Multifamily O Indiana

Where are Indianapolis apartment investors coming from? Across the globe

Indianapolis apartment market attracting investors from across the globe,ph01

The multifamily market in Indianapolis is attracting plenty of investment dollars today, and not just from buyers in Indiana or the Midwest.

That’s not unusual in the Midwest. Investors are sinking their dollars into apartment projects across the region, eager to cash in on the public’s increased desire to live in urban settings close to public transportation, restaurants, stores and entertainment.

But in Indianapolis, the demand-and-supply equation might be a bit out of balance.

Michael Garvey, chief investment officer with Indianapolis’ Lauth, said that today there is more demand from investors than there is available supply of multifamily product. At the same time, there’s been a steady influx of out-of-state and out-of-country money hitting the multifamily market here, Garvey said.

“The market seems to be a bit frothy right now,” Garvey said.

Garvey will speak about the strength of the Indianapolis commercial real estate market during the third annual Indianapolis Commercial Real Estate Summit to be held March 14 at the Westin Indianapolis hotel. The event will feature the top producers in the Indianapolis commercial real estate market speaking about the state of the area’s industrial, retail, office and multifamily markets.

Other panels will focus on the rise of activity in both downtown and suburban Indianapolis.

The area’s strong multifamily market will certainly be a topic of discussion. Garvey said that multifamily and industrial remain the two strongest sectors in the Indianapolis commercial real estate market today. Garvey said that these two sectors are the core of the area’s commercial real estate market.

The strong demand for multifamily product makes it difficult for local buyers such as Lauth, Garvey said.

“We are trying to create a little niche where we can spend time on the buy side,” he said. “We are not a core buyer of new product. We are not competing with the large private equity firms to buy something that has just been leased-up in downtown Indianapolis. We look more at the suburban market or even a tertiary market in Indiana to get the yields we need.”

One of those strong suburban markets is Carmel, Indiana. Carmel has developed its own walkable center. And properties located close to the Monon Greenway, a former railroad line converted to a biking and walking trail, are in especially strong demand.

Garvey said that the trail is the focal point of activity in Carmel. Retail has sprung up along it, and a new hotel near the trail is now under construction.

“If you have a project, whether it be office or multifamily, if it is close to the Monon, you will get a premium in rent and an increase in demand,” Garvey said. “To get a younger person to move to Carmel, you need walkability to amenities. Carmel has done a good job with that. The activity here is almost difficult to describe if you haven’t seen it.”

Lauth doesn’t build multifamily properties, preferring instead to invest in them. It does develop other product types, though. The company is building an office in downtown Carmel. The companies that the building will attract will head to Carmel for many of the same reasons that bring in apartment renters: the walkability, nearby restaurants and shops and, of course, the Monon.

“The younger employees and associates want proximity and walkability,” Garvey said. “The old suburban office with a sea of concrete and no sex appeal isn’t in demand. It’s the same with multifamily.”

For more information about the Indianapolis Commercial Real Estate Summit and to register for the event, click here.