INDIANAPOLIS—This city has become one of the national hubs for bulk distribution, and the resulting flurry of industrial development shows no sign of abating. The Sunbeam Development Corporation, for example, has just purchased the I-70 West Commerce Park in suburban Monrovia and plans to construct a 525,000-square-foot industrial building on a speculative basis at the site. As the developer and owner of Exit 5 in Fishers, which consists of over 1,000 acres and nearly 3-million-square-feet, the company already has a great deal of development experience in the metropolitan region.
“They came to us about one year ago and said they wanted to do even more business in Indiana,” says Patrick B. Lindley, senior managing director, principal, with the Indianapolis office of Cassidy Turley, which will continue as the exclusive marketing agent for the park. The site already has a Johnson & Johnson distribution center with more that 1-million-square-feet and a 545,010-square-foot Gordmans distribution center currently under construction. Sunbeam plans to build “a modern bulk distribution building; it might come out of the ground this fall or no later than this spring.”
The deal adds to the wave of warehouse and distribution development that has hit Indianapolis and other Midwestern markets like Memphis and Columbus. Their central locations, access to vast interstate road networks, air cargo hubs and proximity to other major population centers should continue attracting developers for the foreseeable future.
“We went through a stretch of the recession like everybody else,” says Lindley, but with one major difference. “Our vacancy rate remained low throughout the recession.” This led Lindley to expect that once the recession ebbed, development would take off. He was right.
According to Colliers, “the Indianapolis industrial market delivered more than 2.06-million-square-feet of new investment-grade industrial buildings in the first quarter of 2013, with the vast majority of new product located in the Southwest (Plainfield) and Northwest (Allpoints Anson) submarkets.” Particularly significant was the delivery of Industrial Developments International's 795,000-square-foot speculative project at Ameriplex Business Park and the Prologis/Browning Investments' 622,440-square-foot building in the AirTech Business Park. Before the latter was even completed, Hartz Pet Products signed a 10-year lease for the entire building. The latest move came from The Opus Group, which just decided to construct two speculative warehouse buildings totaling 924,530-square-feet at the Plainfield Business Center. They will complete this project in spring 2014.
And the expansion of e-commerce should sustain this demand for big-box distribution centers in major distribution hubs like Indianapolis. “More than one-third of 2012 build-to-suit requirements were e-commerce related,” Prologis stated in a March 2013 report on the US industrial recovery. According to the US Census Bureau, e-commerce sales totaled $225 billion in 2012, more than double the amount in 2005.
But Plainfield, which for about 20 years has seen industrial developments gobble up its cornfields, “is almost built out,” according to Lindley. “There are very few pieces of land available for development.”
The I-70 Park in Monrovia, however, sits just one exit away from the Plainfield area, and has the same road network and access to Indianapolis International Airport. That proximity has “really been the thought behind all of our speculative buildings,” Lindley adds. And like the Plainfield of twenty years ago, Monrovia has an abundance of cheap, flat and available land. “All of these factors just lined up,” says Lindley, “and it just keeps going on and on.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
