Indianapolis: Sports Town, Tech Town And All-Around Growth Market
The world knows Indianapolis for its sports, but national companies (including the tech sector) are learning the city has a pool of talent and a reasonable cost of living — a prime combo when it comes to site selection, according to the speakers at Bisnow's first-ever Indianapolis State of the Market.
Thus the market, which has done well since the recession, is poised to continue its growth. Indianapolis might not get Amazon HQ2, but it is already attracting a lot of other businesses and the talent they hire.
The event kicked off with a Mayoral Fireside Chat with City of Fishers Mayor Scott Fadness and City of Westfield Mayor Andy Cook, moderated by Krieg DeVault partner Paul Reis.
Fadness said aspiration is inspiraton.
"Only five or six years ago, we didn't have a vision of what we wanted to be, but we spend a lot of time thinking about it. We decided that Fishers is going to be a smart and entrepreneurial city, and we've been on that track since then."
Companies have located here, developers are busy adding product and the cherry on the sundae is IKEA.
Cook said cities have to become places where people want to be, which is a challenge.
"We need to create places that help retain those who grow up here, and attract newcomers. Every city has assets they can use, but it takes motivation and hard work."
Fadness co-chaired the bid for Amazon HQ2, and said, "I was gratified to see how many elected and community officials stepped up to help, regardless of where the project might land. The thinking was, 'Whatever I can do to help the region, I will, because it's good for everyone,'"
Cook said Amazon HQ2 was the first big project the region worked together.
"A lot of our competition works together better as regions. Fortunately, we've begun thinking regionally as well. The old thinking among the smaller places was, 'Why work with Indianapolis? They'll just take our businesses.' We have to get past that thinking, and we are."
The Indianapolis region has significant assets, Cook said, but it can be hard to get companies and talented workers to come for a look.
"They're used to flying over. But when they do come, they quickly appreciate our advantages, such as the cost of living."
Challenges lie ahead, however. Fadness said the region needs to devise new and workable policies to deal with the problems of affordable housing and inclusive development, among others.
"The health of our metro areas will shape the health of the state, and we need to come together to address these issues."
Sports is a critical part of the local economy, and the life of the community, the sports entertainment panelists said. Sports are also key to making the rest of the world aware of Indianapolis.
"We hardly need to mention sports when talking with businesses that are considering locating here. Everyone already knows. We've already gotten their attention that way," Ambrose Property Group President Aasif Bade said. "It's just part of the identity of Indianapolis."
The sports business has a $5B impact on the community, and the networks broadcast more sports footage from Indianapolis than anywhere else, Pacers Sports and Entertainment Vice Chairman James Morris said. Indy became the amateur sports capital of the country beginning in the 1980s, and now pro sports is growing.
Keystone Realty Group President and CEO Ersal Ozdemir, who owns Indy Eleven, said growing up in Turkey, the only thing he knew about Indianapolis was the Pacers, showing the global reach of the team.
"Great sports teams are an essential part of the quality of life," Ozdemir said. "When I moved here, I thought it would be great to have a soccer team. That would add to Indianapolis' quality of life."
About six years ago, he predicted soccer was going to grow in U.S. cities as the cities grew, and that Indianapolis needed to get started early on bringing soccer to town. Indy Eleven played its first game in 2013. More recently, he led the team's bid to join MLS, a decision that will come down in December.
Bade said sports are an essential part of the city and not only because of their economic impact — "the owners of the teams have done an exceptional job of giving back to the community."
Morris said central Indiana, to the extent that it is going to be an extraordinary place, has to draw the best and brightest young people to live here, investment capital to come here and a base of exceptional jobs to grow here.
"We are in a competition that goes beyond Columbus or Denver, as powerful as that is," Morris said. "The best people can live anywhere in the world. Health and education and cultural life and sports are all significant."
The event's development panel discussed how the Indianapolis market got where is it, and where it is going. There are strong reasons for optimism.
IEDC President Elaine Bedel said central Indiana is having a blockbuster of a year in terms of creating jobs. So far, there have been commitments to create 27,000 high-paying jobs here and make an investment of $6B.
"We try to help buisnesses expand, or bring in new businesses, and they ask, 'Where is my workforce, and where can I locate?' Every sector and every business has its own needs. Tech companies, for instance, are coming to urban areas where their talent wants to be."
The momentum in the tech sector here really got going when Salesforce took an interest in the market with the purchase of ExactTarget and decided to leave it here.
"They found a lot of tech talent here, which comes out of our universities," Bedel said.
Flaherty & Collins Properties CEO David Flaherty, whose company does urban infill, multifamily and mixed-use, said he is bullish on central Indiana.
"We don't see the region slowing down, with a lot of new product ahead, but also some rent growth. It isn't just Indianapolis, but a lot of places in this part of the state."
Birge & Held Asset Management LLC President Andrew Held, whose company redevelops and repositions properties, mostly Class-B existing projects, said he too is bullish on Indy.
"We want to focus on buying here if we can. The market is in a great place, though there's a lot of capital coming into Indianapolis, and that makes being a buyer more challenging. But ultimately interest in the market from other parts of the country, and the world, is a good thing."
Strategic Capital Partners President Richard Horn, whose company does mixed-use projects, said Indianapolis is a stalwart market in the Midwest, in job growth and space absorption. The industrial market is particularly hot, with record absorption last year, and strong absorption this year.
As for office, suburban office rents are at an all-time high, and there is not a lot of new supply, because construction costs have increased rapidly, Horn said.
"If the national economy continues to do well, so will Indianapolis office and industrial."