Chris Carmen / June 28, 2017
I’m always intrigued by the comparison of office rental rates with industry colleagues located in other U.S. and major foreign cities. When you look at Indianapolis office space versus other major cities around the world, the contrast can be shocking.
The inexpensive Indianapolis office market sharply contrasts with major cities around the world, as evidenced by a National Real Estate Investor, piece The World’s 10 Most Expensive Office Markets.
Hong Kong tops the list, with an average annual rental rate of US $235.23 per square foot.
Just making the cut at 10th highest is Midtown Manhattan, which is the only U.S. city to make the list. Rental rates in Midtown Manhattan can range from the mid $50’s to over $100.00 per square foot.
So how does Indianapolis compare? The most expensive office building located in the city of Indianapolis leases for approximately $25.00-27.00 per square foot gross full service. The most desirable north suburban Indianapolis office building, located in Carmel, leases for roughly $26.00 per square foot….and that’s before the landlord provides any incentives for a tenant to lease its building. Keep in mind, this is not an office building located in some backwater, but rather a community that was picked by Money Magazine as the Best Small City in America in its 2012 ratings of the Best Places to Live in America.
When comparing the Indianapolis office market to other U.S. and international office markets, the city is a relative bargain, which is why Indianapolis was picked by Forbes Magazine as the 4th most affordable city in America. Throw in a relatively low cost of labor, low taxation, one of the lowest costs of living in a major city in the US, and one of the highest percentages of residents with college level educations or better in America and Indianapolis low cost of office space is quite remarkable. In Chicago, where downtown office rental rates range from the high $20’s to over $40.00 per square foot (full-service) for well-located office space, businesses can realize an operating cost savings of approximately 15% – 25% by shifting operations to the Indianapolis metro area.
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