Indianapolis CRE market experiences heightened speculative space levels

Indianapolis had a heightened level of speculative space in recent months.

Property management companies in charge of developing commercial real estate space in the Midwest experienced a heightened level of speculative industrial area in Indianapolis than any other metropolitan area, according to a report from Jones Lang LaSalle.

Close to 2.5 million square feet of this type of space is under construction in the city, which is far higher than any other in the area. This is due to the city's continued low vacancy levels, as well as improved rental prices, the Indianapolis Business Journal reported, citing JLL's report. Rents jumped 10 percent in the past two years, while the vacancy rate for bulk distribution properties was lower than 5 percent.

The next highest city for speculative space is Chicago, which has only 1.73 million square feet of space, the report explained. There is no such space under construction in Columbus, Ohio, or other cities in the region, such as Louisville, Kentucky, or St. Louis. Minneapolis had a speculative space level close to 350,000 square feet, while Cincinnati's level was 900,000 square feet.

According to Cassidy Turley, Indianapolis had a net absorption rate of nearly 643,000 square feet of industrial space last quarter. This helped the figure rise to more than 1.9 million square feet for the first three quarters, overall.

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