Indianapolis Retail Market Report

Economic expansion supports retail. While metrowide vacancy will inch up this year, it will still be lower than at any point between 2007 and 2021. Employment opportunities should keep drawing new residents in 2026 even as foreign inflows slow, with net in-migration projected at about 12,000, the Midwest’s second-highest tally. In this context, Boone and Hendricks entered the year with a near-1 percent vacancy rate, though a sizable supply pipeline may put modest pressure on the rate in 2026. Even so, major business investments such as Project Falcon, the Hyster-Yale facility, and Eli Lilly’s large-scale manufacturing projects should bolster consumer spending and keep conditions relatively tight. Elsewhere, in northeast and south Marion County, triple-digit increases in vacancies in 2025, along with elevated lease expirations slated for 2026, pose a risk to local demand. Even so, Indianapolis’ continued status as one of the Midwest’s fastest-growing economies should support the metro’s retail fundamentals.