Indianapolis Industrial Market Report

Supply pressures eases as leasing catches up. Indianapolis has faced elevated deliveries since 2022. The metro’s vacancy rate has more than doubled in the last three years, rising to the highest level among major Midwestern markets in 2024. This year, however, the total deliveries will shrink to less than half of 2024’s volume and about one-eighth of the record levels in 2022 and 2023. With net absorption projected to outpace completions for the first time in three years, vacancy is expected to drop. Some outer submarkets in the west and south are already seeing year-over-year vacancy declines, led by West Hendricks County, where strong demand cut vacancy by 500 basis points. The new Sephora Midwest Distribution Center under construction there will account for more than a quarter of the metro’s new openings this year.