A Strong but Uncertain Economy Leads to Flux and Possible Changes on the Commercial Real Estate Horizon.

The economy is rolling.

The opportunities are immense.


The 25th annual Market Study from Bradley Company helps break down what’s happening in commercial real estate in Indiana and Michigan.

The company, which has roots that go back 40 years, issues an annual study to assess what has happened in the past year and what the trends mean.

We’re all excited about this year’s study and a lot of credit for what’s in it goes to Steven Heatherly, Bradley Company’s senior market research analyst. He and others have worked together to craft this year’s study and he points to several takeaways from it.

Downtown development and redevelopment

“One of the biggest takeaways are the investments being made in the urban cores of many cities,” he said. In Fort Wayne, South Bend, Kalamazoo and other downtowns in the two states, people are investing. “Some of these are developments that have been planned for years and they’re finally happening,” he said.

The Exchange Building in downtown Kalamazoo and Skyline Tower in Fort Wayne are very important projects for their regions. In South Bend, the first office building proposed in nearly three decades is in the works.
It reflects a national trend focused on downtowns and is happening in our own secondary markets.

Strong economy/ low-interest rates

Buyers, developers, and investors have a general good feeling right now and want to build on ongoing successes, Heatherly said.

He points to a speculative distribution center in South Bend being filled quickly, helping lead to a second speculative building being constructed as evidence of how people being strategic, but also taking risks.

Changing retail

In many markets, big box stores are closing, leaving behind large vacant retail spaces. In Fort Wayne, some of the spaces are being used for rentable storage. In Elkhart and South Bend, a laser tag business filled two large vacant retail spaces in the market. “There’s a use for these buildings,” he said.

In addition, other retailers now have opportunities to enter markets because of available space. As retail continues to change overall, so will its part of the real estate market.

You can learn more about these trends and how they’re playing out in Indiana and Michigan in the 25th annual Market Study we’ve prepared for you.

A digital copy is available and paper copies will soon be in our offices for distribution.


The Suburbs of Indianapolis get a Multifamily Urban Infill Development Makeover

The $121 million 360 Market Square is a mixed-use development in downtown Indianapolis featuring 292 luxury apartment units and a Whole Foods Market. Flaherty & Collins was the project developer.

The $121 million 360 Market Square is a mixed-use development in downtown Indianapolis featuring 292 luxury apartment units and a Whole Foods Market. Flaherty & Collins was the project developer.

Jonathan Hardy, Bradley Company

Jonathan Hardy,
Bradley Company

If you happen to read or listen to Freddie Mac officials, the key economic factor driving housing demand is the labor market. In 2017, the Indiana Economic Development Corp. (IEDC) secured 293 commitments from companies across the country to locate or grow in Indiana.

Collectively, this will make for more than $7 billion in new investments and 30,158 new jobs in the coming years, marking the highest annual commitment in IEDC history.

Companies currently expanding and adding thousands of jobs throughout the region have been contributing greatly to the growth of the multihousing market in central Indiana.

More than 2,380 market-rate apartment units were completed in 2017. Construction doesn’t appear to be slowing down either, as over 2,200 units were under construction at the beginning of 2018.

Steven Heatherly, Bradley Co.

Steven Heatherly, Bradley Co.

Apartment deliveries soar


Steven Heatherly, Bradley Co.

Central Indiana has experienced a marked increase in overall multifamily deliveries. Between 2014 and 2017, developers delivered approximately 15,000 new units, compared with 13,500 units over the previous 14 years combined.

A large majority of the projects are greater than 100 units, particularly the market-rate developments. Lately, most of these projects have contained pockets of amenities or are located near amenities.

Downtown Indianapolis was home to one of the more iconic projects completed in 2017. Indianapolis-based developer Flaherty & Collins delivered 360 Market Square, a $121 million mixed-use development consisting of 292 luxury apartment units and a new Whole Foods Market.

Located adjacent to Cummins’ new $30 million global distribution headquarters and the new Julia M. Carson Transit Center, 360 Market Square enables residents to take full advantage of its accessibility to various downtown attractions.

Virtually down the block, the largest project under construction in terms of number of units is Phase II of The Residences at CityWay. The $135 million mixed-use development is expected to add 400 units to downtown Indianapolis once it is completed in 2019.

The suburbs are not holding back either, particularly the trifecta of Brownsburg, Avon and Plainfield, which have been holding their own against the hotbed communities of Carmel and Fishers to the north. Both areas have seen several new developments of 100-plus units in the past few years.

While the west side will benefit from several new deliveries in 2018, it lacks the planned projects we are seeing take shape on the north side.

Fundamentally speaking

According to Reis and Axiometrics, the multifamily sector in central Indiana has maintained sound real estate fundamentals during this expansionary period. Although rent growth is slowing and the vacancy rate will likely rise 10 to 15 basis points due to a surge in new supply, the most in 20 years, the market still offers plenty of opportunity for investors.

The key is to ensure that any future development is carried out prudently. Indianapolis is fortunate to have investment fighting its way into our neighborhoods. As a community, we should all make sure the investments on the table will feed our community and its residents for years to come, and not provide a broken development to detract from the hard work of central Indiana.

Will we see developers pivot to smaller infill concepts and launch those into our new urban-suburban trend? With a Class A average vacancy rate of 5.9 percent in the fourth quarter of 2017, and Class A asking rent increases through all four quarters of the year, we see opportunity in the market.

New urban-suburban mix

Yes, it rhymes, but that is not our fault.  Some have noticed the new trend toward urban core development, even in nontraditional urban development areas. Going vertical in Carmel, Fishers or Greenwood with multifamily or mixed-use development was unheard of 10 years ago. It seems like most new multifamily housing has some mixed-use component, or the ability to leverage existing area amenities.

With new development working its way through existing Tier 1 sites (both urban and suburban), what alternative can there be to keep up with the demand for quality Class A space? The answer may be smaller infill developments, less than 100 units.

Indianapolis and its resident energetic and entrepreneurial developers, albeit somewhat unknown, seem to be taking note. In the Broad Ripple Village neighborhood, there are five new developments in various stages of construction that range between 35 and 151 apartment units per project.

For one of our top market makers to take on a project, it may need to be in the 150- to 250-unit range with 20,000 square feet of associated retail and office. But smaller multifamily developers should seize on the opportunity to develop near big projects and capture tenants.

More development ahead

This new urban infill opens up many opportunities for apartment developers throughout the region. With more than 30,000 new jobs planned for the region, look for other neighborhoods throughout central Indiana to attract new multi-housing developments in the near future.

The limited availability of land and sites adjacent to the new suburban-urban core should allow for smaller projects with more variability in design, materials, and layout to penetrate central Indiana.

Now that the grid has been laid out in Indianapolis, we can all help finish the picture.

— By Jonathan Hardy, Advisor, and Steven Heatherly, Senior Market Research Analyst, Bradley Co. This article first appeared in the March 2018 issue of Heartland Real Estate Business magazine.

Kalamazoo Primed for Redevelopment

Kalamazoo Primed for Redevelopment


KALAMAZOO — The real estate market is tight in southwest Michigan, because there aren’t enough buildings. The region needs additional talented workers to fill jobs. Yet Jodi Milks, vice president with Bradley Company, points to a few key events that could help the region grow even more.

Kalamazoo was recently named one of Michigan’s Redevelopment Ready Communities, a certification from the Michigan Economic Development Corp. highlighting that it has removed barriers for development and will help prospective investors come to the city. The city is doing all but five of the 42 best practices outlined. At the announcement of the certification on Dec. 4, city officials touted the new website and efforts to study and woo what the city needs next. Imagine Kalamazoo 2025 began as a public project to envision the city’s future and will continue in ways that could grow and expand development.

“Being a Redevelopment Ready Community can speed up a development project by streamlining approval processes,” said Milks, who oversees Bradley Company’s Kalamazoo office. “Every month that is eliminated waiting for an approval can be what makes or breaks a deal.”

The biggest recent development underway in the region is the construction of Stryker Instruments’ 485,000 square foot facility near the city of Portage. The $154 million research and development facility could add 105 jobs to its existing 2,700 employee local workforce. Worldwide, the company has 24,000 employees, according to Southwest Michigan First, which does economic development for the region.

The company broke ground on the facility in July. When tax breaks were approved in March, Portage Mayor Pete Strazdas thanked the company again for expanding in Portage. "Not every day do we have a facility of this magnitude happening in our community. We are increasing the tax base, it's a major expansion of a facility and there are a lot of quality jobs,” he said, according to Mlive.com.

As Milks works with employers in the region, she hears their need for talent. “We are short on talent,” she said. “People have jobs and can’t fill them. Our community leaders work hard at this every day and I believe we will make good headway in 2018.”

She’s hoping for diversification so the region can keep up with others. “We love Stryker. We love Pfizer. But we can’t depend on them,” she said, noting that Kalamazoo has lost potential tenants and owners to Grand Rapids, South Bend and Elkhart due to a lack of industrial space.

“There are users who want to expand in this market and they don’t have a place to go,” she said.

Land is at a premium and there is a low supply of zoned property with services such as water, sewer, and internet fiber. She believes that the time is right for a new industrial development with high bay leasable space which users may expand in over time. Milks is working through various options in order to spur local growth.

“We’re not going to get an Amazon. Nor do we need one,” she said. “Our historical expansions have been more organic and grow with local developers and local businesses.  We believe we can continue that trend and attract more, with the right mix of options.” she said.

The region is experiencing that kind of growth, particularly as old buildings are repurposed. The former Gibson Guitar factory, which produced the iconic guitars from 1917 to 1984, is being redeveloped.

The Foundry

The Foundry

The Foundry

The Foundry

In downtown Kalamazoo, The Foundry opened in December as a hive workspace in a repurposed 53,000 square foot building. A brewery and farm to table restaurant are part of that space as well, tapping into both national and local trends, said Debby Roberts, administrative assistant in the Kalamazoo office.

That $10 million investment spurs other investments, particularly from public/private partnerships, said Milks.

The Apartment Boom in Downtown South Bend

The Apartment Boom in Downtown South Bend

The following provides insight into the Downtown South Bend Multi-Housing market:


For years, there had been relatively little market-rate multi-family (urban) housing options available in downtown South Bend. This lack of existing housing reinforced a negative cycle where the absence of market comparables – “comps” – inhibited lenders' ability to analyze real estate developers’ proposals for potential funding. In this absence of better information, the market was stalled.

Making moves:

In 2013, to help bridge the market gap, the City of South Bend engaged Zimmerman Volk Associates (ZVA), a housing market consultant company. ZVA has conducted over 450 market studies since 1988 and their reports are often cited as key milestones in several resurgent downtowns throughout the country. Validated by experience, the ZVA figures are often accepted by lenders as part of the due diligence for development projects in areas that are just beginning the redevelopment process. 

The Zimmerman Volk Associates Report for downtown South Bend was published in July of 2013 and identified the market potential for newly introduced market-rate housing units that could be leased or sold in downtown. The ZVA study was part of a broader public policy agenda to support the reinvestment in downtown South Bend. Infrastructure improvements, new incentives and public space programming coincided with a renewed interest by the private sector to invest in downtown South Bend.


Bradley Company is providing an update on the status of rental apartment projects that have been developed or redeveloped in downtown South Bend since the publication of the 2013 ZVA study. Although the ZVA study also includes the analysis of multi-family for-sale and single-family attached for-sale properties, our analysis will focus solely on market rate multi-family for-rent projects.

The map below illustrates the focus area of this market study. 


Zimmerman Volk Associates Results

The target residential mix and optimum market position for downtown South Bend projected that at least 500 new dwelling units could be absorbed in less than 5 years. Of the 500 new units, 64.5% of them would be rental apartments. This means 322 new rental apartment units could be absorbed by July of 2018.   

Target Residential Mix

Source: Zimmerman/Volk Associates, Inc., 2013

Source: Zimmerman/Volk Associates, Inc., 2013

In addition, based on ZVA’s capture rate analysis (how fast units will lease/sell), 66 to 98 new rental multi-family units could be absorbed annually between 2013 and 2018 in downtown South Bend. This projects that a total of 330 to 490 new rental multi-family units could be absorbed by July 2018.

Annual Capture of Market Potential

Source: Zimmerman/Volk Associates, Inc., 2013

Source: Zimmerman/Volk Associates, Inc., 2013



  • 4 projects have been completed, adding 146 apartment units since 2013
  • As of September 2017, 4 projects are under construction/renovation, expecting to add 229 apartment units in 2018
  • By 2019, 375 apartment units will have been created, which is 53 more apartment units than ZVA’s projected number of 322 apartment units

How are these new apartment units performing?

As of September 2017, 136 of the 146 completed units are occupied, representing only a 9% vacancy for new apartment units. Overall, these new developments are performing very well and, thus far, indicate that more people are moving into the downtown core of South Bend. With 229 apartment units expected to be completed from now to the end of 2018, we have more time to see if this trend will continue.

Remembering that the reported capture rate of apartment units could be 330 to 490 units by July 2018, downtown South Bend’s new apartment developments sit just above the bottom threshold at 375 expected units in 2018, with another 312 apartment units planned or proposed. As the reported July 2018 date is still a year away, we will have to see where the market is performing at that time, but as of now, downtown South Bend is proving to be "a place to be."

DTSB Project List

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DTSB Aerial-Marked.png


To discuss additional details regarding this study update, please feel free to contact Bradley Company's Senior Market Research Analyst, Steven Heatherly, at sheatherly@bradleyco.com or (574) 855-5710. 

*ZVA = Zimmerman Volk Associates




Transitional Land

Transitional Land

Farmland moving out of agricultural production is referred to as transitional land, and our marketplace has many examples of this product category and perhaps more importantly, the potential for this development.

Top 5 Projects in Northwest Indiana

Top 5 Projects in Northwest Indiana

Northwest Indiana is known for its industrial strengths, but projects of all types are taking place in the region. Below we’ve highlighted five major projects in the works. For additional insight, check out our Northwest Indiana Market Study

1). South Shore Line

Two major projects are potentially in store for the South Shore Line system, totaling approximately $905 million. Referred to as the “West Lake Corridor” and “Doubletrack NWI”, this project combination is expected to improve traffic congestion, travel times, safety, etc.

 Doubletrack NWI

West Lake Corridor

The $290 million Doubletrack NWI Project proposes to expand the South Shore Line from a single track to double tracks between Gary and Michigan City, Indiana. A major component of the project would  include moving the street-running tracks in Michigan City, making the area significantly safer due to trains no longer traveling in the same roadway as drivers. Additionally, there would be improvements to five passenger stations. Benefits of this project would include faster travel times, more trains operating (specifically during rush hour), and increased safety.

The $615 million West Lake Corridor Project would be an 8-mile southern branch extension of the existing South Shore Line between Dyer and Hammond, Indiana. The overall goal of the extension is to create easier access to high-growth areas in Lake County. Benefits of the project would include faster, less expensive, and more reliable access to higher-paying jobs in the Chicago area, relief of existing and anticipated traffic congestion, reduction of vehicular emissions, and more. For a detailed breakdown of the project, check out the project factsheet.

2). Gary Works / U.S. Steel

U.S. Steel has planned to invest over $50 million in its Gary Works steel mill this year as it seeks to make operations more efficient to capitalize off higher steel prices. The company already invested $23 million into restoring hot strip mills at Gary Works, and an additional $33 million worth of improvements are on the way.


  • $23 million toward restoring hot strip mills

  • $26 million toward improving reliability of the #6 blast furnace

  • $6 million toward the “Casters A Line Turret Bearing”

  • $1 million toward the 84” Pickle Waste Liquor Line

3). Port of Indiana - Burns Harbor

A $19.5 million upgrade is planned for the Port of Indiana – Burns Harbor. The expansion would include a new cargo terminal, 4.4 miles of rail, two new rail yards, additional usable dock space, a truck marshaling yard, extension of a retailing wall, and repaving of a dock apron. These investments will allow the port to increase its multimodal freight-handling capabilities to meet anticipated demand. "Indiana has one of the premier inland ports systems in North America. This project will increase our state's ability to attract and grow multimodal business in Northwest Indiana," said Indiana Governor Eric Holcomb.

4). Centennial Village – Munster

Centennial Village is part of a dramatic remake planned for the intersection of Calumet Avenue and East 45th Street in Munster. Various components are planned for the village, including four restaurants and two multi-story mixed-use buildings with ground floor commercial space, three levels of condominiums and underground residence parking. A Spring Hill Suites by Marriott is currently under construction on the site, as well. The entire project is expected to take 7 years.

5). Community Hospital - Crown Point

This new four-story multi-use hospital will specialize in care and rehabilitation for stroke patients.  The first and second floors will house emergency care, imaging and physical therapy facilities, physician offices, outpatient clinics and a women’s care center. The remaining floors will house inpatient care and neurological rehabilitation. The new hospital will be a member of the Community Healthcare System that includes Community Hospital in Munster, St. Catherine Hospital in East Chicago and St. Mary Medical Center in Hobart. A completion date has not yet been set.


For additional insight, check out our Northwest Indiana Market Study

Top 5 Indianapolis Projects

Top 5 Indianapolis Projects

Indianapolis sets the tone for overall developmental happenings in the Midwest. Below we've highlighted five of the largest, most impactful projects happening in the Indiana capital. For information regarding additional projects in the Indianapolis area, check out our 2017 Central Indiana Market Study


1). Bottleworks

This $260 million development proposed by Hendricks Commercial Properties will feature a 136-room West Elm hotel, an eight-screen cinema, office and retail space, and apartments and condominiums – totaling approximately 1.2 million square feet. The project has been dubbed "Bottleworks" in reference to the former Coca-Cola bottling plant on the site. It's expected to take five to 10 years to complete and will be constructed in five phases, with Hendricks tackling the hotel first. The latest news on this project can be found here.

A view of the project looking south, with 10th Street in the foreground

A view of the project looking south, with 10th Street in the foreground

  • 157 apartment units; 40 condominiums

  • 170,000 square feet of office space

  • 114,000 square feet of retail space

  • ~1,000 space parking garage


2). 360 Market Square

When complete, this $121 million project will be the tallest mixed-use luxury residential building in Indiana. Special amenities include a sky terrace on the top level, resort-style pool and sundeck, a bike repair shop and electric car charging station. The project is anchored by a 40,000-square foot Whole Foods Market. Although no project completion date has been announced, Whole Foods is expected to be settled in place by the end of 2017.

360 Market Square rendering

360 Market Square rendering

  • 28 stories; 300 feet tall

  • 292 luxury apartment units

  • 648,561 total square feet

  • 525 space parking garage

3). 16 Tech

This massive, 6 million-square-foot project will feature flexible research space for advanced industries (i.e. technology, advanced manufacturing, life sciences), creative industries and the arts, ample public space, a mix of housing opportunities, and retail and office space for entrepreneurs and established companies. The anchor tenant will be the Indiana Biosciences Research Institute, a $360-million independent research institute addressing metabolic disease and poor nutrition. It will take 20 years to get 16 Tech to full development with all plans and amenities. For further insight regarding the scale and impact of this project, see here.

16 Tech rendering

16 Tech rendering

  • Research/innovation space: 715,000 square feet

  • Residential: 450,000 sqauare feet

  • Retail: 150,000 square feet

  • Hotel: Up to 180,000 square feet

4). Former General Motors Stamping Plant

Indianapolis firm Ambrose Property Group plans to redevelop the former GM Stamping Plant into a $550 million project set to include a hotel, apartments, offices, retail space and greenspace along the river. The entire project is expected to take 15 years to complete, with 535,000 square feet of mixed-use construction occurring within the first five years. "Development of the former GM Stamping plant is a unique opportunity for Indianapolis -- because of its size, location, and quality of place, it is positioned to attract the kind of development that will benefit our community for generations to come,” said Mayor Joe Hogsett.

Overhead view of the current site

Overhead view of the current site

  • 103-acre site

  • 535,000 square foot first phase

  • 2.7 million square feet upon project completion

5). The Riley Children’s Health Sports Legends Experience

The $35 million Sports Legends Experience will feature 7 acres of outdoor activity space and half-an-acre of indoor activity space. The project is expected to include an 18-hole miniature golf course, small-scale baseball field, small-scale ice hockey rink (made of an artificial surface), small-scale football field, tennis courts, and pedal-car racetrack. This project is the largest investment at the Children’s Museum in 40 years and is projected to open in Spring 2018. A University of Michigan study suggests it should have a $130 million economic impact over five years.

Sports Legends Experience rendering

Sports Legends Experience rendering

For additional information regarding projects in the Indianapolis area, please refer to our 2017 Central Indiana Market Study. Or, refer to our full 2017 Market Study.

Top 5 Fort Wayne Projects

Top 5 Fort Wayne Projects

Like many other large cities in the Midwest, Fort Wayne is undergoing various development and redevelopment projects. We have highlighted a handful of the biggest and most exciting projects below. For insight regarding additional projects in the area, check out this video or refer to our 2017 Northeast Indiana Market Study.

1). Electric Works / General Electric Campus Redevelopment

The $300 million redevelopment of Fort Wayne’s General Electric campus will revitalize the 32-acre campus and its 17 vacant buildings, encompassing 1.2 million square feet.  “Electric Works” will be the new name of this mixed-use innovation district. The project is set to include residential, retail, office and community space, along with restaurants, a hotel, and a tract for a university (although no universities have officially claimed interest in the territory as of yet). Construction is set to begin as early as fall 2017. 

GE campus.jpg

2). General Motors Expansion

The $1.2 billion expansion of Fort Wayne’s GM plant is the highest ever investment at the Fort Wayne site, and one of the largest commitments to any of its facilities nationwide. The expansion will add 1.6 million square feet, increasing the footprint of the complex by 50%. The expansion is expected to be complete in late 2018 or early 2019.

Construction underway in the new pre-treatment facility

Construction underway in the new pre-treatment facility

  • 825,000 square foot pre-treatment facility
  • 865,000 square foot body shop
  • 195,000 square foot logistics operation center
  • 4.6 million total square foot complex

3). Downtown Sports Arena

A proposed $105 million three-level sports arena could be coming to downtown Fort Wayne. The structure is described as a multi-use facility with the capability of housing trade shows and other types of events in addition to sporting events. The arena would also be connected to the Grand Wayne Convention Center, increasing overall event capacity in the city. To view additional plans and renderings, see here.

  • Ground floor restaurants and bars
  • 225 underground parking spaces
  • Third floor luxury suites

4). Riverfront Initiative

Fort Wayne will soon see development on the ~$20 million riverfront initiative project along the St. Mary’s River. Highlights of the plans include a promenade, park pavilion, event lawn, urban bioswale, interactive sculptures, urban riverfront terraces, educational water features, an elevated boardwalk, a dock, and a children’s play area.  The project is expected to be completed by late 2018.

Riverfront Initiative.jpg

5). Skyline Tower

The $40 million Skyline Tower project, developed by Great Lakes Capital, is the final piece of an overall downtown development initiative featuring Ash Skyline Plaza. The tower will offer apartments as well as office space, with Ruth’s Chris Steakhouse committing to anchor ground-level retail space. The project is set to be completed by summer 2018. 

skyline tower 2.jpg
  • 12 floors
  • 170,000 total square feet
  • Parking in new Skyline Garage, adjacent to the Tower


For insight regarding additional projects in the area, check out this video or refer to our 2017 Northeast Indiana Market Study.