Here We Are
Even though we’re almost two months removed from Amazon’s announcement that Indianapolis wouldn’t be host to their second headquarters project. The impact of the process and outcome will reverberate through Indianapolis for the foreseeable future.
The debate as to whether Indianapolis is better off without Amazon coming to town will also no doubt continue into the future as many believe the sacrifice to woo the giant tech company was simply too great a price to pay and other feel that any public support for the project (cities are giving billions in public funding to Amazon) would be offset by the future income of jobs and the resulting need for additional amenities to support such rapid growth. Several well known economists stood against the incentives, created a petition pleading the cause for cities to do what Indianapolis did, and not bow to down to massive incentive packages.
Had Amazon selected Indianapolis, a certain amount of challenges would have been dealt with, mainly the construction of housing, especially apartment housing.
According to HotPads, a division of Zillow as cited in THIS article, they had anticipated that Indianapolis would have needed to
“add 1,960 apartment units for every year of Amazon’s anticipated seven-year build out to keep pace with the additional employees who would relocate to the city.”
That’s a significant pace to set for new construction and management of residential properties. Developers of course would be more than happy to put their money into that development ring as occupancy would all but be assured as the population soared. This of course also would have meant an increase in certain retail sectors, as restaurants, grocery stores, and more inevitably follow population growth.
The “Now What”
Even though Amazon HQ2 isn’t going to open in Indianapolis, the process cast a light on the areas that Indianapolis needs to improve further upon. In this instance, the technology sector, specifically the employee base needs to grow.
According to this Indianapolis Business Journal Article, this is the are that Indianapolis still needs the most growth in. According to the US Department of Labor Statistics, Indianapolis is the 6th fastest growing city for tech jobs. The downside is that they’re 34th with just a shade over 31,000 jobs available. That’s far below the available jobs top cities that Amazon was looking at, and half of what Austin, Texas, another burgeoning tech town boasts.
What does this mean for the Indianapolis Commercial Real Estate Scene?
It means that there is more room to grow, and we should see that happen in the next few years. As Indianapolis continues to grow, the needs for industrial, office, and residential space will continue to rise. Re-purposing old and outdated spaces into new tech friendly spaces can be a tall task, but one that has to occur for the city to continue it’s ascent.
The Mixed-Use format isn’t likely going anywhere either as more people move back to city centers and want to live, work, and play together without long commutes, or even needing more than Uber or public transport.
In the process, redevelopment becomes an intriguing option for owners who have older buildings in their portfolio they want to keep and keep full. It wouldn’t be shocking to see new development as needs rise, and land pricing generally is favorable in the Indianapolis area compared to the national rates.
Indianapolis is still positioned to see great growth, even without a shiny new HQ2 building sitting in city limits. If you’re looking at a city for investment, Indianapolis is a great option. Our report from earlier in the year shows strong markets in Office & Industrial. You can read it HERE. We discuss several shifts and areas of opportunity that are either available now, or will be coming into view in the next few years.
There might not ever be a better time to get into the commercial real estate markets in Indianapolis.