Available sublease space increased from 450,000 sf to more than 1.1 million sf, with more than 400,000 sf available in the Downtown and Midtown submarkets. More than half of the space is considered class A space, according to CTMT's report, and sublease space is being discounted by 25% to 50% below the base contract rate.
The Downtown submarket has been hardest hit by vacancies, as the overall rate jumped four points to 20% at the end of 2001, while vacancy in the suburbs increased modestly from 16.1% to 16.6%.
One phenomenon in the Indianapolis market has been conversion of buildings from single-tenant to multi-tenant space as corporations merge or downsize operations, according to CTMT. Conversions added 650,000 sf to the market last year, led by USA Group's former Downtown headquarters at 378,000-sf 30 S.Meridian. In the Fishers submarket, conversion of Bank One's former operations center at 10300 Kincaid Dr. added 196,000 sf to the market."Conversions have largely replaced new construction this year," according to the report.
"We expect a slight increase in demand, largely attributable to tenants seeking to take advantage of continuing soft market conditions," CTMT predicts. "However, look for very little, if any, new construction."
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