Indianapolis Industrial Market Report

Broader tenant base absorbs newer space. Indianapolis is rapidly rebalancing as demand strengthens and new supply recedes. Over the year ended in March, the metro posted the sharpest vacancy decline among major industrial markets, with the rate falling 200 basis points to 7.3 percent as demand for modern space pushed vacancy in post-2020 buildings down more than 1,200 basis points to about 11 percent. Leasing beyond pure logistics should continue to support occupancy, with healthcare firms such as St. Jude Medical and Cardinal Health recently taking space alongside manufacturers like GE Aerospace and Faith Technologies. Momentum may remain strongest outside the Interstate-465 beltway, where vacancy in the east and south sits above 10 percent but is falling, while rates in Boone and Hendricks counties to the north and west dropped below 4 percent in March. Areas within the beltway have faced modest pressure, yet less speculative supply should help limit move-outs and support tightening, particularly as more firms favor inland hubs less reliant on coastal gateways.