volatility on the east and west coasts. In 2011, our leasing activity in the office market was up 37.9 percent when compared to 2010. It is trending higher and higher. That is a positive sign. In addition to that, there are good signs for sales, too. That figure had been troubling the last few years. But investment sales activity last year doubled what it did in 2010 in our market.
Consistency is the key: Our recovery has been slow and steady. It’s been consistent, more stable. It’s a change from the crazy growth so many markets have experienced in the past.
Crossroads to the Midwest: We do not have the wide fluctuations in our market. That is both good and bad. But Indianapolis right now is a growing, thriving community. The city has a lot of amenities to offer. We are the crossroads to the Midwest. We are a central hub for shooting up to east and west coasts and other parts of the Midwest. This is demonstrated when you look at the bulk warehouse facilities. There’s been a huge demand for those facilities in the Indianapolis area.
Spec buildings on the horizon? It’s good to hear that people are talking about an increase in demand again. There is some discussion that spec buildings will soon start again. You don’t hear that in very many markets today. That speaks to the strength of the area.
Outside concerns: There is some concern, though, that the financial markets will be too unstable nationally. That could upset our recovery. You look at the unrest nationally, it has made business owners more cautious. Right now we are seeing the pent-up demand. Business owners were so adverse to risk for so long, we are now finally seeing this past year that people are letting loose a little bit. They are starting to make movements. Businesses can only continue for so long before they have to increase in size and start marking hard-risk choices.
Medical on the rise: One of our busiest areas right now is medical. That sector is consistently on the rise. This year, we anticipate that multi-family sales and investments will be very strong, too.
Office market hopes: We continue to see positive absorption in the office market. I can’t sit here and tell you that it will double, that the crisis is over. What I can say is that we have been very consistent and very stable in office. I expect that to continue. We will see vacancy rates continue to trend down. The asking rents will rise.