In Q3 2023, the resurgence of rental demand has been a welcomed development among apartment operators and investors in Indianapolis. This quarter marked the continuation of positive absorption, for the second consecutive quarter, following a year-long stretch of negative absorption. However, this upswing was insufficient to counterbalance the influx of new units added during the quarter, resulting in a modest 30 basis point quarterly decline in the average occupancy rate to 93.9%. Fluctuation among property classes was slight, with Class B properties at the higher end, registering a rate of 94.1%, while Class A and C units, at the lower spectrum, registered at 93.7%.
Similar to the preceding quarter, all thirteen Indianapolis submarkets reported annual reductions in occupancy, albeit with variations in degree. The Anderson submarket boasted a robust 96.5% occupancy, while three additional submarkets out of the thirteen registered occupancy rates surpassing 95.0%. On the flip side, Northeast Indianapolis, encompassing an inventory exceeding 16,500 units, witnessed a total of 605 net move-outs over the past year, causing it to register the lowest occupancy rate of the cohort at 92.0%.