Northwest Indiana

2021 – Q3 Market Report

Market Overview

The Northwest Indiana region consists of Lake, Porter, and LaPorte Counties and is known for being Indiana’s second largest economy made up of urban, suburban and rural communities representing a $35 billion economy.

Lake and Porter Counties’ largest economic drivers are the steel and manufacturing industries. Lake County is a large supplier of steel for appliances, cars, as well as many other products, and contributes $18.2 billion of economic output annually.

In recent years, casinos have also contributed greatly to the area as there are four major
casinos along Lake Michigan, specifically in Lake and La Porte Counties. A few more notable industries in the area are healthcare, manufacturing, and retail. Major employers of Northwest Indiana are US Steel Corporation, Cleveland-Cliff Inc., Blue Chip Casino, Franciscan Health, IU Health, Community Hospital, NIPSCO, and the new Hardrock Casino in Gary.¹ As the healthcare sector continues growing in the region, there are multiple new hospitals and facilities under construction and planned for the next few years.

The Northwest Indiana region has long been known as a hub for manufacturing which
propelled Indiana into becoming the leading supplier of steel in the United States since 1977. However, as technology transforms the tasks once done by human workers to robots and automation, the region has been working to diversify their economy and transform former industrial sites to new uses. The $40 million Digital Crossroads of America Data Center on the site of the former State Line Generating Plant in Hammond opened Phase I in 2019. The 77-acre site includes a 105,000 square-foot data center, tech incubator, renewable energy generation, and a greenhouse. The new data center project on the site could expand in phases to include 400,000 more square-feet and $200 million in total investment, which would make it one of the largest data centers in the country.

Northwest Indiana continues to benefit from its business-friendly environment and proximity to the Chicago metro. The region ranks second in gross domestic product among metropolitan areas in the state, only behind Indianapolis, and is ranked 89th overall nationally. Lake County ranks second out of 92 Indiana counties in total population and is ranked seventh best county in the state for Young Professionals in Indiana.²
Northwest Indiana is often referred to as a “bedroom community” for nearby Chicago –
offering a lower cost of living and slower suburban pace of life, with the proximity to the city to commute to work. As residents are continually relocating to the area and the region continues to see growth in new companies, several cities and towns have begun investing heavily in key areas to transform their communities.

To assist with the growth occurring in Northwest Indiana, transportation developments are
underway. The South Shore’s $933 million West Lake Corridor project is expected to reach
high-growth areas in Lake County, as well as create a faster, less expensive, and more reliable form of transportation to the Chicago market and surrounding areas. 





Median Household Income



37% Highschool
30% Some College
24% Bach/Grad+

Total Businesses


Total Employees


Source: Esri 2021


Industrial OVerview


Industrial demand remains strong across the Region. Class A
properties have a vacancy rate of 6.1%, however it is likely closer
to 3% due to demand. According to CoStar there is 6.7 million
square feet under construction and proposed Class A in the
market. Market rents ranging from $5 – $6 triple net and new
buildings range from $7 -$11 gross. Vacancy rates for Class B
industrial are 5.4%, down from 5.8%, and rents rose to $6.05, from
$5.65. Class C buildings have the highest vacancy at 13.4% which
is up 1.5% from last quarter. There aren’t many Class C properties
and they tend to be smaller and lack the ceiling heights that most
users require today. They also lack other modern features and
that makes it difficult to find new users. Some of these buildings
also lose tenants to new builds.

Demand is high for buildings in the 20,000 – 50,000 square-foot
range, however according to CoStar listings, there are only ten
properties available for lease in that range. Most are older Class C
properties, with the exception of one that was built in 1999.
Becknell Industrial has a 280,000 square-foot building under
construction in Hobart. The building was originally planned to
be 617,000 square feet, but plans changed during the pandemic.
Now the company has approached the city about finishing the
project at the original size, with the tenant AMI, LLC planning to
add manufacturing, logistics, distribution, IT and research and
development equipment at the site.²
There are four other large buildings under construction in the
• Sherwin Real Estate has a 300,000 square-foot building in La
Porte that will complete construction in December 2021. The
property is located at Enterprise and Genesis Drive. It has
90,000 – 240,000 square feet available.
• Northwest Indiana Crossings II is 261,638 square-foot
building in Ameriplex at the Crossroads in Merrillville. The
project has a projected completion in Q2 2022. It will have 32
foot ceilings and 62 exterior docks.
• The Homerlee Business Park in East Chicago has a 279,600
square feet under construction. The build-to-suit project is
scheduled for delivery in Q3 2022. It’s adjacent to a rail line
and has 30-32 foot ceilings.
• Amazon has their 141,360 square-foot delivery station
in Ameriplex at the Crossroads under construction. It’s
scheduled for completion in November 2021. Amazon will
occupy the entire building.
The popularity of Ameriplex at the Crossroads, has other
developers looking for land in the area. DVG Team, Inc. is
proposing a 250-acre business park at the intersection of I-65 and
U.S. Highway 231 in Crown Point. U.S. Highway 231 offers an
interchange with I-65. The land is currently zoned for residential,
so the city is working on rezoning. The site also already has
infrastrucure. If all is approved, the park could go under construction in Q3 of 2022.³


  • Rising steel prices continue
    to impact new building
    construction, resulting in
    higher building costs and
    delayed projects.

  • There is high demand for
    spaces in the range of 20-
    50 k in the region, but few
    properties are available.

  • Vacancy will likely trend Downwards as new Class A properties get absorbed in the next few quarters.

  • Developers are on the
    hunt for sizable acres
    across the region, which is
    increasing land prices.


Source: CoStar



Source: CoStar


Under Construction

Source: CoStar

Office Overview


The office market continues to perform in Northwest Indiana.
Vacancy rates for Class A office are 3.9%, down from 6.3% in the
prior quarter. Market rents are $20 -$26 triple net per square-foot.
However smaller spaces and medical uses under 1,200 square feet
command higher premium rents. Class B office had an uptick in
vacancy from 7.3% to 8.4% and market rents are around $17 triple
net. Class C vacancy is down 0.1% at 4.2% with rents ranging
from $12 – $16.¹

Bradley Company assisted clients in four office sales in Q3. There
were two smaller properties representing a total of 14,456 square
feet. The other two were both for $2.5 million. A 39,672 SF office
building at 101 West 84th Drive in Merrillville sold to Proven
IT who is based in Tinley Park, Illinois. The company bought
the building and acquired the seller Think Tank NTG to expand
services into Northwest Indiana. The other sale was for the Court
Street Center in Crown Point at 1501 Court Street.
Medical office buildings are still finding buyers from small single
tenant to office complexes. According to Real Capital Analytics
the 113,200 square-foot, three building Community Medical
Professional Center in Munster was sold in Q3. The buyer was
CA Ventures, an institutional investment firm based in Chicago.

The largest property sold was the former Bank Calumet building
in downtown Hammond. The office property has been vacant
for several years. It was announced that the building will be
converted to apartments with retail and community spaces on the
ground floor. The 82,736 square-foot 10-story tower is a key piece
of downtown Hammond’s redevelopment plans. This is good
news for the city after the announcement of the downsizing of
Franciscan Health Hospital last quarter. The redevelopment plans
include a new downtown transit station along with mixed use
developments including office, retail, and residential units and a
redesign of Hohman Avenue to make it more pedestrian friendly.
The city has also proposed to make the area around the new
Gateway Transit station into a transit development district (TDD).
The TDD would operate similarly to a TIF and would encourage
development of under-utilized or vacant properties.²

Also in Hammond, the popular mixed-use development Oxbow
Landing has its final two buildings under construction. An
Extended Stay hotel and a 14,000 square-foot, 3-story office
building that will be leased to Impact Networking. They are
currently leasing a 6,000 square-foot space in another building
within the development. Primary Energy,who are moving their
headquarters from Illinois, have already leased the space. They
will take occupancy when Impact Networking’s new building is
complete in 2022.³


  • Buyers are still interested
    in office properties,
    particularly those that are
    newer and well located in
    the market.
    • Office users are mainly
    interested in newer
    properties, so owners of
    older offices may need to
    invest in updates to stay
    • Investors are interested
    in older, well-located
    properties with higher
    cap rates that can be
    renovated for a higher
    return on investment.
    • Most office users are
    renewing leases and
    keeping their office
    space for now. Some are
    planning for more flexible
    space in the future.
    • Users continue to seek
    space in the market,
    especially in healthcare.
    • Landlords are not offering
    discounts at this time,
    since there is enough
    demand in the market.


Source: CoStar


Source: CoStar


Source: CoStar

Retail Overview


Retail continued to recover in the Region during Q3. New
restaurants and retailers were announced around the region.
The various downtown districts scattered throughout the three
counties are attracting local retail and restaurant concepts. For
instance a building that formerly housed an antique mall in
downtown Crown Point was torn down to create spaces for new
restaurants. Nationals are still looking in the most attractive
major retail corridors.

Class A retail vacancy is at 3.8%, down from 5% in Q2.
Absorption was positive with nearly 30,000 square feet absorbed,
up 61% from last quarter. Market rents are around $25 per
square foot. Some Class A properties are commanding higher
rents in the $28 – $36 range, especially those located in Munster,
Schererville, Dyer, St John, Crown Point and Michigan City’s
U.S. Highway 421 corridor, all of which have seen new retail
developments in recent years. Class B is also on the upswing,
with positive absorption of 45.4k and vacancy dropping to 6.5%
down, 1.6%. Market rents are averaging around $14. Class C
rents are primarily in the range of $9-$12 and vacancy is 4.5%,
down by 0.3%.¹

Big box vacancies are an ongoing problem for the region as there
just aren’t enough tenants looking for such large footprints. More
re-uses are being considered. A long vacant 166,727 square-foot
former Ultra grocery store at 8401 Indianapolis Boulevard in
Highland could be torn down. The owner, DLC has a proposal
to replace it with a 140,000 square-foot light industrial building
with a potential for more retail outlots.¹ In Hammond, a former
Carson Pirie Scott has been torn down to make way for a $45
million 100,000 square-foot YMCA next to the Hammond Sports
Complex. They plan to open in Spring 2024. It’s being called
a destination Y due to multiple pools, a water park and other

Southlake Mall continues to struggle. The mall lost more tenants
in Q3, including Aldo and a couple of food court tenants, Shark’s
and Schoop’s. It was also announced that anchor store Dick’s
Sporting Goods is moving their store across the street to The
Crossings of Hobart. This will leave the mall with three vacant
anchors. Macy’s, JC Penny, and AMC Theaters are currently
still open. A space outside the mall next to Target that has been
vacant since 2017 has a new tentant, Five Star Furniture. The
building was previously a Circuit City and then HH Gregg.
A developer is proposing a major mixed-use development at U.S.
231 and I-65 in Crown Point. The $185 million project, dubbed
The Fountains would include residential, retail, entertainment,
hotels and office. The retail component could include 427,000
square feet and office of 132,000 square feet in multiple buildings.
Residential would include 322 units in a mix of townhomes
and condominiums. The Crown Point Planning Commission is
considering the proposal.³ The developers, DVG Team, Inc. are
also proposing a 205-acre business park at the same intersection.
If both projects are approved, it would be transformational for
the city of Crown Point.


• Vacancy is likely to
continue to decline
through next quarter
as positive absorption is
• Some retailers will
continue to move within
the market as they look
for better visibility and
spaces. Service providers
especially are moving to
be more accessible to
their customers.
• Big box vacancies will
continue to struggle, but
well-located shopping
centers with smaller
spaces are finding new
• The ongoing supply chain
difficulties may impact
momentum as some
restaurants and retailers
struggle to get necessary
supplies and inventory in


Source: CoStar


Source: CoStar


Source: CoStar