INDIANAPOLIS—As reported in GlobeSt.com, this burgeoning industrial market has in the last few years attracted a large number of developers. The availability of land, the expansion of e-commerce, the region's central location and the dense transportation networks all combined to make this one of the nation's most active markets for new construction. A slowdown in leasing, however, made some wonder whether developers had gotten a bit ahead of the demand.
The latest leasing data provides some measure of comfort. According to CBRE, it has been 17 months since the market has seen a lease of more than 500,000 square feet. But in the third quarter, the firm just reported, two new tenants took more than that.
"These two new deals, plus the four other modern bulk deals this quarter, should help to put some of those fears to rest," CBRE says. Chewy.com took 597,000 square feet in a new spec building in suburban Plainfield, for example, and Vroom signed a lease for more than 500,000 square feet at 5300 Performance Wy. in Whitestown.
The overall vacancy rate stayed roughly the same at 7.6%, and the availability rate for modern bulk declined 40 bps to 9.2%.
And the developers continue to have confidence in the market. Four new buildings and two new expansions were started last quarter, which means there is now 2.6 million square feet of new buildings underway, and 1.2 million square feet of expansions. And 68% of the new construction is either build-to-suit or pre-committed. "That's more than double what we were seeing earlier in the year," says CBRE.
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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.
