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Market Report

Indianapolis Industrial Market Report

Midyear 2023

Robust Supply Gains Absent in Central Areas as
Metrowide Conditions Remain Tight

Intensifying inventory growth warranted in outlying areas. Recent commitments by Walmart, Eli Lilly and NFI Industries, Inc. helped Indianapolis record its lowest year-end vacancy rate since at least 2000 entering this year. Operations improved, despite a near-12 percent supply expansion from 2019 to 2022 — the second-largest increase among major, non-Sun Belt metros. Strong tenant demand continued through the first quarter of 2023, with net absorption totaling 5.7 million square feet, the second-largest quarterly figure on record. Interest in modern facilities supports a record 2023 delivery slate, yet some of this space may struggle to secure tenants in the near-term amid a potential economic slowdown. However, historic supply gains will be segmented in far-out areas, while space constraints limit development in more central submarkets. 

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