Indianapolis Industrial Construction Booms in Q1

The area’s pipeline ballooned more than seven times year-over-year, CommercialEdge data shows.

The Indianapolis industrial market has been experiencing significant growth, driven by key factors such as e-commerce, logistics demand and corporate relocations.

simtra biopharma campus
Simtra BioPharma Solutions is expanding its sterile fill/finish manufacturing campus in Bloomington, Ind. Image courtesy of Simtra BioPharma Solutions

Year-over-year as of March, the metro’s under-construction industrial pipeline grew more than seven times, reaching roughly 4.3 million square feet, according to CommercialEdge information. Moreover, almost 3 million square feet came online between January and March.

Infrastructure projects like the I-69 Finish Line extension, Clear Path 465 and Revive I-70 initiative also enhance connectivity and improve transportation efficiency, making Indianapolis an attractive location for businesses reliant on seamless logistics.

Indianapolis’ pipeline grows significantly

At the end of the first quarter, Indianapolis’ industrial sector saw 4.3 million square feet of space under construction across 12 properties, a pipeline more than seven times larger than in the same interval last year, when only one project was underway. However, there is no data about any construction starts between January and March, CommercialEdge shows.

Park 74 Commerce Center
The 826,687-square-foot Park 74 Commerce Center will come online this year. Image courtesy of Brennan Investment Group

With 1.1 percent of total stock underway, the metro lagged Atlanta (2.2 percent), Dallas (2.5 percent) and Phoenix (10.3 percent), but surpassed Chicago (1.0 percent).

In February, Simtra BioPharma Solutions announced plans for a $250 million-plus expansion of its sterile fill/finish manufacturing campus in Bloomington, Ind. The company will build a 150,000-square-foot facility, with completion anticipated for 2026.

In August, Brennan Investment Group acquired 68 acres in Brownsburg, Ind., for the development of two industrial facilities that will total 826,687 square feet. Dubbed Park 74 Commerce Center, the campus is expected to come online in the following months.

Less facilities to come online

Libitzky Property Cos. acquired Park 130 @ Whitestown Building 3, a 319,336-square-foot facility in Whitestown, Ind. Image courtesy of CBRE

January through March, six warehouses totaling almost 3 million square feet came online, accounting for 0.8 percent of total stock, 20 basis points higher than the national average. Still, this marks a considerable decline from the 8.8 million square feet of industrial space delivered in 2023’s first quarter, CommercialEdge data shows.

Despite a nationwide activity slowdown affecting all markets, New Jersey (2.5 million square feet) was the only peer market to see less space delivered than Indianapolis. At the opposite pole, the Inland Empire (12.2 million square feet), Dallas (9.1 million square feet) and Chicago (6.3 million square feet) registered the highest square footage in deliveries.

In the first quarter of last year, Mohr Capital completed Building 6 at Mohr Logistics Park, a 1.1 million-square-foot logistics center in Whiteland, Ind. The property is part of a 475-acre master-planned development, which is expected to measure 7 million square feet upon full build-out.

Another facility that came online more recently is Sunbeam Development’s Building 2 within I-65 South Commerce Park, encompassing more than 1.1 million square feet. The distribution center is part of a 542-acre campus set to encompass up to 11 buildings.

Transaction activity follows national patterns

Ameriplex 4
Last January, Transwestern Investment Group acquired a 912,522-square-foot facility on behalf of a separately managed account. Image courtesy of CommercialEdge

Indianapolis transaction activity closely mirrored national trends in the first quarter, with $64 million in assets trading, according to CommercialEdge. The total sales volume in the U.S. during this period stood at $10 billion.

Industrial properties in the market changed hands for an average of $62 per square foot, less than double the $147 national average and the lowest price among top metros. Western markets saw the highest prices per square foot, Orange County ($326) and Los Angeles ($325) being the most expensive.

In January, EQT Exeter sold Park 130 @ Whitestown Building 3, a 319,336-square-foot facility for $28.4 million—around $88.93 per square foot—to Libitzky Property Cos. The multi-tenant warehouse located in Whitestown, Ind., came online in 2018 and was triple-net leased at the time of sale to Frito-Lay, Home Depot and FBN.

Last year, Transwestern Investment Group purchased Ameriplex 4, a 912,522-square-foot facility on behalf of a separately managed account. The property, part of the World Connect at Ameriplex industrial park, is fully leased to PepsiCo’s Quaker Sales & Distribution Inc.

Indianapolis industrial vacancy rate remains low

With less space hitting the market in recent months, Indianapolis’ industrial vacancy rate as of March stood at 3.2 percent, 2.0 percent lower than the national average, but still 80 basis points higher year-over-year. Midwestern markets performed best during the same month, with Columbus and Kansas City posting the lowest vacancy rates at 2.4 percent. Meanwhile, Chicago (6.1 percent) and the Inland Empire (6.0 percent) fared worse.

Anson 8A in Whitestown, Ind.
Rockwell Automation renewed its lease for 369,449 square feet of industrial space at Anson 8A, a 708,367-square-foot building. Image courtesy of Colliers

Notable industrial leases in the metro within the past year included Rockwell Automation renewing its 369,449-square-foot commitment at Anson 8A, a 708,367-square-foot building within the AllPoints at Anson industrial campus in Whitestown, Ind. CBRE Investment Management is the asset’s owner since 2019.

A month before, Adidas also renewed its commitment at 8677 Logo Athletic Court for 599,152 square feet. The company utilizes the space at Link Logistics’ property as a finishing facility.

The average rent for Indianapolis logistics hubs during the first quarter clocked in at $4.6 per square foot, based on CommercialEdge data. Despite a 5.0 percent increase year-over-year, the metro still lagged the $7.85 national average and all of its peer markets. Los Angeles ($14.31), Orange County ($15.44) and New Jersey ($10.49) registered some of the highest rents.

You May Also Like