How hot is the Indianapolis industrial market? JLL, in its most recent research, said that the Indianapolis market absorbed 4.3 million square feet of industrial space as of the middle of 2019. That’s a big number, up from 1.5 million square feet of absorption during the same period last year.
And JLL’s researchers don’t expect the market to cool. According to the company’s second quarter industrial report, the Indianapolis market should see industrial absorption double to 8.4 million square feet by the end of the year. This is due largely to the several tenants that either have or will soon lease space in chunks of 500,000 square feet or more.
This hot market hasn’t gone unnoticed by developers. JLL says that developers delivered 2.5 million square feet of industrial space during the second quarter, a jump of 1.9 million square feet when compared to the second quarter of 2018.
Not surprisingly, the demand for new industrial space has encouraged landlords to raise rents. Asking rents for Indianapolis-area industrial space are up 2.9 percent since the first quarter of 2019 and 5.2 percent year-over-year. Mid-sized warehouse spaces are seeing especially high rent growth, with asking rents up nearly 11 percent since the second quarter of 2018.
Investment actvity is equally strong, with 9 million square feet of industrial space already sold in 2019. An additional 13.1 million square feet is being marketed.