Dan Meador, managing director of brokerage services in the Indianapolis office of Cassidy Turley, is optimistic on the future of commercial real estate in his city. The reason? He’s already seeing plenty of signs that commercial real estate activity in the Circle City is on the rebound.
Midwest Real Estate News: Are you seeing more commercial activity today in Indianapolis than you were last year or two years ago? Dan Meador: We are definitely seeing an uptick versus last year. I still think there is some leftover demand from as far back as 18 months ago helping to fuel this. In spite of some uncertainty in the economy, some companies out there are making decisions relative to their real estate needs. The industrial sector has been particularly strong this year.
MWREN: Why is industrial doing so well here? Meador: Indianapolis has always been a very good industrial market historically. It’s been mentioned many times, but it has fabulous infrastructure and it sits within a day’s drive of nearly 75 percent of the country’s population. That’s why Amazon has taken down 1.8 million square feet in Indianapolis for a distribution center here. We are the second-largest FedEx hub in that company’s network. We handle a lot of international freight through Indianapolis. Indianapolis has one of the busiest airports in the nation after 11 at night because of FedEx.
MWREN: What about the other commercial real estate sectors outside of industrial? Meador: The other sectors are all holding their own. Office is treading water as it relates to absorption. There is very little new development on the office front. We are starting to see some companies, though, look for fairly significant blocks of space in our market. State Farm agreed to lease 90,000 square feet in the keystone submarket. So there is some glimmer of activity in that sector.
MWREN: What about retail? How is that sector performing? Meador: Retail is still very tough. Retailers are still loathe to do any type of significant expansion. That being said, there are some new concepts that are aggressively expanding in our market. The frozen yogurt franchises are growing here. Jack in the Box just made a new penetration in Indianapolis. Nordstrom Rack just opened in Indianapolis. There are some isolated incidents where we’ve seen some new retail expansion.
MWREN: What about the multi-family market? Is that strong in Indianapolis, too? Meador: The apartment market is solid. That’s always been a good market for investors. It looks like we are seeing a return of investors to our multi-family market. We’ve seen some significant apartment projects trade in the last 60 to 90 days. Our apartment specialist in the office suggests that a lot of interested buyers are now looking to make an investment in our market.
MWREN: Is there anything in particular about the Indianapolis market that sets it apart from other similarly sized cities across the United States? Meador: We are the state capital for Indiana. So we have a built-in safety net with a significant state government infrastructure here. And we have some fairly significant companies headquartered here. We have some up-and-comers here, too. That helps protect us somewhat during bad economic times. Indianapolis has also carfed out a nice niche as the sports headquarters of our country. We now will host the Big 10 football championship. We have the next Super Bowl here. This all helps with tourism.
