Retail and Fulfillment Distribution in Indianapolis

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By Brian Seitz
Senior Vice President
Jones Lang LaSalle

In the video above, JLL’s Director of U.S. Research, Aaron Ahlburn, explains what is currently driving industrial demand across the country.

Retail, and specifically e-commerce fulfillment, is leading the charge from coast to coast.  In Indianapolis, the impact of expanding retail is even more noticeable. Nearly all new deal activity in 2013 (both closed and active deals) are either store fulfillment, e-commerce/DTC fulfillment or consumer goods.  Of the 3 million SF + of currently-active tenants, approximately 75% is directly attributed to e-comm!

As Aaron describes, these tenants are looking for “mega fulfillment” centers with very particular attributes.  In short, these normally include higher clear heights (36’ is the minimum), above-standard parking counts for employees and close proximities to FedEx and UPS sorting hubs as well as an abundant labor supply.  Given Indianapolis’ position as an excellent parcel shipping hub and its rich supply of cost-effective labor (right-to-work state), it’s no wonder that we’re seeing so much activity in this sector.

Speculative developers have noticed as well.  There is over 4 million SF of available spec space that’s either completed or under construction.  More than half of this square footage is made up of just 3 facilities, each over 750,000 SF.  Two of the three having 36’ minimum clear height.  Developers are becoming much more cognizant of these new demand drivers and will be the first to profit as a result.

Indianapolis and its industrial real estate developers/ investors should be the beneficiary of this growing sector of the market for many years to come.

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