After setting a new historical high for net absorption last year, the market is on pace to set a new benchmark for construction this year. There is 6.8 million square feet still under construction with completion by year-end. This total alone would be record-breaking for a single year. But it will shatter the previous mark by several million square feet when combined with the 2.5 million square feet that has already been delivered. Download the full Q2 Indianapolis Industrial Outlook Report for all of the details.
What does all this construction mean for the market?
For starters, demand is high. Forty percent of all completed construction is leased. That number rises to 45% for industrial projects still under development. Leasing activity also increased from three million square feet to five million square feet this quarter with several of these tenants taking newly built space.
Investors are taking notice as well. Several newly built projects have already traded hands. In fact, one third of all investment activity is from companies that are new to the market. And while summer typically signals a slow down, that will not be the case for the Indianapolis industrial market. Several new construction projects will come to completion as well as a few large leases will take occupancy.
More from around the metro area:
- With 600,000 square feet of net absorption year-to date, Boone County leads the entire MSA and accounts for half of the market wide total.
- Despite space givebacks this quarter, Hamilton County still has one of the lowest vacancy rates in metro Indianapolis.
- Three out of four deals closed this quarter featuring tenants new to the Indianapolis industrial market chose to locate in Hancock County.
- Hendricks County accounts for half of all completed and ongoing bulk/distribution construction projects as well as leasing activity.
- Dirt began moving on a 233,000-square-foot speculative bulk/distribution building this quarter. One or two more will soon follow in Johnson County.
- While most of the construction pipeline is bulk/distribution, two mid-sized warehouse buildings are nearing completion in the Northwest submarket of Marion County.
Download all of the details from the Q2 Industrial Outlook Report.