IBJNews

Industrial spec development making a comeback

Back to TopCommentsE-mailPrintBookmark and Share

Year-end predictions that speculative development would return to the modern bulk industrial market after a four-year drought appear to be coming true, with at least two projects preparing to break ground this spring and another in the works.

Chicago-based Verus Partners is laying plans for a 770,640-square-foot spec industrial building in Green Park at Airwest, a 175-acre master-planned business park along Ronald Reagan Parkway just north of Stafford Road. It would be the first development in Green Park. Tom Theobald, senior vice president and regional manager for Verus, said land for Green Park was assembled back in 2006, but the economic collapse that followed kept the project on ice until now.

Theobald said Verus hasn’t done a big spec project since 2006 or 2007, but now “market vacancy, absorption and rents all suggest a spec strategy can be supported in this market.”

Another groundbreaking could happen as soon as April on a 31-acre site near Perry and Stanley Roads in Plainfield. Kansas City-based Caymus Real Estate LLC closed earlier this month on the ground, where it hopes to build a 450,000-square-foot warehouse distribution center. Caymus, which is new to the Indianapolis market, worked with the local office of Colliers International on the land purchase and will retain Colliers to lease the space when it comes on line, possibly in December.

Andrew Morris, executive vice president of industrial advisory services at Summit Realty Group, confirmed through an associate that Atlanta-based IDI Corp. is putting together plans for a bulk distribution building in the 700,000-square-foot range in World Connect at Ameriplex, near Ameriplex Parkway and State Road 67. The exact square footage and timeline for that project are in flux.

By all accounts, the overall industrial vacancy rate for the Indianapolis market fell last year after positive net absorption of between five million and six million square feet. Colliers showed vacancy falling from almost 9 percent at the end of 2010 to just over 6.5 percent at the end of 2011. Cassidy Turley statistics show a vacancy rate as low as 4.7 percent at year end. CBRE said the 7.7 percent vacancy rate it reported at the end of the year marked the first time since mid 2007 that the industrial vacancy rate here has been below 8 percent.

Sean McHale, director of industrial services for Colliers, said Caymus and the other spec developers are merely reacting to the fact that “demand is strong and supply doesn’t exist.”

One of the market’s last bulk warehouse spaces of more than 500,000 square feet was in Franklin, where Best Buy last month vacated its 703,000-square-foot distribution center. But that space at 2001 Commerce Parkway is to be backfilled by Texas-based music wholesaler Anderson Merchandisers.

That property isn’t in the market’s industrial sweet spot, which has gradually shifted over the years from the Park 100 area on the northwest side to the southwest side near Plainfield and Indianapolis International Airport.

McHale said all of the new bulk industrial projects he’s heard about are in the southwest submarket, which is attractive because of airport and highway access and abundant land.

In spite of the tightening market for industrial space, rents have remained flat. Colliers statistics at year end showed average rents for new, large industrial leases were at $3.92 per square foot, just a penny higher than the previous quarter.

 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

ADVERTISEMENT