“Rental rates across the board continue to be healthy,” he adds, “and on a slight upward trajectory.” The average direct asking rent rose 1.3%, up to $3.85, in the past year. That may seem like a small increase, but considering the vast amount of space that providers had to fill, any increase is a good sign for the property owners. “We continue to go in the right direction.”

The region's dense network of highways, along with a top international airport, has made the city into a true national distribution hub. And companies involved in e-commerce, other distributors, firms modernizing their supply chains, and 3PLs, continue to be responsible for much of the local activity. The largest new lease of the first quarter was by Ryder Logistics, which took 412,000 square feet at 760 Commerce Pkwy. In suburban Greenwood. Geodis Logistics was a close second, and took a little more than 400,000 square feet at 3870 Ronald Reagan Pkwy. In Plainfield.

INDIANAPOLIS-Developers added a remarkable amount of space to this metro area's industrial inventory in 2015. But in 2016, there was largely a pause in construction as everyone waited to see how well the market absorbed all of the new buildings. Last year turned out to be one of Indianapolis' best ever in terms of net absorption, and that has set the stage for 2017, according to a new report out from Colliers.

“What happened was exactly what we were hoping would happen,” Jason Speckman of Colliers tells GlobeSt.com. Tenants absorbed almost ten million square feet of space in 2016, a big leap over the results from 2015, when they had absorbed 3.5 million square feet. And another 1.4 million square feet was occupied in this year's first quarter alone. “This has kicked off an entirely new wave of construction.”

Overall, developers had more than 5.2 million square feet of new space underway at the end of the first quarter, much of it in bulk distribution facilities and more than twice the amount completed in all of 2016. The data also show that the leasing of new speculative space has pushed the overall vacancy rate down to 7.6%.

A huge proportion of the space under construction, about 4.6 million square feet, is being done on a speculative basis, a proportion not seen since before the recession. But there do seem to be good reasons for developers' confidence. “The pipeline of prospective deals continues to be steady,” Speckman says. In fact, Colliers' data show that tenants overall are looking for nearly ten million square feet of new space.

“Rental rates across the board continue to be healthy,” he adds, “and on a slight upward trajectory.” The average direct asking rent rose 1.3%, up to $3.85, in the past year. That may seem like a small increase, but considering the vast amount of space that providers had to fill, any increase is a good sign for the property owners. “We continue to go in the right direction.”

The region's dense network of highways, along with a top international airport, has made the city into a true national distribution hub. And companies involved in e-commerce, other distributors, firms modernizing their supply chains, and 3PLs, continue to be responsible for much of the local activity. The largest new lease of the first quarter was by Ryder Logistics, which took 412,000 square feet at 760 Commerce Pkwy. In suburban Greenwood. Geodis Logistics was a close second, and took a little more than 400,000 square feet at 3870 Ronald Reagan Pkwy. In Plainfield.