CHICAGO, INDIANAPOLIS—In the past few years, surging demand for distribution space in Indianapolis led many developers to launch huge speculative buildings there, so many that some feared the market had an oversupply. But the big leases have returned, and it looks like the market is also generating a healthy level of demand from smaller users.
In fact, the Chicago-based firm HSA Commercial Real Estate has just leased the last remaining space at Gateway Industrial III, its 220,000 square foot speculative distribution center at 1025 S. Columbia Rd. in suburban Plainfield's Gateway Business Park. Furthermore, company officials are confident enough in the leasing climate to develop this summer another speculative warehouse at Gateway, its fifth and final project in the 40-acre park.
"We a little bit of a dip in the first part of the year," Robert Smietana, vice chairman and chief executive officer of HSA Commercial Real Estate, tells GlobeSt.com. But the temporary dropoff in leasing was mostly felt by operators of facilities with more than 400,000 square feet. "Our buildings are really geared toward users looking for between 40,000 and 50,000 square feet, and we have had a pretty constant stream of opportunities."
Kuehne + Nagel, a Switzerland-based global logistics service provider with more than 1,000 offices and distribution centers around the world, executed a 100,335 square foot lease at 1025 S. Columbia, adding to the 59,895 square feet it already occupies. HSA developed the property in partnership with Great Point Investors LLC in 2014.
"There is still plenty of demand for class A industrial space in the Indianapolis market," Smietana adds. "Gateway Business Park's proximity to the airport and I-70, which easily connects to the entire regional interstate system, makes it a highly attractive option for industrial users looking around Indianapolis."
Located on a 9-acre site at the intersection of Columbia and Midfield roads, the proposed spec facility will feature 32' clear heights, 32 truck docks, 4 drive-in doors and parking for 156 vehicles.
"We will be shooting for tenants that need around 50,000 square feet, or a bit higher," Smietana says, but the company also plans to make the building divisable down to just 25,000 square feet. "The ability to offer space to these smaller tenants, which have had a limited number of new-construction options to choose from, along with the site's premier location should help us attract a variety of businesses."
The developer's past projects include a 104,400 square foot flex building that was built in 2004 and a second 121,000 square foot building completed in 2006; a 34,880 square foot build-to-suit for the Federal Aviation Administration; and Gateway Industrial III.
Ownership was represented by Terry Busch and John Hanley of CBRE in the lease transaction.
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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.
