INDIANAPOLIS-More than 1,300 brokers, owners, developers and other professionals attended the annual State of Real Estate held by Cassidy Turley on Thursday evening at the Old National Centre downtown. The prevailing message of the event: 2011 will be a year of recovery for the state across all product types.

Lt. Gov. Becky Skillman provided the opening remarks. She said 2010 was the strongest year for job commitments since 2005, and that even though there are closed  plants and vacant buildings, there are signs of recovery. The state government will focus on being business friendly, she said. “Indiana’s economic health is our top priority,” Skillman said.

Jeffery Henry, managing principal of the Indianapolis office and regional leader for the North Central Region, hosted the event. This was the first year for the new firm, and the company already has about 60 offices across the country and handles 427 million square feet.

The year 2011 will be the year that the first leg of recovery will begin for the state, said Jason Tolliver, research director for the company. He said that though there may be some starting and stopping along the way, there won’t be a double-dip recession that had raised concern at the beginning of 2010.

Core markets are taking much of the flash of the recovery, Tolliver admitted, but Indiana has some advantages. Cap rates are higher, allowing for more return on investment, he said. Also, while rental rates are much lower than the rest of the country and not particularly helpful to office owners, low rates also help attract new companies to the state. “I think this is the year, and 2012 as well, that we’ll start to see an increase in investment in the secondary markets,” Tolliver said.

A few of the company’s experts in various products also discussed their outlook for 2011. The discussions centered around the theme that has been the most important to the rest of the country as well: Jobs. Mary Beth Kohart, principal and VP in office services, said Indiana is one of the top 11 states for job creation, according to the Bureau of Labor Statistics. “All indications point to jobs continuing to increase this year,” she said.

Absorption has also been important, and the state saw absorption up across office, industrial and retail – though positive absorption for the entire state was only a few hundred thousand square feet in each category, that’s much higher than the negative absorption recorded during 2009. The fourth quarter brought the best returns, such as 230,000 square feet of absorption recorded in the office sector, said Kohart.

The industrial market is one of the state’s stars, as a vacancy rate below 7% is one of the lowest in the country. However, rents are well below the national average, at $4.08 per square foot, compared to an average of $5.19 per square foot nationally, said VP Fritz Kauffman. Further, two closing plants, General Motors Stamping and Visteon, will not help, he said. “These closings will put downward pressure on rents in 2011,” he said.

Finally, retail should also pick up this year in the state, said William French, a principal and VP in the company. Banks should rid themselves of distressed properties, overall sales will increase and the development pipeline should refill, he said. “Since 2008, we’ve had really no new shopping developments in Indiana. Now we’re hearing rumblings by the big boxes and junior anchors that they are looking to grow here,” he said.