When it comes to new industrial construction, no market in the Midwest beat out Indianapolis in 2018. Colliers International reported that the Indianapolis area saw an industrial inventory growth of 3.2 percent last year, leading the Midwest.
The market also saw industrial absorption equal to 3.7 percent of its total inventory, another statistic in which Indianapolis led the Midwest.
It’s clear, then, that the Indianapolis industrial market enjoyed a record-setting year in 2018.
Colliers recently released its fourth quarter 2018 industrial report for Indianapolis and its surrounding communities. The report found that the industrial vacancy rate here did inch up to 4.6 percent in the fourth quarter of last year. But that increase came after the industrial sector hit an all-time low vacancy rate of 4.2 percent in the third quarter.
And on a year-over-year basis, the Indianapolis industrial market vacancy rate was still down 0.6 percentage points in the fourth quarter.
Colliers reported that Indianapolis’ modern bulk inventory grew by 7.5 percent in 2018 thanks to 18 new construction projects total 6.7 million square feet. Demand was strong for this new space. Nearly half of the 5 million square feet in new speculative projects were leased by the end of the year.
The south submarket was a hub for growth last year, accounting for nearly one-third of all the modern bulk completions in the area. Another 2.1 million square feet of new industrial construction is now taking place in the northwest submarket in 2019.
Don’t expect a slowdown in the Indianapolis industrial market anytime soon. Colliers says that the number of buildings currently under construction guarantees that a record amount of new space will be delivered in Indianapolis by the end of 2019. At the same time, rental rates for spaces between 150,000 and 200,000 square feet are up 10.7 percent on a year-over-year basis.
