Apartment developers continued their blitz on the downtown market with several projects under construction or in the planning stages.
Within the next three years, 3,500 additional units are expected to become available, nearly double the amount (2,000) built between 2000 and 2012.
If the new units are all occupied, the downtown population will increase by about 5,300 people.
A study Indianapolis Downtown Inc. released in November downplayed any fears the downtown housing market might become saturated with apartment units.
One of the strongest indicators is downtown’s vacancy rate, which hit a 12-year low in 2013 of 3.5 percent, while rents per square foot increased to $1.24 from a low of $1.12.
Among the larger downtown apartment projects were three redevelopments—the Indianapolis Fire Department headquarters property near Massachusetts Avenue, a portion of the former Market Square Arena site, and the property of The Indianapolis Star headquarters. The second phase of Artistry also was unveiled. All told, the four would add more than 1,500 units to the market.
The first phase of Artistry calls for 258 apartments and up to 68,000 square feet of first-floor commercial space that will open in sections. Construction will continue into spring.
National studies are finding fresh demographic populations interested in living in downtowns: millennials, those 30 and younger, and empty-nesters over 50.
Residential brokers see the trend toward apartment projects taking precedence over condominiums; apartment developments are easier to finance since construction isn’t dependent on units selling in advance.
Most downtown apartment projects are part of mixed-use developments featuring office or retail space on the ground level. One drawback: Much of the retail space has sat empty, unable to keep pace with the residential units being built.