Indianapolis’ Industrial Pipeline Builds as Sales Pick Up

Indianapolis’ industrial market showed stronger development momentum through April, with the construction pipeline running ahead of last year’s level, according to Yardi Matrix. Industrial deliveries also improved year-over-year, supported by a steadier flow of new projects coming online.

On the investment side, sales activity remained active across a range of deal sizes, while market fundamentals stayed comparatively tight, with vacancy below the U.S. average and rents continuing to advance.

Pipeline expands from last year’s level

As of the end of April, Indianapolis had 6.2 million square feet of industrial space under construction across 19 properties, accounting for 1.6 percent of total stock, according to Yardi Matrix data. The pipeline was much higher than during the same period last year, when four facilities totaling nearly 1.8 million square feet were under construction.

Across major industrial hubs, Dallas and Phoenix continued to post the largest construction pipelines, while Kansas City remained at the lower end of the range.

Year-to-date, developers broke ground on four properties totaling 1.8 million square feet of Indianapolis industrial space, accounting for 0.5 percent of total stock.

Meta is currently developing its 1-gigawatt data center campus in Lebanon, Ind. The project represents more than $10 billion in data center and community infrastructure and will be designed to handle both AI workloads and Meta’s core products.

Deliveries improve from last year’s pace

Indianapolis delivered more than 2 million square feet of industrial space as of the end of April. Seven projects came online in the metro, accounting for 0.5 percent of total stock, slightly higher than the 0.4 percent national average, according to Yardi Matrix data. Industrial completions improved from the same time period last year, when only 752,500 square feet of industrial space was completed.

The Inland Empire (1.8 million square feet), New Jersey (1.6 million square feet) and Kansas City (507,792 square feet) had less industrial space delivered than Indianapolis during the period, while Dallas (10.7 million square feet) and Chicago (6 million square feet) posted higher totals.

Sales activity remains elevated through April

Indianapolis’ industrial sales volume reached $275 million as of the end of April, according to Yardi Matrix data. A total of 18 properties adding up to 3.2 million square feet exchanged hands in the metro.

Industrial assets traded at an average of $93 per square foot. New Jersey ($181 per square foot), the Inland Empire ($170 per square foot) and Phoenix ($162 per square foot) posted higher pricing, while Kansas City ($92 per square foot) and Chicago ($87 per square foot) were lower.

In one of the largest recent transactions in the metro, JLL Income Property Trust acquired Whitestown Distribution Center III, a 605,000-square-foot industrial facility in Whitestown, Ind. The asset sold for about $60 million, or approximately $99 per square foot. Opened in 2023, Whitestown Distribution Center III is fully leased to Daimler Truck North America.

Lauth Group Inc. sold 70 Connect II, a 554,228-square-foot Class A industrial facility in Greenfield, Ind. Hillwood picked up the property for $41.7 million, or $75 per square foot, according to Yardi Matrix information.

Vacancy remains below the national rate as rents rise

Indianapolis’ industrial vacancy measured 7.5 percent in April, below the 9.1 percent national average, according to Yardi Matrix. New Jersey’s rate reached 8.8 percent, the Inland Empire stood at 8.9 percent and Phoenix came in at 9.0 percent, while Kansas City remained tighter at 5.1 percent.

In-place rents in Indianapolis averaged $5.46 per square foot, up 4.8 percent over the past 12 months, while space leased during the past 12 months averaged $6.13 per square foot.

Manufacturer Faith Technologies Inc. will be the first company to move into Pittsboro Commerce Center, Opus’ new 170-acre industrial park just west of Indianapolis. FTI is expanding to the park by starting construction on a 500,000-square-foot manufacturing facility on a 47-acre site it recently purchased from Opus.