Tech industry growth boosting local office market, report says

Growth in the technology industry has become a big driver of activity in the local commercial real estate market, according to a new report by CBRE, which ranked Indianapolis fourth for tech-job increases among U.S. cities.

The real estate firm’s annual “Tech 30 Report”—which is based on U.S. Department of Labor statistics and the company’s proprietary research—found the tech labor pool in the Indianapolis metropolitan area expanded by 27.8 percent in 2015 and 2016, accounting for nearly half of all new office jobs.

That’s an improvement from the two-year period of 2013-14, when tech jobs grew by 25.7 percent.

The only cities that had higher job growth in 2015-16 were San Francisco at 39.4 percent; Charlotte, North Carolina at 31.6 percent; and Pittsburgh at 31.4 percent.

The next-best city in the Midwest was St. Louis, in ninth at 18.8 percent.

The report said nearly one-third of job commitments in Indiana this year through mid-July come from tech and tech-related companies, leading all industries.

Tech growth has helped spur a 6.5 percent rise in average office rents in Indianapolis since the second quarter of 2015, according to the report.

The most significant leases involving tech firms this year in the city include Infosys Ltd.’s’ 35,378-square-foot lease at OneAmerica Tower, RCR Technology Corp.’s 19,139-square-foot lease at Capital Center, and Interaction LLC’s 17,767-square-foot lease at Heritage Park.

Downtown has been the hottest submarket for tech activity, absorbing 279,886 square feet of space since the beginning of 2016, outpacing the No. 2 submarket, Keystone Crossing, with 192,624 square feet.

“As tech firms lease more space, office building owners in downtown Indianapolis are investing in updates to common areas and tenant lounges, the report said.