A flurry of recent sales in the bulk industrial market here suggests that national investors are back in the game and see Indianapolis as a solid bet.

Through the first eight months of this year, there were at least seven sales of large industrial properties in the market, compared with zero last year.

“Compared to the peak of the market three years ago, there is still plenty of room for improvement,” said J. Jeffrey Castell, an investment services principal at Cassidy Turley. But the deal flow this year compared to last represents a dramatic shift and bodes well for the market as a whole, Castell said.

Six of this year’s deals have closed since June. Among the largest:

—Boston-based Cabot Properties bought the Quadrangle building, a 795,000-square-foot bulk industrial property in Greenwood, from the Chicago-based entity that developed it. Cabot’s website says it owns 1.4 million square feet here and has invested $59 million in the market.

—Welsh Property Trust bought the 741,000-square-foot Redcats USA bulk industrial building in Plainfield from First Industrial Trust. Welsh, a Minnesota-based real estate investment trust, is new to the market.

Other buyers new to the market are Texas-based USAA Real Estate Co., which bought the 494,00-square-foot Siemens building in Plainfield, and Pennsylvania-based Exeter Property Group, which bought space here as part of a portfolio of 19 buildings in Indiana and Tennessee that had been owned by San Francisco-based Prologis.  

Castell said the rebound in sales is driven by a loosening in the capital and debt markets and the health of the local industrial sector.

“There is an array of debt opportunities that did not exist a year ago,” he said, noting that life insurance companies and banks are loosening what had become overly restrictive underwriting criteria. There’s also been a revival of debt tied to commercial mortgage backed securities.

None of the deals being made are highly leveraged, he said, but the deep-pocketed institutional buyers that are returning to the market typically finance at least a portion of their purchases with debt.

Buyers are finding prices here that are more to their liking. In some of the country’s largest markets, properties are trading at capitalization rates in the five and six percent range. Buyers can get a better yield here, where cap rates are closer to eight percent, Castell said.

The condition of the local industrial sector is also helping drive buyers into the market. Castell said the overall industrial vacancy rate at the end of the second quarter was 5 percent. “That’s as low as I can remember it,” he said.

Construction in the sector has dried up because of the economy, but he predicted the lack of product will trigger project starts next spring. “We think someone will pull the trigger on modern bulk space even if they can’t prelease.”

The health of the market suggests stable rents and improved leasing activity.

Leasing activity here began to pick up near the end of last year and has remained strong, mostly in the bulk distribution sector of the industrial market, said Chip Barnes, a senior vice president for Jones Lang LaSalle in Indianapolis. The office/showroom sector remains sluggish, he said.

Retailers, wholesalers and third-party logistics firms have been most active in the market. A lot of the leasing has been driven by e-commerce, Barnes said. Amazon.com, for example, has leased nearly two million square feet here this year.

Though national investors have returned as buyers, local users/buyers are still missing, he said. But the overall health of the sector is such that Barnes, like Castell, expects new product to come on line next year.

Barnes said activity he’s aware of among developers and investors leads him to expect a groundbreaking in the southwest submarket next spring.