The availability of land has helped the metro area keep prices low, another draw for national developers and occupiers. Its asking rents — $3.50 per square foot NNN – are among the lowest in the nation, according to JLL.

Early in 2015, after several years of very robust construction activity, there was some concern that tenants were not absorbing all that new space fast enough. But these days, Cagna says that “demand is definitely keeping up with the supply, and we don't have any worries about being overbuilt.”

He adds that e-commerce isn't the only thing fueling Indianapolis' expansion. “We've been seeing a lot of good activity from both the food and beverage industry and 3PLs. That gives us a lot of confidence that things will continue this way at least into next year.”

There are between 12 and 13 million square feet of active tenant requirements in the Indianapolis metro area, Cagna says. Typically, tenants in this market are looking for between 8 and 10 million square feet of space.

And last week saw another of the big spec buildings started in 2014 find a user. Kohl's purchased AllPoints Midwest Building 6, a 936,510-square-foot building in suburban Plainfield built by a joint venture of Duke Realty and Browning Investments, and plans to occupy the entire facility.

That and other deals in the works means Indianapolis could see around eight million square feet of absorption this year, according to Cagna. And with a vacancy rate of just 6.7%, “there is definitely room for more speculative development.”

INDIANAPOLIS—The rise of e-commerce and the need for updated distribution facilities has helped fuel a remarkable construction boom in this metro area over the last few years. And with nearly 5 million square feet of industrial space absorbed in 2016, the region seems set to soon play an even bigger role in the nation's product distribution network.

In fact, according to JLL's new report – The Leaderboard: The Top 18 Distribution Markets in the United States — Indianapolis is already catching up to top national markets such as Chicago, Dallas and Atlanta in terms of activity.

The JLL report categorized Indianapolis with Columbus and Cincinnati, ranking that region at 7^th on the list. But when JLL analyzed Indianapolis on its own, it ranks 4^th in the nation, due to its strong growth and record absorption. Through the second quarter, its industrial tenants absorbed 4.7 million square feet of space, almost as much as in all of 2015. And the reason for all this activity is not hard to discern.

“Within a day's drive you can reach about 70% of the country's population,” Mike Cagna, senior research analyst for JLL's Indianapolis office, tells GlobeSt.com. Furthermore, “we still have a lot of land available for development,” a factor especially important for companies that need large build-to-suits with very specific requirements.

The availability of land has helped the metro area keep prices low, another draw for national developers and occupiers. Its asking rents — $3.50 per square foot NNN – are among the lowest in the nation, according to JLL.

Early in 2015, after several years of very robust construction activity, there was some concern that tenants were not absorbing all that new space fast enough. But these days, Cagna says that “demand is definitely keeping up with the supply, and we don't have any worries about being overbuilt.”

He adds that e-commerce isn't the only thing fueling Indianapolis' expansion. “We've been seeing a lot of good activity from both the food and beverage industry and 3PLs. That gives us a lot of confidence that things will continue this way at least into next year.”

There are between 12 and 13 million square feet of active tenant requirements in the Indianapolis metro area, Cagna says. Typically, tenants in this market are looking for between 8 and 10 million square feet of space.

And last week saw another of the big spec buildings started in 2014 find a user. Kohl's purchased AllPoints Midwest Building 6, a 936,510-square-foot building in suburban Plainfield built by a joint venture of Duke Realty and Browning Investments, and plans to occupy the entire facility.

That and other deals in the works means Indianapolis could see around eight million square feet of absorption this year, according to Cagna. And with a vacancy rate of just 6.7%, “there is definitely room for more speculative development.”