Leasing activity in Indianapolis, Indiana's industrial sector, has exploded. The 5.6 million in signings in the first quarter not only increased by 123 percent from the previous 12 months but was also the busiest number seen since the second quarter of 2022, or nearly in three years, according to a market report posted by Colliers.
"New-to-market and expanding operations accounted for 79% of user activity in modern bulk product in the last 24 months, averaging 182,412 sf per lease," Colliers said.
The top lease in the city went to The Simply Good Foods Company, which secured 805,000 square feet in the East submarket.
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Also, vacancy dropped by 10 basis points year-over-year and quarter-over-quarter to 9.6 percent.
Moreover, the incoming supply has slowed dramatically. The 2.6 million square feet currently under construction are the lowest levels seen since the third quarter of 2016.
However, there certainly were some disappointing industrial trends in Indianapolis. Most notably, net absorption tanked 570,700 square feet compared with 2.35 million square feet in the previous three months. However, the year-over-year decline was slightly more modest, falling by just around 12,000 square feet.
Asking lease rates fell by seven cents per square foot NNN to $6.10 from the previous 12 months, a one-cent improvement from the fourth quarter.
Of course, uncertainties lie ahead about the economy in the future due to the tariffs rolled out by the Trump administration. While Colliers acknowledged that this could "delay continued rebound in activity over the coming quarters" in Indianapolis' industrial sector, the firm expects net absorption to remain positive.
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