Steady. That’s how Colliers International describes the performance of the industrial market in Indianapolis during the first quarter of 2018.
The commercial real estate firm recently released its first-quarter research reports for Indianapolis. And while the city’s industrial market wasn’t exactly booming during the quarter, Colliers did report that it continued to show gains in both asking rents and vacancies.
Those gains, though, weren’t quite as impressive as they were in earlier quarters.
According to Colliers, the Indianapolis-area industrial market ended the first quarter of the year with a vacancy rate of 5.1 percent. Colliers said that though industrial absorption was sluggish during the quarter, a lack of new speculative construction pushed the sector’s vacancy rate down.
Colliers reported that new modern bulk development completions were limited to a pair of build-to-suit projects in the first quarter of 2018, causing the direct vacancy rate for this type of industrial product to fall to 7.7 percent.
There are 11 new modern bulk projects now under construction, so Colliers does expect the vacancy rate in this sector to increase in the second quarter of this year. But these increases should be fairly modest because nearly half of the 4.2 million square feet under construction is pre-leased.
The Indianapolis market did see some large lease deals in the first quarter of the year. In the East submarket, Mastin & Cain Properties leased 281,584 square feet at 2900 N. Shadeland while Balsam Brands took over a 128,000-square-foot vacancy at the now fully leased Franklin Distribution Center.
And in further good news for the sector? Colliers reported that light industrial and flex product fell to 7.1 percent by the end of the first quarter of 2018. Asking rents for this product increased year-over-year by 8.7 percent. The Northwest submarket experienced a year-over-year rent increase of 11.3 percent during the quarter, the biggest jump of all submarkets.