Indianapolis industrial market report

The Indianapolis industrial market through the first half of 2023 is experiencing a tale of two markets, as vacancy in the largest building size bucket approaches double-digits yet the smallest building size bucket remains sub-3.0%. As increased deliveries continue to hit the market for the remainder of 2023, a symptom of record ground-breakings in the first three quarters of 2022, the market will have a chance to absorb delivered vacant space. Due to economic and financial uncertainty and the rising cost of construction loan financing persistent for +12 months, ground-breakings in 2023 have slowed significantly, indicating an expected gap in new available space in 12-18 months. Near-term slowing activity and leasing could very easily shift to mid-term accelerated demand needs if the economic and financial markets find certainty and growth, and rental rates could jump significantly due to lack of available space.