A Toronto-based commercial real estate firm says Indianapolis is one of three mid-sized Midwest markets showing significant momentum in the warehouse and distribution space.
Avison Young says Indianapolis, Minneapolis, and Columbus, Ohio are drawing record development and leasing activity, particularly in the e-commerce sector.
The brokerage says strong demand is helping the cities keep vacancy rates down and construction and rental rates up.
Avison Young’s Forecast 2020 Report shows the Indianapolis area saw 10 million square feet of new logistics space in 2019. The company says 95% of that space was quickly absorbed.
“The Indianapolis market has seen significant construction activity in recent years, and we expect development to continue but at a more measured pace in 2020,” says Sean McHale, principal in Avison Young’s Indianapolis office. “We are seeing a shift in demand for small to mid-sized buildings to accommodate users in the 50,000 to 300,000-square-foot range.”
The firm pointed to a new distribution park, just south of Indianapolis, as evidence of continued interest in the Indy market.
The Whiteland Exchange, which was announced in June, proposes to add 2.4 million-square-feet of warehouse/distribution space.
The business park is being developed by Jones Development in Whiteland just off Interstate 65. Avison Young says several of the speculative projects are currently under construction.
The brokerage expects rental growth, construction, leasing and investment volume and decreasing vacancy to continue throughout 2020.