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Office Properties Offset Impact of Government Foreclosure Listings

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By : Clark Raitz    99 or more times read
High number of properties under bank and government foreclosure listings hammered the residential property market of Indianapolis, Indiana, during 2010. The commercial property market would have been as bad if not for transactions closed during the last few weeks of the year.

The mainly negative Indianapolis foreclosure statistics were somewhat offset by increased leasing activities in the office building market during the 2010 fourth quarter. Although vacancy rates among office properties in the metro area did not decline, analysts reported that they could have been much worse if market-saving deals were not secured in the last quarter.

Vacancy rate for the downtown office market rose from 17.7% in 2009 to 20.3% at the end of 2010, while vacancy rate at the suburban area jumped to 22.7% from the previous year’s 21.6%. Most analysts agree that the increase could have been higher if not for several office deals that parties managed to close before the end of 2010.

Realtors are hoping that the late improvement in the commercial property market will spill over the residential property industry of the city, which has suffered from huge levels of bank and government foreclosure listings. One of the more significant transactions closed in the fourth quarter involved software company ExactTarget. The firm expanded its premises at the Century Building Downtown.

Meanwhile, the Ascension Health Hospital leased a 92,000-square foot area at Eleven Fortune Park, which will serve as the site for its service center. Aside from these lease transactions, the office market also benefited from the lower number of subleases during the year. Although Indianapolis foreclosure statistics have turned off some property buyers and renters, a big percentage of office occupants in the city maintained their spaces and decided to stay put.

However, one major drawback for the office market was the decision of pharmaceutical firm Eli Lilly and Co. to leave its Faris headquarters comprised of two buildings at South and Meridian Street. The property is reportedly being offered for rent or for sale. Some reports have stated that negotiations are being conducted for Rolls-Royce to occupy the Faris site. Realtors are hopeful that the deal, along with potential bank and government foreclosure listings purchases, will materialize.
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