The central Indiana industrial real estate market recorded its sixth consecutive quarter of uninterrupted growth over the past three months and is outperforming all other Midwestern industrial markets, according to commercial real estate firm Cassidy Turley’s Q1 2012 industrial market report.
The first quarter of 2012 saw 2.2 million square feet of new leasing and 612,000 square feet of renewals and expansion in Indianapolis and the surrounding area. Much of this activity was concentrated to the south and southwest of the city. The largest new lease was 703,000 square feet by Anderson Merchandisers, while the largest renewal and expansion was 334,000 square feet by Jacobson Warehouse Company.
The overall industrial market vacancy rate has declined for five quarters to 4.1 percent, down from 5.7 percent in the first quarter of 2011. This rate is lower than both the U.S. (9.1 percent) and Midwest (9 percent) averages. Cassidy Turley forecasts that the rate may fall below four percent before the end of the year.
As might be expected, the falling vacancy rates are putting upward pressure on rental costs, and Cassidy Turley expects asking rates to rise 2 to 3 percent in 2012. Also as might be expected, the growth has spurred interest by developers and Cassidy Turley predicts the reemergence of “limited speculative development” this year.
