Office Conversions: A Cubicle Renaissance

In the dynamic realm of commercial real estate, the prevailing trend of a "flight to quality" has made a profound impact. Tenants and investors alike are reshaping their preferences for office spaces, leaning towards high-quality, contemporary, and well-equipped alternatives. This shift is rapidly devaluing older or less desirable options, breathing new life into iconic Indianapolis buildings, and fostering a renaissance of office spaces that align with the evolving demands of today's workforce and business landscape.

Aletha Dunston, the Director of Indianapolis Economic Development, notes the transformative nature of this trend, emphasizing how historic structures in Indianapolis are taking on vibrant new roles. The blending of the industrial aesthetic with bold transformations sets the stage for a renaissance of office spaces in the city.

The Box Factory, born in 1920, is a prime example of this revitalization. Originally constructed for the US Corrugated Box Co., it now offers innovative space for creative users in the up-and-coming North Mass corridor. This area, an extension of the iconic Mass Ave, is surrounded by thriving historic neighborhoods and renowned public and private schools. The Box Factory combines historic preservation with modern design, exemplifying Indy's trendiest new creative office building.

The Stutz Building, deeply rooted in the automotive industry's golden age and Indianapolis's motorsports legacy, has undergone a significant transformation. Acquired by Somera Road in 2020, the Stutz Factory has been redeveloped into a world-class creative office destination, offering approximately 300,000 square feet of flexible office space. With its tall open ceilings, large industrial-type windows, exposed brick, and artistic character, The Stutz Building provides a unique and vibrant work environment, accommodating tenants of all sizes, including coworking and flexible workspace options through INDUSTRIOUS.

The PX Building at Fort Ben, with its historical significance dating back to 1908 as the Fort Benjamin Harrison Army Base PX, is experiencing a modern revival. Positioned in the historical Lawton Loop of Fort Ben, this building, the last to be redeveloped in Fort Ben, is undergoing a transformation into a dynamic and modern office space. The project aims to honor its rich military heritage while meeting the contemporary demands of businesses.

The overarching "flight to quality" renaissance is not unique to Indianapolis but reflects a global trend in the commercial real estate market. The convergence on quality, driven by occupiers' needs and sustainability goals, is fostering a shift in the relationship between investors and occupiers from transactional to cooperative. Occupiers are seeking high-quality, flexible, and amenity-rich workspaces to bring their teams together for collaboration and innovation while meeting ESG requirements and addressing economic concerns.

The preference for high-quality spaces extends beyond traditional office buildings, encompassing Class A, Class B, and trophy class offices. Class A offices, characterized by modern amenities and prime locations, are in high demand as businesses prioritize smaller footprints and allocate savings to other areas. Trophy-class buildings, exemplified by iconic structures, offer prime locations, state-of-the-art facilities and a professional tenant community.

The paradigm shift in urban development is evident in the growing popularity of office conversion projects. As vacant offices are transformed or repurposed, cities are offering economic incentives to combat housing shortages and revitalize underutilized spaces. This shift represents a response to a changing commercial real estate market, with U.S. office vacancy rates reaching all-time highs. According to reports, the current vacancy rate is 12.9%, marking the sixth straight quarter of increase, and the office space availability rate is at 16.4%, another all-time high.

In this evolving landscape, the revitalization of iconic Indianapolis buildings preserves their historical significance while reimagining them as modern, innovative office spaces. These transformations not only enhance the city's appeal but also create environments where businesses and creative professionals can thrive. Develop Indy, the economic development organization for Indianapolis, is enthusiastic about these changes and is committed to supporting the growth of quality office spaces in the city.

Check out more available office renovations prioritizing place for their tenants.