The Midwest is rich with opportunity when it comes to CRE, and while Chicagoland might have been the front-runner for businesses wanting to plant roots, more and more CRE professionals are shifting their gaze to another region: Northwest Indiana.
McColly Real Estate Managing Broker Lori Tubbs, has witnessed and contributed to the economic development of Northwest Indiana firsthand, having worked alongside it for over two decades.
Government-backed incentive programs have been instrumental in enabling businesses to relocate and expand into Indiana, and Tubbs said occupancy sits at around 90%. Northwest Indiana’s continued growth might cause the same supply shortage seen around Chicagoland, but for now, there is plenty of available land if you know where to look. Many companies are opting for parcels of 500,000–1,000,000 square feet, while pockets in the range of 125,000–150,000 square feet — especially useful for the incubation of smaller businesses — are being overlooked.
La Porte County, for example, has been overlooked by many who seek opportunity outside of Chicago, but Tubbs said there have been numerous mid-size build-to-suit opportunities between La Porte and Chicago in recent years, many of which are spoken for prior to completion.
The bottom line is this: Businesses across the globe continue to flock to Indiana. And one of the biggest among its many draws? Stability.
For one, Tubbs said Indiana’s Issuer Credit Rating (ICR) is rated AAA from Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings. The State of Indiana is one of 13 to achieve AAA from all three agencies, according to Inside Indiana Business.
The friendly business climate is, additionally, a breath of fresh air for many companies, and those in charge of facilitating company moves lend a hand throughout the process.
“It’s a team effort,” Tubbs said. “They also do a lot of outreach. They go beyond the Indiana border to let people know that we’re open for business. We’re just waiting in the wings if we don’t toot our horn, but there’s a lot of opportunity to be obtained.”
Build-to-suits seem to remain the preference for most due to their low risk, and the majority of large companies are looking to build big-box facilities, but a resurgence of spec projects is predicted if construction costs continue to decrease along with the threshold for risk.
There’s also a variety of in-progress multifamily projects to cater to people who want a space to live outside of Chicago. South Shore Commuter Rail, running from Chicago to South Bend, is installing an additional rail line to South Bend, which is expected to not only alleviate rail congestion and lessen wait and ride time between the two hubs. Northwest Indiana is expecting lots of expansion because of this, and Tubbs said there are 8–10 multifamily projects being built along the line, be it reconstruction of old buildings or new, ground-up construction.
For companies wanting to relocate, or for those simply wanting to settle outside Chicago, Northwest Indiana has proven the place to be. The region was recently awarded $51 million to enhance infrastructure that’s been divided between 35 different projects. While other submarkets have experienced a bit of a slowdown, Tubbs said Indiana has a surplus of money to spend on its enhancement.
“There’s a lot going on and it’s cool to be a part of that,” she continued. “For a while, Northwest Indiana got lost in a vacuum between Chicago and Indianapolis, but it’s creating an identity for itself in many ways. We have one of the largest steel communities in the world, along with lots of agriculture development and renewable fuels — all within an hour of Chicago.”