Fishers and the Need for More Multi-Tenant Office Space

Marsh Headquarters

This article is simply a perspective from the other side. The Fishers government is helping in the building of a lot of office buildings, especially in the downtown area. The question is – is this growth needed. Realistically, as a city grows, more businesses will move in and more space will be needed.

On the pro side of the argument, if you look at data provided by Cushman & Wakefield and reported in the Indianapolis Business Journal, you will learn that Fishers has substantially less multi-tenant office space than other areas such as Keystone, North/Carmel, or the northwestern part of Indianapolis. With just 1.9 million square feet of inventory, this pales compared to the 4.1 million square feet of space in Keystone or the 7.7 million square feet of space in the North/Carmel. Clearly Fishers has substantially less overall inventory to be working with in regard to office space.

Having said that, the amount of inventory is not necessarily the way to judge a need. More relevant would be the amount of inventory that is available. If you compare the four northern regions, you’ll learn that while North/Carmel has the highest inventory, it has the lowest vacancy rate. Fishers, on the other hand, has the highest vacancy rate at 34.9% as of the first quarter of 2020. The following shows the vacancy rate and how many square feet that equates to:

inventoryvacancy ratevacancy

As you can see from the table, although Fishers has the least amount of inventory, it has the second highest amount of open inventory. Of course, if inventory is filling, then you want to be ready for any increases. A look at first quarter 2019 compared to 2020 gives an idea of the direction inventory has gone. The biggest change in inventory rate has been in Fishers where there is now actually more available inventory rather than less:

2019 vacancy
Vacancy rate
vacancy space

Per the data, you can see that Fishers has actually had more space open up than everywhere except the North/Carmel area.

As new multi-tenant office buildings are being built, the thought that Fishers is having more space open instead of being filled could be a concern. Of course, in some cases, the space being built is bringing businesses to the space. In those cases, the total inventory available and filled will go up, which in turn will decrease the percentages unfilled via dilution. Overall open space in such cases, however likely won’t be impacted.

Recently it was announced that Knowledge Services is taking space in the old Marsh headquarters. That information is not in this data and will change the numbers as well. With 165,000 of space that is 90% vacant, this will offset most of the vacancy that occurred in Fishers from 2019 to 2020.

Fishers will need to watch office space closely. Having buildings that are empty does not serve the city in the most optimal manner. Based on the numbers, Fishers is not a leader at this point in filling multi-tenant office space.

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