Indy Industrial Market Back in Balance

INDIANAPOLIS—Last year at this time, a flurry of speculative construction here in the industrial market had several experts concerned that supply and demand had gotten out of balance. Still, these experts also said that the mismatch was probably temporary, and that robust leasing would continue in 2015. The results are now in, and the data show that was a solid prediction.   

According to a new report from JLL, developers finished about 6.0 million square feet of new construction in the Indianapolis metro area, slightly less than the 6.4 million square feet completed the previous year. And about 40% of the new space was leased at delivery. The vacancy rate did increase from 6.3% to 8.2%, but total net absorption for the year was 5.2 million square feet, a significant increase over 2014, when tenants absorbed 4.2 million square feet. Furthermore, over the past 12 months, rental rates increased 7.3%.