Developers are adding plenty of spec industrial space to Indianapolis and its surrounding communities. But that new space? It’s filling quickly.
Why? Douglas Swain, vice president and general manager in the Indianapolis office of Opus Development Company, said that Indianapolis boasts several features that make it a prime destination for industrial users: It has a strong labor force. It’s located in the middle of the country, a day’s drive of 50 percent of the U.S. population. The highway system is strong. And the governmental bodies here are pro-business.
Because of this, the industrial market in Indianapolis is poised for continued success, and growth, in 2019, Swain said.
“This is a desirable distribution market,” Swain said. “Developers continue to build spec product here. Because we have all this product consistently being developed, there is always space available. If a company realizes it needs space in three or six months, they can find a building that suits their needs here.”
This strength will be one of the topics at the third annual Indianapolis Commercial Real Estate Summit being held March 14 by REjournals.com and Midwest Real Estate News. The event is taking place at the Westin Indianapolis at 241 W. Washington St. in Indianapolis and runs from 8:45 a.m. until 11:45 a.m.
Swain is one of the featured speakers at the event. But he’s not alone. Other speakers include Steve LaMotte Jr. with CBRE, Adam Ehret of Barratt Asset Management, Tristan Glover of Zeller Realty Group, Rebecca Wells of Lee & Associates and many others. Sessions will focus on the strength of the multifamily and markets, the changes coming to downtown Indianapolis and its suburbs and the outlook for the region’s office and retail sectors.
But industrial will certainly be a hot topic, too, especially with it performing so well today in the Indianapolis market.
Swain said that during the last five years, the average yearly absorption of modern bulk industrial space in the Indianapolis market is just under 5 million square feet. That is the sign of a steady, strong market.
“If you take a snapshot of our market at any one particular time, it might look like there are a lot of industrial buildings available. But that inventory tends to get leased up. Then you look up and there’s not all that much available,” Swain said. “When that happens, developers reload and bring more space to the market. That’s how it has worked consistently over the years here.”
The local industrial market is also seeing a boost from the last-mile trend. Companies need distribution centers located ever closer to population centers. Swain said that in the Indianapolis market, this has resulted in an increase in the construction of facilities that average around 250,000 square feet and are designed to handle tenants needing spaces ranging from 60,000 to 75,000 square feet.
“Even companies that you associate with larger buildings, the e-commerce retailers, are starting to take smaller but closer spaces for their distribution needs,” Swain said. “It is crucial for them to have close proximity or easy access to population and city centers.”
Interested in learning even more about the Indianapolis CRE market? Sign up for the Third Annual Indianapolis Commercial Real Estate Summit today.