Indiana’s office market is on pace for a historically strong year and one of the emerging factors is an unlikely source: the technology sector. "We’ve talked about that for a series of years, but we never saw it (technology) move the needle in commercial real estate," said Cushman and Wakefield Vice President of Research Jason Tolliver. "It’s changing dramatically now, where we’re seeing an increase in the number of tenants coming in from the tech sector and the amount of space they’re taking."
According to a report from Cushman and Wakefield, released this weekend on Inside INdiana Business Television, Indiana commercial real estate growth for the first three quarters of the year has surpassed total annual growth for any year of the current expansion. In fact, the statewide vacancy rate for all commercial real estate is now below pre-recession levels, according to the report.
After a bumpy recovery, the Indiana office market is enjoying strong gains. The Cushman and Wakefield report suggests the office market is on track to double annual absorption gains in 2014. In the third quarter, the statewide office market posted 415,000 square feet of net occupancy gains, pushing overall gains for the year to 1.15 million square feet, with Indianapolis and Fort Wayne leading the way.
Tolliver expects “a burgeoning tech sector to drive increased demand for office space,” in particular in central Indiana. Over the past two quarters, eight tech firms have committed to investing more than $70 million and adding nearly 1,500 jobs in the region.
Perhaps the most significant announcement came in August. San Francisco-based cloud services company Appirio Inc. announced plans to relocate its corporate headquarters to Indianapolis, investing $7.7 million and adding 400 jobs over five years.
Last month on Inside INdiana Business Television, Governor Mike Pence said over the past year, 56 tech companies have committed to creating more than 4,000 jobs statewide.