This year should be another strong one for the Indianapolis industrial market, according to the latest research from Avison Young.
According to an Avison Young Investment Review released in late April, a continued rise in online sales during the COVID-19 pandemic will continue to fuel industrial growth in Indianapolis throughout the rest of 2021 and beyond.
During the first quarter of 2021, 13 industrial properties totaling 2.9 million square feet sold in Indianapolis. During the last four quarters, industrial property sales here totaled 14.4 million square feet and $1.08 billion, acording to Avison Young.
These sales were split nearly evenly between portfolios, which accounted for $574.6 million, and individual properties, which accounted for $512.6 million, according to Real Capital Analytics research.
And who is buying industrial properties in the Indianapolis market? Avison Young said institutional investors have made up 56.3 percent of the property buyers so far in 2021. In 2020, that investor group only purchased 20.7 percent of the industrial properties sold in Indianapolis.
It’s not surprising that investors are interested in this market. Indianapolis’ central location allows companies to distribute goods to nearly 80 percent of the U.S. population in just a one-day drive. That kind of location is an attractive one to industrial users.
The Indianapolis market, despite the pandemic, has seen some big industrial deals so far in 2021. XPO Logistics leased 1 million square feet in Monrovia, Indiana, while Amazon leased 539,943 square feet in Mt. Comfort, Indiana.
Amazon, as it is across the country, has become an especially important player in the Indianaolis industrial market. The company has expanded in Indiana during the last several years and now occupies nearly 7 million square feet in and around Indianapolis. Investors are attracted to industrial buildings that have Amazon as a tenant because of the company’s solid history and strong growth plans.
One of the most recent Amazon facilities added to the Indianapolis market is in the Whiteland Exchange industrial park in Whiteland, Indiana, along the southern section of the market. Avison Young is marketing that building for sale, representing Jones Development in the disposition. The complete portfolio is a fully leased 878,410-square-foot three-buiding industrial portfolio that includles Amazon as the sole tenant leasing the largest building, a 530,400-square-foot facility.
Avison Young principals Erik Foster and Mike Wilson, both members of the firm’s national industrial capital markets group, are representing Jones Development in the sale.
“This is a unique opportunity for an investor to secure a large, modern and well-located industrial portfolio with Amazon as the lead anchor tenant,” said Foster. “Indianapolis is a consistently strong logistics market supporting e-commerce activity on a national basis. This portfolio should attract considerable attention from investors looking to expand their foothold in this environment.”
The portfolio also contains buildings of 168,480 squae feet and 179,530 square that are 100 percent leased to Amcor, a global company that produces and packages food, beverage, pharmaceutical, medical, home and personal care products.
The buildings were delivered within the past year and include institutional-quality features, including 36-foot clear height in the Amazon building and 32-foot clear height in the Amcor buildings. Each building has extensive dock doors and fully automated warehousing and sorting equipment.
The Indianapolis industrial market also continues to show solid demand for large distribution space, finishing 2020 with 10.2 million square feet of net absorption, according to Avison Young. The market also had 11.8 million square feet in the construction pipeline.
Among the recent deliveries to the market were Sunbeam Development’s 507,000-square-foot facility in Franklin, Indiana, in Indianapolis’ south submarket, and Ambrose Property Group’s 505,000-square-foot Building #2 in Clayton, Indiana, in the I-70/Southwest submarket.