by Dan Rafter
How strong has the Indianapolis industrial market been? The latest numbers from JLL tell the story. According to JLL’s fourth quarter industrial insight, the greater Indianapolis industrial market closed 2015 with a vacancy rate of 8.2 percent.
And the region earned that rate despite seeing the highest two-year level of new construction that the Indianapolis market has experienced in nearly a decade.
The Indianapolis MSA saw more than 40 new industrial leases or lease renewals top 100,000 square feet in 2015, something that allowed net absorption levels to increase for the fourth consecutive year. Landlords in the industrial sector also enjoyed rent growth of 7.3 percent in the fourth quarter of 2015 when compared to the same quarter in 2014.
Construction crews were especially busy in the Indianapolis market last year. JLL reported that nearly 6 million square feet of new idustrial construction hit the market in 2015. This followed nearly 6.4 million square feet of new industrial construction here in 2014.
That two-year total is the highest level of construction that the Indianapolis market has experienced in nearly 10 years. JLL expects plenty of new industrial space in 2016, too. According to JLL’s numbers, 2.3 million square feet of industrial space is under construction now with an additional 600,000 square feet expected to break ground by April.
Don’t worry too much about overbuilding. JLL reports that demand for this new space is high, with roughly 40 percent of the industrial construction completed this year in the Indianapolis market leased at delivery. JLL said that about 45 percent of the current industrial construction projects in the market slated for delivery next year have already been pre-leased.