It might seem like it, but Amazon isn’t the only tech company out there. There are plenty of online retailers and tech start-ups that are moving into locations across the Midwest. And one city that’s attracting plenty of these companies? Indianapolis.
Brian Askins, executive vice president with the office team at the Indianapolis office of Colliers International, said that this influx of tech companies is providing a boost to the city’s office sector today.
And the positives from the tech migration aren’t limited to office, either. As more tech companies move into the city, so do more retailers and restaurants. As more tech workers flock to Indianapolis, the demand for multifamily units increases.
This tech wave, then, continues to increase activity in all sectors in the city.
“We are seeing homegrown tech companies that are expanding as well as new technology companies that are coming to the market,” Askins said. “This includes bigger national players like Infosys, companies that have made a significant investment in downtown. Then there are locally homegrown companies that are expanding. It’s an exciting time in the city.”
Infosys is a good example of the impact that tech companies are having in Indianapolis. The company broke ground on Nov. 16 on its U.S. Education Center at the former terminal at the Indianapolis International Airport.
Infosys is spending $35 million to turn more than 70 acres here into a training center and residential facility that will total more than 125,000 square feet and be able to house 250 people.
Construction on the first phase of this project is expected to wrap in 2020. Infosys will use the center to train its U.S. employees and provide training programs for clients. Infosys says that it expects to grow its Indiana workforce to 3,000 by the end of 2023.
Ravi Kumar, president of Infoysys, said that the company is looking toward the future with this project.
“We are excited to partner with Indiana to grow our U.S. presence by building out U.S. Education Center here, which is dedicated to continuous learning and incubating the skills of the future,” Kumar said in a statement.
Mario Rodriguez, executive director with the Indianapolis Airport Authority, said that the Infosys project will benefit the community surrounding the airport.
“This project is a prime example of the airport’s commitment to delivering public value to the community,” Rodriguez said in a statement. “This training facility will help to transform lives and connect people as Indy continues to attract tech talent by the plane-full.”
It’s not just tech companies that are expanding in Indianapolis, either. High Alpha, a venture studio and early-stage venture fund, in September announced that it would move its corporate headquarters to the Bottleworks District.
This is a big get for the district. The Bottleworks District is a $300 million, 12-acre mixed-use development in Indianapolis on the northeast end of Mass Avenue.
High Alpha is working with Hendricks Commercial Properties to move its headquarters, while Jenna Barnett, executive managing director with Newmark Knight Frank, represented High Alpha in the transaction. Matt Langfeldt and Rich Forslund of Colliers International represented Hendricks Commercial Properties.
High Alpha will make its move in the summer of 2020. The company will join the West Elm Hotel, food vendors at The Garage food hall and other retailers and restaurateurs at the Bottleworks site.
Kristian Andersen, partner at High Alpha, said that the Bottleworks site offered an ideal location for the company.
“We are thrilled to be affiliated with such a progressive and dynamic mixed-use development,” Andersen said. “We believe it will be the perfect location for us to continue serving entrepreneurs and contributing to the growth of the Indianapolis tech community.”
Askins with Colliers said that commercial real estate sales and leases are on the rise throughout the Indianapolis market. Direct net absorption in the third quarter of this year was up about 200 percent when compared to the same quarter a year ago, he said.
Downtown is especially busy today, Askins said. He pointed to the rise in new multifamily developments in the center of the city. Developers here are frequently converting outdated office space to multifamily properties, he said.
And this is a trend that isn’t showing signs of slowing.
“Developers haven’t put massive amounts of multifamily or hotel space into the market,” Askins said. “They are working at a more measured pace. As they convert outdated office space to new uses, that takes away from the total office inventory that is vacant. That’s been a help to our office market.”
The owners of the downtown office space that remains are getting more creative to attract tenants, Askins said. They are offering higher-end amenities, amenities that weren’t common in the Indianapolis office market just three to five years ago.
“The amenity bases are quite an improvement from years past,” Askins said.
An example? Office owners are adding tenant-centric lounges to their buildings at an increasing pace. These lounges give workers a place to go if they need to step away from their desks or cubicles for a few minutes each day.
Service-oriented amenities are on the rise, too, Askins said. More buildings are offering concierge services, for example.
“These can help the occupants of buildings simplify or enrich their lives,” Askins said. “They are a perk beyond the conference rooms and fitness centers. Everyone has those. To differentiate themselves, owners are adding service-based amenities, too.”
Owners are also emphasizing the walkability of downtown Indianapolis, Askins said. That in itself is a prime amenity. As the urban core of Indianapolis continues to attract new tenants, workers in the downtown area are finding a growing number of new restaurants and shops within walking distance, something that makes working in the city’s center a more attractive option.
This isn’t to say that only downtown Indianapolis is busy today. Askins said that the office market in the suburbs surrounding the city are seeing plenty of growth, too.
Suburban communities such as Carmel and Fishers have created their own walkable business districts that provide some of the same amenities workers can find downtown, though on a smaller scale.
“Some of these communities have redefined what the suburban office market can look like,” Askins said. “Companies that prefer the suburbs are gravitating toward these suburban walkable areas. There is a decent amount of leasing activity taking place in those areas right now.”