by Dan Rafter
Chicago gets plenty of press — well-deserved — for the strength of its industrial market. But the city isn’t the only Midwest industrial market that is thriving today.
In fact, there are three other Midwest industrial markets that are seeingn their own boom times today.
Louisville: There are plenty of strong industrial markets across the Midwest. Louisville, though, ranks as one of the busiest these days.
According to the latest research from Cushman & Wakefield, developers completed more than 1.9 million square feet of new industrial construction during the first quarter of 2017. Developers are also building more than 3.9 million square feet of industrial product throughout the Louisville market.
This new construction breaks down into 2.6 million square feet of speculative product and 1.3 million square feet of build-to-suit facilities.
An increase in spec building accounts for a slight tick up in the industrial vacancy rate in this market. Cushman & Wakefield reported that the Louisville industrial vacancy rate rose to 7.2 percent in the first quarter, up from 5.5 percent in the first quarter of last year.
Even with this slight increase in vacancy rates, though, asking rents remain strong for industrial space in Louisville. According to Cushman & Wakefield’s research, the average asking rent of industrial space in the Louisville market rose to $3.75 a square foot during the first quarter. That’s up from $3.61 a square foot during the first quarter of 2016.
Indianapolis: Indianapolis has long been an industrial powerhouse, too, and that is showing no signs of changing. According to research from CBRE, the Indianapolis industrial market’s vacancy rate dropped to an all-time low of 5.4 percent in the fourth quarter of 2016.
For all of 2016, 9.5 million square feet of industrial space was absorbed in the Indianapolis market. That set a record, too.
Developers have noticed. CBRE reported that industrial projects under construction in the Indianapolis market during the fourth quarter of last year jumped by 2.5 million square feet.
Memphis: Memphis, too, boasts one of the most active industrial markets in the Midwest. Colliers International reported that the industrial vacancy rate in Memphis fell to 6.6 percent in the fourth quarter. That’s about half of where this market’s vacancy rate stood five years earlier.
Rental rates jumped in Memphis, too, with Colliers reporting that the total market average rental rate surpassed $3 a square foot during the fourth quarter.
New construction isn’t rare here, either. Colliers reported that two Class-A warehouses totaling more than 2 million square feet of combined space were delivered to the Memphis market in the fourth quarter of last year.