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Indy Industrial Market Recovering Balance

INDIANAPOLIS—Some observers worried that developers had put up so many new distribution buildings that supply and demand were unbalanced, but users absorbed so much space in 2015, Cushman & Wakefield expects to see more speculative development in 2016.

By Brian J. Rogal | Updated on January 13, 2016

INDIANAPOLIS—Since the recession, this metro region had developed into one of the hottest distribution markets in the nation. But recently, some observers worried that developers had put up so many new distribution buildings, many on a speculative basis, that supply and demand had gotten somewhat out of whack. But it looks like users absorbed a lot of space here in 2015, and have helped narrow the gap that had developed between supply and demand, according to a new market beat snapshot from Cushman & Wakefield. In fact, in 2016 the firm expects to see more speculative development.   

Net absorption reached 5.3 million square feet for the year, the firm found, and the vacancy rate, after briefly exceeding the historical average of 6.1%, sank back to just 5.8%. Modern bulk buildings accounted for about 3.4 million square feet of the total absorption. “With the continued absorption of quality product, look for the market to shift closer to equilibrium in terms of supply and demand,” the firm said.

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