Investment Overview

Marcus & Millichap is pleased to present the opportunity to acquire the property located at 20950 Ireland Road in South Bend, Indiana. The subject property consists of approximately 45,288 square feet of warehouse space and is situated on 5.5 acres of land. The multi-tenant asset features a clear height between 16’ and 18’, four dock-high doors, and one drive-in door. With below-market rents in place and all leases expiring by April 2024, the sale offers investors a significant value-add opportunity. Buyers can also acquire the property for both income and partial owner-use by occupying Suite B, a 13,482-square-foot warehouse space that will be available starting June 1, 2023. The property is primely located in the Greater South Bend submarket, only 1.5 miles away from the interchange between U.S. Route 31 and U.S. Route 20. Greater South Bend is a tough barrier-to-entry submarket containing 20.8 million square feet of industrial space. Unlike the overall market, warehouse and distribution centers dominate the Greater South Bend submarket, making up 54 percent of inventory. Specialized space, mostly manufacturing facilities, and flex properties account for 41 percent and 5 percent, respectively. Thanks to 12-month net absorption rising by 466 percent from about 95,000 square feet in Q1 2022 to nearly 538,000 square feet in Q1 2023, the vacancy rate dropped from 5.8 percent to 3.2 percent during this time. While rent growth has recently slowed down, market rents were still up 6.8 percent in Q1 year-over-year, which was 180 basis points higher than the five-year average. With only 546,400 square feet of industrial space under construction (all of which is concentrated in properties over 100,000 square feet), there will be no supply-side pressures on vacancies or rents among small industrial properties for the foreseeable future (CoStar). Located along the southernmost bend of the St. Joseph River, hence the name, South Bend is the fourth largest city in Indiana with a population of 103,453 residents. Established as a fur trading post, South Bend grew quickly with the rise of the now-defunct automobile maker, Studebaker Corporation. Today, South Bend’s economy is anchored by the famed University of Notre Dame. With nearly 6,000 workers, Notre Dame is the single largest employer in South Bend. Both residents and businesses benefit from a low cost of living and business-friendly environment, which has spawned growth in the logistics and high-tech manufacturing industries (Marcus & Millichap).