It’s a welcome sight in Indianapolis: The construction crews are back, and they’re building new industrial space in the city.
This is largely because of the strength shown by the industrial market in this city in the second quarter of the year, according to the second-quarter market report from Summit Realty Group.
According Indianapolis-based Summit, the overall vacancy rate for the industrial market stood at 6.7 percent in the second quarter of the year. That’s down from 7.5 percent one quarter earlier.
Summit pointed to several large industrial leases as one of the reasons for this decline in vacancy. Prime Distribution, for intance, leased 412,000 square feet in Indianapolis’ South submarket, while Henry Schein leased 380,160 square feet in the city’s Northwest submarket. Atkins Nutritionals leased 221,500 square feet in the East submarket.
The increase in leasing activity has actually led to the return of speculative construction in the Indianapolis industrial market. The 794,608-square-foot IDI World Connect Building 1 at the Ameriplex industrial park in the city’s Southwest submarket is under construction now and expected to be delivered in the fourth quarter of this year.
At the same time, the 450,000-square-foot Van Trust Project One Building also in the city’s Southwest submarket has its own fourth-quarter targeted completion date.
Not surprisingly, asking rents in the Indianapolis industrial sector are on the rise, too. According to Summit’s numbers, the direct asking rent for industrial properties here is $3.65 a square foot. That’s up 4.3 percent from the asking rents of $3.50 in the second quarter of 2011.
– Dan Rafter