But even though the industrial market has garnered a great deal of attention, the office market here is also doing well. Growth is accelerating faster than at any other time in the last 25 years, according to managing director David A. Moore.The market posted 8,391 square feet of positive absorption in the final quarter of 2016. That may be a small number, but this marks the 11th consecutive quarter in which the market posted positive net absorption.

And the big news in 2016 was Salesforce.com's 200,000-square-foot lease at the former Chase Tower, a move that has the potential to help make the CBD, long overshadowed by the suburbs, a real destination for office tenants. Market Tower is another that has gone through a transformation to unleash higher leasing performance. Investors have started showing a lot of interest in Indianapolis properties, as new privately funded and entrepreneurial landlords make planned capital investments.

“White collar employment is driving absorption of office space,” says Moore. “Traditional things like accessibility, proximity to high quality schools, shorter drive times … are drivers for the suburban market. Amenities, restaurants, walkability and “live-work-play” are drawing many companies to our downtown market …. especially those that hire a large percentage of millennial-aged employees.”

INDIANAPOLIS—Cushman & Wakefield's annual State of Real Estate^® Indianapolis event has become one of the most important occasions of the year for anyone interested in the regional economy. This year it was bigger than ever, with more than 1,200 attendees gathering last week at the Murat Theatre in Old National Centre. IN Governor Eric Holcomb spoke at the event, which highlighted the overall strength of the metro region's industrial, office, multi-family and retail sectors.

The industrial market may be the most important sector the region, as it has come to play a key role in the nation's product distribution chain. According to senior director Bryan W. Poynter, it shattered records in 2016, withnet absorption of 8.3 million square feet. Additionally, 11.2 million square feet of new leases were signed, which is more than the 2014 and 2015 totals combined. The market saw its lowest vacancy rate in 36 years at 3% – down from 5.8% at the end of 2015.

“The industrial market was tight heading into 2016 and tightened even further throughout the year as historic leasing demand dramatically outpaced new supply,” he tells GlobeSt.com. After no new buildings were delivered in the third quarter of 2016, developers produced four newly constructed industrial warehouses totaling 635,000 square feet in the fourth quarter.

Poynter expects developers to deliver another twelve speculative projects totaling 6.3 million square feet in 2017, “but considering that vacancy is lower than its lowest point in the last cycle, and tighter than any time since the early 1980s, the market desperately needs space to bring supply and demand fundamentals more in balance. If you look at what is scheduled as a percentage of inventory, there is still opportunity for new construction.”

But even though the industrial market has garnered a great deal of attention, the office market here is also doing well. Growth is accelerating faster than at any other time in the last 25 years, according to managing director David A. Moore.The market posted 8,391 square feet of positive absorption in the final quarter of 2016. That may be a small number, but this marks the 11th consecutive quarter in which the market posted positive net absorption.

And the big news in 2016 was Salesforce.com's 200,000-square-foot lease at the former Chase Tower, a move that has the potential to help make the CBD, long overshadowed by the suburbs, a real destination for office tenants. Market Tower is another that has gone through a transformation to unleash higher leasing performance. Investors have started showing a lot of interest in Indianapolis properties, as new privately funded and entrepreneurial landlords make planned capital investments.

“White collar employment is driving absorption of office space,” says Moore. “Traditional things like accessibility, proximity to high quality schools, shorter drive times … are drivers for the suburban market. Amenities, restaurants, walkability and “live-work-play” are drawing many companies to our downtown market …. especially those that hire a large percentage of millennial-aged employees.”