Indianapolis industrial market report

Q2 2023

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.
26.6%

New inventory delivered since 2019 as percent of total

Makes Indianapolis the 6th largest growing inventory on a percentage basis nationally.

+70%

Percentage of all deliveries for buildings 500.0 ksf+ since 2020

Development pipeline focused disproportionally on the large-box space.

19.2 msf

Under construction

Amount of currently under construction +500.0 ksf projects still yet to deliver in the market.

9.9%

Industrial vacancy rate (bldgs. 500.0 ksf+)

Amount of currently under construction +500.0 ksf projects still yet to deliver in the market.

2.9%

Industrial vacancy rate (bldgs. 20.0-99.9 ksf)

The smallest building size remains the tightest in the market.

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